Cravath & Simpson & Mixed Messages
As 7th year associates at Half-Skadden and Skadden-Mart come to grips with the fact that they will be getting a smaller bonus than 1st years at Skadden, let’s take a look at a curious article that came out on November 20th. The same day Cravath announced their reduced bonuses (and threatened their people about 2009) Chairman Chesler spoke to American Lawyer:
Evan Chesler, the presiding partner of Cravath Swaine & Moore, stresses that firms do not need lots of offices to be diversified. “It is too easy to confuse geography with geographic reach,” he says. “It is not the same thing.” …Although Cravath has just one small outpost in London, the firm is highly diversified, Chesler maintains. “We certainly do Wall Street work, but we always have done work for companies not on Wall Street, companies that make things and are located all around the world, and will continue to do so.”
Apparently, for Chesler “it is too easy to confuse” words with deeds. Either the firm is diversified and is in a good position to weather this economic storm, or it is not. I’m sure that Chesler’s employees do not really appreciate Chesler running around publicly talking about the health of the firm, on the same day he sends around internal memos warning:
[A]ssociates should be prepared for the likelihood that the economy and the Firm’s financial performance next year will not show a significant improvement over this year and they may receive significantly reduced or no year-end bonuses next year.
If you want to criticize Cravath associates, don’t call them “greedy and entitled,” instead call them “foolish” for believing their own management. Believing their own firm is a mistake I’m sure most Cravath associates will not make again.
After the jump, guess who else was talking.
In the same article, Simpson, Thacher & Bartlett personnel were talking about the future:
Simpson certainly hasn’t had an easy time of it this year. Lehman is gone, and its marquee private equity clients are hurting. Chairman Richard Beattie recognises the severity of the situation — “I strongly suspect we have got a rough period of time ahead” — but sounds unruffled. He sees the markets turning around within a year or two, and does not expect big changes ahead for his firm and its closest competitors.
Okay. No “big changes.” Bonus sounds safe, doesn’t it?
“I do not think [the market changes] will impact fees,” he says. “The M&A work will come back, and Goldman Sachs and Morgan Stanley will be advising the companies doing M&A, and I do not see the fees being different… The private equity firms will be back. They are sitting there with huge piles of money.” In the meantime, Simpson will be kept busy by, among other things, representing the US Department of the Treasury as it manages the $700bn (£466bn) bailout fund.
You almost have to admire the boldness of such statements. “Oh, FEES will be the same, it’s just the associate bonus that is going to be halved. Not that, that is a big change!”
Good job Half-Skadden and Skadden-Mart. Way to create an environment of mistrust where your senior associates feel significantly underpaid and under valued.
Update (7:25): It turns out that the article quoted above originally appeared in American Lawyer at the beginning of November. It just happened to run in Legal Week on the same day that Cravath announced it’s bonuses. Prescient story by AmLaw, hilarious timing for Half-Skadden.
Chronicle of a Future Foretold [AmLaw]
A landscape that’s changed forever [Legal Week]
Earlier: Associate Bonus Watch: Simpson Announces Bonuses … And You’re Not Going To Be Happy
Associate Bonus Watch: Cravath Offers Less Than Skadden
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why is elie hatin on csm so much?
omg FIRST
omg NO
The STB comment is actually fairly reasonable, though it may prove to be mistaken. Fees don't move too much, but the amount of work will be lower for a while—and the firm has a "rough period" ahead.
Seriously, CSM is at a level Skadden can never attain. Less of a bonus is made up with prestige.
Seriously, CSM is at a level Skadden can never attain. Less of a bonus is made up with prestige.
Prestige (snicker).
CSM _WAS_ at a level . . . .
5/6, prestige don't put food on the table.
Save your prestige argument. The difference in prestige is eclipsed by the difference in total comp.
Simpson and Cravath = EPIC MOTHERFUCKIN' FAIL. JUST SEE HOW ASSOCIATE MORALE WILL DROP IN BOTH THESE PLACES - HOPE THE FUCKING FAT CATS PARTNERS FEEL THE BRUNT OF ASSOCIATES' RESENTMENT.
Well, I guess you could say CSM is diversified enough to not lay people off (for now anyway).
Still counting on TRULY diversified firms to put Cravath and Simpson in their place. Nice job, Skadden.
Real int'l firms please show us your stuff -- W&C, JD, BakerMac, CC, A&O, LLs, Latham, Sidley, let's see it....
9, if $250,000 (without bonus) doesn't put food on the table, you need to talk to a financial counselor. I think what you mean is "prestige don't put that 7-series in the garage."
Nicely done, Elie.
NASHVILLE BIGLAW TO 110K!!
PARTY ON DEMONBREUN!!
I cannot wait to demolish Cravath in the Vault rankings...
*slowly cries as i realize that no one is going to be hiring eager 1L’s like me*
-nervous T-10 1L
email job leads to nervoust101l@yahoo.com
10 = anti Semitic racist who probably likes to kick puppies
From #6: "Seriously, CSM is at a level Skadden can never attain. Less of a bonus is made up with prestige. "
I just love this comment. Love it.
"Hello, kind sir. I'd like to buy this can of Coca Cola, and I shall tender 1.50 Prestiges for it. Thanks"
"Hey, there goes Smith in his '99 Honda Civic. Boy, that guy must pull in MAJOR Prestige to afford that lifestyle."
"My father was a good man. He worked hard, and was able to bequeath to us a sum of one-million Prestiges so we can have a solid headstart in life. Thanks, dad"
The bald eagle is a bird of bad moral character.
I guess those disgruntled STB CSM associates will just vote with their feet.....
...to the unemployment office. Enjoy your special bonus Elie.
I think your analysis is flawed. You treat "good position to weather this economic storm" as a BINARY function, and it simply isn't. At one end, you have the Thelens of the world. And at the other, you have... (well, Skadden would like you to believe that they're there, but too many Skadden associates are really light on work for me to put them in that category just yet).
But in between, there's a huge range. And Cravath probably falls at the top of the range, if only because IF there is high-profile corporate work still going on with big name companies, Cravath will probably see a large part of it (in addition to its other practice areas). If it sees a fall-off in short term work and revenue, and if bonuses (rightly or wrongly) are paid for past work with an eye to future finances, it's financially irrational not to be measured in its approach to compensation (of course, my argument only holds if Cravath also holds PPP at the same or lower levels this year). Like it or not, you simply can't spend like it's 2007 in 2008, hoping that you'll have higher revenues when all indications are that you won't. That's a BAD way to run a business.
CSM is maybe diversified and small enough to avoid layoffs, and that may be a source of pride for partners, associates, and nervous staffers. People are pissed, but most of the other V10 will match or get close to CSM, not Skadden. And five years from now, associates will still be fighting for CSM partnerships, because they'll maintain their PPP.
* bleeds from ears and vomits up bilirubin after a massive group beatdown from other ATL readers *
- nervous T-10 moron wasting everyone's time
"Way to create and environment of mistrust.."
Did you mean "Way to create AN environment of mistrust..."?
Skadden-Mart. I think i like that even better than Half-Skadden.
based on associates' reactions around STB, i don't think most people feel "underpaid" and "undervalued". it's not the end of the world. we still have jobs. calm down, ATL.
If prestige is such a great substitute for pay at CSM, then why is WLRK still paying 100% bonuses?
agree with 20 - # 6 is a joke
It like saying "in this world prestige talks and bullsh*t walks"
Or how about the age old economic debate between the right and the left about whether the government should allow people to pursue and build their own prestige free of regulation, or whether the government should redistribute prestige from the upper to the lower classes.
Prestige doesn't put bread on the table.
I'd rather reduce my student loans further and buy a bigger condo than have more "prestige." $ > prestige
Here's something to keep an eye on: If firms like CSM and STB report PPP equal to or higher than last year, associates at those firms really have reason to be angry. It's one thing if those firm's Wall Street-centric focus has hit everyone's wallet in the firm and quite another if the associates are made to carry the partners' water.
Bottom line: the only reason to work in one of these hellholes is for the money. If that disappears, then their entire appeal disappears. Just outsource all of this garbage to India and get it over with so students will realize they need to find something else to do with their lives.
14, yes, $250k will put food on the table. In fact, I'm told $160k will allow you to eat as well. That's not the point. Either CSM and STB are financially healthy or they are not. If they are healthy, they should share the rewards of that health with with the associates who bent over to help them earn it, instead of hiding behind some B.S. about how it looks bad to give out market bonuses when their clients aren't doing well. I'm pretty sure clients couldn't give a crap about how much their lawyers are paid, as long as they aren't getting their fees raised.
What's with this sense of entitlement? The shit has already hit the fan so be thankful that you keep your job - that's your bonus right there!
Look, prestige is terribly important. Without any work to do, prestige is the only thing you have to cling to right now--as you sit in the local bar and try to meet new friends. "Please, talk to me...show me some respect, I work for Cravath!!!"
13 - BakerMac? W&C? You've GOT to be joking.
Elie, your posts have been pretty good lately. Don't let it go to your head, but keep up the good work.
We've seen some interesting posts from CSM and STB lawyers here. The CSM lawyers have been furious and indignant. The STB lawyers have been calm and generally grateful for having a job and a bonus.
Interesting.
14, thank you for your input. Have you ever heard of Latrell Sprewell?
-9
First ATL post ever - longtime reader - I miss Lat! Wondering why I still read this crap!
BOTTOM LINE: prestige=money
I agree with 13 ... W&C should be able to match Skadden, since they got rid of half their associates.
Skadden x (W&C Associates / 2) = Cravath x (W&C Associates)
Remember when impact wasn't a verb?
FORTY FIFTH!
"and environment of mistrust"??
34, cravath is trying to establish the market at teh reduced amount (and I think they will). Skadden will be above market because they went first, no other reason.
Prestige without gobs of money is non-existent.
14:
Latrell Sprewell made millions, but that wasn't enough to feed his family. So I don't think $250k puts food on the table.
What's with this sense of entitlement? The shit has already hit the fan so be thankful that you keep your job - that's your bonus right there!
20 - You win 2 internets and 1 Prestige.
39,
It's all about expectations. Simpson people could see this coming; for CSM people, it was a blindside.
Still very interested to see another big firm with an hours requirement announce...
I have to give you credit, Elie. You actually made a good post out of a week old article by connecting it to these bonus announcements. Well played.
And while you'll probably run out of derogatory names for firms that low-ball bonuses, "Half-Skadden" was genius.
Announcing no bonuses next year=stealth layoffs via market forces???
W&C does not pay bonuses. They pay above market base comp.
42, except when it comes to Cravath and Simpson.
I just declined a raise. I asked for prestige, instead. (I hope Obama doesn't tax my prestige)
Elie = Skadden Troll
Lay off CSM. This one-sided coverage is getting really old, really fast.
39, the STB lawyers are grateful to have jobs right now b/c they're averaging 900 billables in a crap market.
The CSM lawyers are pissed b/c they were suckered into going to the albino-shoed penitentiary with promises that they would always be comped as market-leaders, and then had the rug pulled out from under them.
HEY ATTORNEYS WORKING AT "TOP" NYC FIRMS:
Guess what? There's nothing prestigious about what you do. You all do the same shit that attorneys in every city do. The deals may be larger, but YOU'RE ALL DOING THE SAME THING! Get the fuck over yourselves. Companies don't go for a firm's "prestige"; they seek out particular attorneys. Any and all references to Vault are insanely misleading. No one cares in real world. Again, get over yourselves, especially you NYC prestige whores.
58-
Sorry about your tiny pink Cravath prestige
Bunch of people in these responses flunked econ and negotiations.
Compensation is what the market will bear. Associates have no leverage on pay when they don't have an alternative. The alternative to taking whatever "market" pay is, is an even further pay cut. Banks can't fire people fast enough, the hedge fund industry is toast, and private equity is a shipwreck (as in breaking up underwater). This constrains exit options and limits possible career tracks for "top" law students at "top" schools. There are only so many spots at high comp, high prestige boutiques and there are only so many spots at Skadden.
There also are no shortage of people who are in the top quarter of their classes at T1 schools who would gleefully take a $150,000 year w/ benefits job instead of a $160+ bonus job. Right now, they are lucky to get $80 if they don't get the $160.
If Cravath and STB were outliers, they might possibly not get a few of the people they want, but they will still get more than enough people. Since they aren't outliers, nothing will change. The alternative tree for a "V10 material" student is to (a) not work (b) drop out or (c) take a lower paying jobs.
I second 33.
58, CSM deserves whatever bad press it gets.
some Cravath attorney ranting about bonuses on youtube. this cat's not gonna have a job for long:
http://www.youtube.com/watch?v=edaJP3Lp0Gg
Me thinks Elie got dinged by CSM, and this is his way to get back at them...
some Cravath attorney ranting about bonuses on youtube. this cat's not gonna have a job for long:
http://www.youtube.com/watch?v=edaJP3Lp0Gg
Half-Skadden is funny, but i don't get Skadden-Mart. Care to explain?
40 = racist Skaddenite, probably with HUMONGOUS pubes.
GULC4Life
62-
You're right.
65, nice.
39 - that's also because STB has really been hit hard by this economic crisis. STB associates know that if they and many of their colleagues are going to end the year billing 1000 hours, they cannot possibly get upset with a lower bonus. That is fair enough.
How quickly people forget that CSM was the bonus leader last year with special bonuses. Give it a rest people. Non-CSM attorney here.
This post is garbage. Stop pandering, Elie.
The statement, "I strongly suspect we have got a rough period of time ahead," does not make it sound like bonuses are safe.
Associates should stop whining about bonuses and start worrying about getting laid off as this downturn progresses through 2009.
If I worked at Cravath I would let them spray Prestige all over my face.
74, except insofar as it indicates that that rough period hasn't yet started. And since bonuses are basically based on earnings in the past...
hopefully, my bonus this year will to not be fired or canned by my firm. as best i see it, that puts my bonus ahead of about 2k lawyers at top law firms that recently lost their jobs.
69 nailed, Ass Cravath style!
JT4EVA
73, you're right. We should be forever grateful and never say anything bad based on changed circumstances. You hold a cabinet position in the Bush administration, don't you?
hey 34, do you realize how marxist you sound? the owners "should share the rewards of that wealth" with the employees?
and all you entitled punks, if your firms don't match skadden, i dare you to quit and apply for a job at skadden. that'll show your firm who's the boss.
I wanna ANALLY IMPALE me some Cravath and Simpson partners.
-Glass COCK
"RESPECT?!? PTWOT! What good is respect without the moolah to back it up?!?!?"
-Crusty the Clown
34-
These firms are not financially healthy. But what do you expect the managing partner to say to the press? We're struggling financially, cutting bonuses and considering layoffs? I agree that the firm should be honest and open when talking to its associates, but it doesn't benefit the firm or its employees for the MP to put a negative spin on the firm's economic situation.
60=the Embittered Texas Troll
*feverishly works on my mail merge while simultaneously worrying about finals*
-nervous T-10 1L
email job leads to nervoust101l@yahoo.com
23: good comment. But don't forget that we're talking about law firms. Notorious for bad management. Thus, if spending like it's 2007 in 2008, hoping that you'll have higher revenues when all indications are that you won't" is a bad way to run a business, then...spend like it's 2007!
76, Bonuses may be based on past earnings, but if you expect that you will be in the red in 2009, it makes sense to save that money to pay your associates' high salaries for the next year. Oh, and I don't read that quote to mean that the rough period hasn't started.
60: How's the weather in [Insert Flyover State Here]?
We have new additions to the TTT totem pole - say hello to MOTHERFUCKING Cravath and Simpson. What other firms wanna join the TTT league?? With its bonus announcement, Skadden has shown itself to be a cut above ALL V10 law firms with the exception of WLRK.
I would much rather have all of that extra prestige than PEANUTS and CHEESE!
Once the firm stops paying, there goes the "prestige." Hold on to your peanuts and cheese . . .
Dear Big Lawyers,
What's with this sense of entitlement? You think just because you didn't smoke as much weed as me in law school, and opened your casebook, and didn't borrow outlines the week before the exam, you deserve more money than me?
Be thankful that you keep your job - that's your bonus right there! So technically, I'm getting a $20,000 a year bonus, too, by keeping mine. Bet you never thought insurance defense firms would match Cravath!
Sincerely,
Whiny Poor Lawyer
86, while I wouldn't necessarily dispute that the rough period has started, I think it's a stretch to interpret "I strongly suspect we have got a rough period of time ahead" as an acknowledgement that the rough period has already begun.
I don't think you and I disagree about much else though.
-76
60 here. I live and work in NYC. I've just gotten over myself. My NYC blinders are off.
Companies don't go for a firm's "prestige," IDIOTS They seek out particular attorneys. Any and all references to Vault are beyond misleading. NO ONE cares in the real world aka Dallas, Houston, etc..... Again, get over yourselves, especially you sniveling testosterone deficient NYC prestige whores.
Big Handle
Elie = Skadden troll who ignores reality of stealth and not-so-stealth Skadden layoffs
Elie = Skadden troll who ignores reality of stealth and not-so-stealth Skadden layoffs
Elie = Skadden troll who ignores reality of stealth and not-so-stealth Skadden layoffs
Elie = Skadden troll who ignores reality of stealth and not-so-stealth Skadden layoffs
Elie = Skadden troll who ignores reality of stealth and not-so-stealth Skadden layoffs
Elie = Skadden troll who ignores reality of stealth and not-so-stealth Skadden layoffs
Elie = Skadden troll who ignores reality of stealth and not-so-stealth Skadden layoffs
Elie is clearly gunning for a spot at Skadden after Lat finally fires his ass. (Please, Lat!)
SkaddenDC = Big Pink ELIEphant
Elie is clearly gunning for a spot at Skadden after Lat finally fires his ass. (Please, Lat!)
Three things to keep in mind.
1- Last year, top bonus at Skadden, CSM and STB was $110k, so Skadden CUT bonuses by 45%, and CSM and STB cut them by 72%. Anyone who says that associates advocating for a Skadden level bonus aren't facing economic realities is just plain wrong. I guaranty you that PPP, billables -- or any other measure you care to choose -- will not be down by 45%.
2- Bonuses have always been paid based on the performance of a firm for the prior year (and the firms have always been quick to remind associates of that), not on what business for the next year looks like it might be. Partners, as business owners, are in the position of taking risks. When times are good, they should, and are, rewarded for these risks with enviable compensation. The reason the reward is so high is that when times are rough, they might stand to make a little less, because as business owners taht's what they signed on for. Because an associate's upside is far more limited than that of a partner, he or she shouldn't be expected to bear a commensurate burden on the downside.
3. Anyone on this board who refers to a law firm associate as "spoiled" for wanting to take home $250-350k for doing the work of an associate, has obviously never done the work of an associate (and I'm talking about someone who's billing 2100 hours plus). The firm owns you 24/7; there's no such thing as a planned vacation or a holiday (conference calls on Christmas day!); not a single day off for 77 days running (happened to me twice in one year); routinely working 14 hour days; coming in when you're sick as a dog because there's no one else to do the work, etc. Basically, you're giving up years of your life and sacrificing firends, family, leisure time and often-times your health -- $350k is a bargain.
Nice one, 82!
Bart: It doesn't matter what you did wrong, though, as long as you're on TV people will respect you.
Krusty: Bah! What good is respect without the moolah to back it up? Everywhere I go I see teachers driving Ferraris, research scientists drinking champagne. I tried to drink a Coke on the bus, and they took away my pass! That's no life for a famous clown.
95, you are just another reason in a bucket full of reasons that I avoid Texas.
beantown
62 is right on the money (or lack of money).
What the market will bear becomes the question from both sides of the equation.
From a Client Side:
Why in the world would a client pay a firm the same rates it paid last year? The notion of paying oodles of money for the prestige of a Biglw firm or an attorney from a T14 school is flying out the window as clients realize that their work can be done by any associate who ranked in the top half of their class from any top 100 law school.
Lawyers side:
Basic economics explains that as the market contracts with supply remaining the same, prices drop (deflation). Unfortunately, it seems that many attorneys fail to recognize this basic fact and think their wages are inelastic and should not bend with the changing economic climate. Whether it is decreased bonuses, layoffs, or increased hours, something has to give in response to these factors.
Bottom line: Being self-centered attorneys, we are spoiled rotten. We expect huge wages and bonuses for the hours we work and assume that we are worth every penny to our firms. The notion that we are worth the money we get paid is proving to be a fallacy. Clients are realizing our worth or that they just can't afford our services. Changes must be made.
Making the bonus a smaller part of our compensation would be a good start. While it would decrease our total compensation, it may increase our quality of life as firms turn nto more of a consulting model where they hire a greater number of lawyers to do the same work, but expect more realistic hours from lawyers. This increase in quality of life will allow firms to retain lawyers at or below their current salary rates.
Let's face it, even in NY $160k/year for a first year associate is ridiculous.
If indeed these are bad times for Cravath and Simpson, doesn't this present an opportunity for healthier firms? If Skadden and S & C are doing comparatively well, why not try to separate themselves with larger bonuses to create a recruiting edge? If Cravath and Simpson feel the need to match, so much the better.
Amen, 106.
34 -- A bonus is a bonus, not an entitlement. Associate bonuses are meant to serve as thank-yous to associates for their work during the previous year, and the amount of money available to pay them reflects how well the firm did during the previous year and/or the firm's need to keep up with the market for associate compensation. Firms were able to hand out giant bonuses (historically speaking) over the last few years due to a gigantic economic bubble that was fueled by a lot of loose lending. That loose lending is over and the entire economy is going through massive a dislocation. Many firms have been hard hit, and there are definitely unhealthy firms out there. However, many firms are weathering the storm and will have perfectly good financial results, just not better than 2006 and 2007. I would call those firms healthy. (If you differ, then you might want to start stockpiling canned food.) Firms will be able to help maintain their health if they pay 2008 bonuses that are more in line with historical precedent and less in line with the crazy numbers of the last three years. If folks continue to push for outsize bonuses during times like this, they are only asking for more layoffs and more firms going down.
Companies don't go for a firm's "prestige," IDIOTS... They seek out particular attorneys. Any and all references to Vault are beyond misleading. NO ONE cares in the real world aka Dallas, Houston, etc..... Again, get over yourselves, especially you sniveling testosterone deficient NYC prestige whores.
Big Handle
Hey, we're all free marketers here. So if Cravath has Prestige, and Skadden has a few extra bucks lying around, let's make a deal. How much Prestige can $17,500 buy me?
Wake up. Clients dont care about prestige. The courts dont care about prestige. Your wallet doesnt care about prestige. Only the vault cares about it, and only moronic law students with no experience care about the vault.
Can someone even explain what "prestige" means, without basically saying - the non-existent residue after you take out all real factors.
109 - You're either a T&E attorney of have a self-esteem problem. You should take what little bonus you get and pay a shrink.
112, no a "bonus" is an entitlement. Law firms taught us that last year when they gave us a "special bonus" based on the fact that they had historic years. A "special bonus" is not an entitlement. However, if bonuses are not an entitlement, why differentiate a "special bonus"? Why not just call it a "bonus"?
And the people to be laid off are the people who are not working. If you're not working, you should be laid off. It shouldn't mean that people who are working get less for a bonus.
Why does Cravath hate my freedom?
89: Yeah, nothing says "prestige" quite like announcing a status quo bonus while quietly dumping an entire office full of associates, complete with clawbacks. That's the hot shit right there.
Skadden can pay whatever it wants in bonuses; it's still Skadden.
116 will be the next to be laid off.
Who cares if lawyers feel entitled?
20 is best comment ever. I'm calling citibank now to ask if I can pay my mortgage with 5,000 prestiges.
Good comment, 109.
Why does anybody care that lawyers feel entitled???
This would never happen in the Lone Star state where a level of civility exists amongst professionals that is lacking in other parts of the world.
Big Handle
#106 and #111.
Clealry you have drank the Kool Aid, achieved martyrdom, and will receive your place at the table when the time has come.
Do you poor kids think you deserve a huge bonus on top of your huge salary for doing your job? Remember: You chose your firm and the lifestyle.
That said, I agree that the demands are great and sooner or later attorneys will get it through their head that it's not worth the reward and firms will come to realize that huge salaries with the corresponding huge billable requirements are not the answer to retaining the best attorneys.
A realistic salary for realistic billable hours, with an occasional (unexpected) bonus for work beyond the call of duty is a much better model for retaining the best.
119 will bill less than 1500 hours this year.
when will S&C announce?
At least in securities practice, reputation matters. The S&C/CSM/DPW name on an opinion letter is highly valued and sought out by clients.
13
B&M is matching bonuses paid last year. Announced at meeting yesterday. You'll never see a memo because it is not a lockstep firm. Every bonus varies based on the profitability and quality of work of the associate.
Last year B&M NYC paid bonuses to top associates that were equal to or surpassed NYC market for lockstep. Same will happen this year.
Of course, a lot of associates have less hours so not as many will be paid the large bonus. But those who have met their hours requirement (2000) will be rewarded for their profitability with a bonus, as it should be.
"Bottom line: the only reason to work in one of these hellholes is for the money. If that disappears, then their entire appeal disappears. Just outsource all of this garbage to India and get it over with so students will realize they need to find something else to do with their lives."
Best comment ever.
Wow. The absolute repugnance of this whole whine session is unbelievable. Real people losing their jobs, and you over-paid geniuses (which supposedly represent the top of our illustrious profession) are grousing about just getting 17K as a bonus.
Congratulations you souless winners. I'd love to see what would happen to some of you people if you really had to make it in the "free market."
Wow. The absolute repugnance of this whole whine session is unbelievable. Real people losing their jobs, and you over-paid geniuses (which supposedly represent the top of our illustrious profession) are grousing about just getting 17K as a bonus.
Congratulations you souless winners. I'd love to see what would happen to some of you people if you really had to make it in the "free market."
I am glad I work at Schulte.
If you're a sweatsop but pay top dollar, more than other sweatshops, then you achieve an air of mystique, prestige one might say. Wachtell is a case in point and so too the CSM of yore.
But when you no longer pay top dollar, all you are is a sweatshop and there are many, many of those.
My prediction: half-skadden will drop out of the V5 next year. Still a fine firm, just not quite as prestigious any more.
omg...elie, stop being such a god damn sensationalist. a firm can be globally-diversified and still suffer from, oh, you know, a global downturn?
and as for simpson, why don't you read more carefully, especially to the very passages you quote: the chairman notes that they'll have a rough period; that it will take a year or two before things will turn around; and the mere fact that fees will be the same does not include the assertion that they will bill as many hours.
stop being such a shit-poor writer. trying to grab people's attention with unwarranted claims does not cover your ass for doing such terrible editorial harm to what was once a good blog. haven't you heard anything from your post yesterday trying to extrapolate some connection between 2006-2007 RPP figures and post-downturn bonuses?
"I strongly suspect we have got a rough period of time ahead" -- but sounds unruffled. He sees the markets turning around within a year or two
134: I'm no CSM apologist, but you're dreaming.
All this talk is absurd about this killing recruiting/associate morale at CSM/STB.
Here is the bottom line:
1. Current Associates - there is NO lateral market in-house or to other peer firms. NONE AT ALL. Everyone claiming people are going to pack up and walk are out of their minds. This was a safe move by both firms because associates cannot really go anywhere else anytime soon, and frankly, both firms would love to see associates leave to cut costs.
2. Law Students - to think one bonus season will hurt recruiting at top firms is ignorant. Hypothetically, if a non-top-tier firm (e.g., the Sidleys, Clearys, etc.... - basically not V5) pays Skadden level bonuses, and a law student turns down a Cravath offer to go their, well that particular student made a terrible choice. Although vault rankings mean nothing, the V5 firms have a quality-level of work that simply surpasses the firms below them. Especially in the worsening economy where M&A activity has almost halted, what deals (strategic, financial sponsors, or otherwise) are out there will go to the traditional "top-shop" M&A practices (e.g., Skadden, STB, Cravath, S&C, WLRK, etc..). Yes STB was very heavily reliant on PE shops for deals in NYC, but they also have a very strong strategic M&A practice (look at the recent headlines of the only deals going on.....).
End of rant: Basically all the "end of the world" talk for CSM and STB is without merit.
Who gives a crap about all this?
*takes my paltry paycheck and goes to the movies on my Flex Friday*
- Gov't Lawyer
132,
Perhaps I am wrong, but I don't understand why people get so fed up over BigLaw associates whining about less-than-expected bonuses.
1) Many BigLaw associates (especially in the NYC market) view bonuses as deferred compensation and have included the bonus into their perceived salary expectations. This is the best way to justify working in NYC over DC, where bonuses are not quite to the level of the bonuses in the NYC market in recent history.
2) If you aren't a BigLaw associate or partner, why are you reading ATL and posting negative messages about associates whining about salary? Why do you even have interest in ATL? Do you get something out of trolling legal blogs and kicking members of one of the most highly trained professions in the world while they are down? For the first year that expected to make $190k and planned accordingly, it is completely understandable that said person is upset when they find out they will make $183k instead. That is $17k less to pay towards rent/mortgage or student loan repayment.
If there were a blog for your profession (I'm guessing something menial) I don't think you would see lawyers trolling it and making fun of you when your $40k salary is reduced to $35k and you can't pay down your community college loans.
125,
106 here. Look, clearly bonuses are not technically an entitlement. We all know the market sucks. I will gladly take a CSM bonus and keep my job if that's what it comes down to.
But, that doesn't mean that we can't feel like we're being taken advantage of. Look at 106's points. The fact is that we're being asked to take something like a 70% cut in bonus pay, something like a 17% cut in my total compensation. The reason for this is that other associates in other departments are struggling; I have still been busy this year and have earned my firm more money than in the past. To the extent that bonuses are based on the past year's performance (they are), that stings for those of us that have still been busy. And I assure you that if the partners are taking a similar hit, most of us will feel less betrayed, but again they signed on for a different risk/reward scheme.
I'm not at a lockstep firm; my firm only gives bonuses if you make 2000 hours (and nothing below that). Yet I get the feeling that my firm will use this as an excuse to pay CSM bonuses. I just hope this brings an end to the lockstep system, which has never made any sense. People who weren't busy this year don't deserve a bonus - the bonus is to make up for the toil and hours, not just for showing up.
More likely prediction for law student behavior: we stop looking at bonuses as anticipated compensation, then compare our choices. Suddenly 145k in Atlanta (with a big house and a little life), 160k in Dallas (similar), 110k in generic Midwest and Southern cities, and 160k in Chicago look a hell of a lot better than suffering through New York and DC at a lower COLA salary. The bonus was the kicker--prestige only matters to those with little breasts or penises.
Elie's always got periodic agendas, hasn't he? One week it's promoting Democratic politics; the next it's advancing gay marriage; now, it's Cravath bashing based on poor evidence.
The only two things consistent in his writing? shit quality and pushing his own views.
Why is it that every time we have a post about layoffs or crappy bonuses a chorus of idiots slinks out of the wood work to chastise all of us for being entitled little shits? Has ATL become a haven for bitter, out-of-work, i-banker trolls who now wish that they had gone to law school?
agree with 135 regarding comments from simpson's mp. oh, and elie is a drama queen and an ass.
It's simple:
CSM does difficult, big-ticket deals. They aren't happening with much frequency right now.
Skadden does simple, every-day deals. They bring in less money than the deals CSM typically does, but are happening more regularly in this economy than the big-ticket deals.
I'll leave it to you to decide which you find more prestigious.
the only thing worse than a bragging Skadden troll?
Elie Mystal
a close second:
David Lat refusing to acknowledge everyone's complaints about Elie Mystal
If people didn't believe that salaries (including bonuses) would stay relatively stable, they would not happily enter into $150,000 of debt. Of course, majority of students don't get the highest paying jobs, but the vast majority of entering students believe they will.
If people didn't believe that salaries (including bonuses) would stay relatively stable, they would not happily enter into $150,000 of debt. Of course, majority of students don't get the highest paying jobs, but the vast majority of entering students believe they will.
I don't understand all the drama surrounding bonuses. It's not like you guys get legit, wallstreet type bonuses anyway. Freaking rounding error in the bigger scheme of things.
Simpson cut back on bonuses because we are going to 190 in January.
- STB Partner
This idea of entitlement kind of misses the point. In reality, most BigLaw lawyers would agree that the bonus is part of ordinary compensation. The bonuses could be paid over the course of the year but there are good reasons not to do so. First, firms need to manage cash flow and because of the nature in which most clients pay their bills, firms are typically most cash flush at year end. Second, firms can use the bonus to control retention. Most people who are going to leave will do so shortly after collecting their bonus (otherwise they will risk a large portion of it). So firms will have a sense in the first quarter of the year about what their staffing levels look like. Finally, the bonus can be used to ensure some minimum level of productivity. Otherwise, though, the bonus is understood to be part of one's base compensation.
Many firms are moving towards a "market plus" model, where high performers are given some discretionary additional bonus. I would not be suprised if more firms move in this direction this year. You keep the fixed bonus low for the entire associate body, but you can privately pay those who you really don't want to lose. So if you are someone who performed a large number of high quality hours, you should not worry too much.
the thing to watch out for is how firms are able to retain their midlevels. If you are in your 5th year, you've just been told that this year and next are going to be down on compensation. After that, you pretty much need to bank on partnership - not many firms hire lateral senior associates. So if you did not intend to stick it out for partnership at one of these firms, it would probably be a good idea now to move to a firm where you have a better shot at partnership now.
Damn! Rick Rolled by 65. *shakes fist* I'll get you 65!
Hello everyone,
Remember at the beginning of 3L year when your risk-averse self picked a lockstep firm over an hours-based firm, because you did not want to risk the 1% possibility that you'll bill <30 hours a week? Remember when you decided to go with guaranteed flat pay instead of merit/hours-linked pay?
Here's the reason why your bonuses are so low. You're at a lockstep firm. Sucks to work more than average and not be recognized for being above average, doesn't it? Your peer lawyers with low hours have no incentive to find more work and make more money for the firm, unless they're made to do so.
Love,
Kirkland & Ellis associate
And with this post, I am done reading ATL. There has been a noticeable decline in the quality of the article on this website and a noticeable uptick of unjustified meanness- i.e., referring to 2 very prestigious law firms as "half-skadden" and "skadden-mart." Goodbye cruel blog!
154 = Skadden-Mart-bound 3L
145: FAIL. skadden was on 6 of the top 10 deals through the first half of 2008.
LOL at you parroting outdated BS.
139: buy a calculator.
Fail
154 3L offering to pay studio apartment security deposit in prestiges.
prestige takes a hit when you cant pay your associates but half of what a cross-town firm pays. we should all riot outside CSW for making this okay for other firms to do.
Ahhhhhh! Rick Rolled by 65! Damn you 65!
153 = RACIST
Certainly not going to defend Cravath here, though the story is a bit complex and there is truth to better reduced bonuses than layoffs. And I think you can clearly say that Cravath has forever conceded #1 vault to Wachtell, and is in danger of just being in the "next group" rather than ahead of Simpson, S&C, Skadden, etc. (The other thing to keep in mind is that this bonus thing comes after salaries have been dramatically increased in the least few years.)
But good lord, Elie has lost his mind with the hyperbole on these articles. You'd think Cravath, rather than lay off employments, simply gassed them to death. In a previously article Elie was chastened a bit by Lat when he pointed out that this kind of thing has happened before and isn't the end of the world. I mean, we all just have to see how it shakes out. The shill and shrill bombast is a little over the top, to say the least. ("God-damn America!" Rev. Wright style.)
The economy is down, and it does not look like it will recover. CSM did a lot of work for investment banks; STB did all private equity work, no surprise they are suffering. We'll all see how the other firms play this out.
Ha, 154! I didn't know paralegals at top firms were so self-conscious about reputations!
You know what? All this Mystal criticism has become ridiculous. I'm a white, Christian, flyover-state native who voted for McCain, would have voted for Prop 8, and thinks New York is a hell-hole. I have nothing in common with Elie and I detest his political views. But he's improved remarkably over the past month or so and the site is far better than it was a year ago (or two years ago). Lat was a good editor, but the scope and substance of the posts have improved so much since his departure (just naturally as the blog has grown).
Whoops, said something that wasn't ironic-hipster-kneejerk on a blog. Expecting the axe...
S&C MATCHED SKADDEN - MEMO TO FOLLOW!
A Middle Eastern potentate called a meeting of the wise men in his kingdom and he said "I want you to gather all the world's knowledge together in one place so that my sons can read it and learn." The wise men went off, and after a year, they came back with twenty-five voumes of knowlegde. The potentate looked at it and he said, "No. It's too long. Make it shorter." So the wise men went off for another year and they came back with one single volume. The potentate looked at it and said, "No. Still too long." So the wise men went off for another year. When they came back, they gave the potentate a piece of paper with one sentence on it. A single sentence: "This too shall pass."
As you look around and see things falling apart around us, just remember that there have been many more great catastrophes from the Black Plague that killed 30-60% of Europe's population (that really must have felt like the world was falling apart around them) to WWII during which 70 million people died. This world has endured a lot, good and bad, and all good things and bad things pass and we move on.
Bonus situation sucks and I feel bad for all of us, but this too shall pass.
"Here's something to keep an eye on: If firms like CSM and STB report PPP equal to or higher than last year, associates at those firms really have reason to be angry." -34
Has no one on this site heard of accrual accounting? PPP won't be hit this year - at least not in a big way. This quarter's billables are down and firms won't feel the deficit until the first quarter of 2009 when they start collecting the money. But they can see the bloodbath coming and the partners have no idea when it will bounce back.
And anyway, you all sound moronic with this "evil Mr. Moneybags" talk about the partners' money. Maintaining high PPP is crucial; that's how firms retain partners and the clients they bring. If PPP dips too far, partners start jumping ship. If too many partners leave, the firm becomes insolvent - anyone ever heard of Heller Ehrman?
CSM has announced a supplementary bonus, payable in prestiges. If you are a 7th year, you will receive $30,000 in United States dollars, and the functional equivalent of $30,000 payable in Cravath Swaine & Moore LLP Prestiges.
CSM PrestigePoints are convertible to STB PrestigePoints at an exchange rate of 1:1.32.*
CSM PrestigePoints are also convertible to SchruteBucks at a rate of 1:47.5.*
Real-time quote as of November 25, 2008.
Thank you Partner 166.
Oh, can I borrow $30K?
if i was elie, i would fabricate a memo from S&C or weil or something which matches last years bonus + special bonus. after 6 hours or so (and 1500 posts), i'd retract it, saying it was a bad tip or something. that firm's associates would be way too agitated for the firm to lowball too much, and they'd likely be pressured to match skadden. if that firm had 300 associates and paid on extra 30k/associate that they wouldn't have otherwise, that equals $9m in associates' pockets that elie was directly responsible for. if just one other firm then felt compelled to match, that would be $18m that we would all credit elie with.
Where can I find a chart of biglaw base salaries?
if i was elie, i would fabricate a memo from S&C or weil or something which matches last years bonus + special bonus. after 6 hours or so (and 1500 posts), i'd retract it, saying it was a bad tip or something. that firm's associates would be way too agitated for the firm to lowball too much, and they'd likely be pressured to match skadden. if that firm had 300 associates and paid on extra 30k/associate that they wouldn't have otherwise, that equals $9m in associates' pockets that elie was directly responsible for. if just one other firm then felt compelled to match, that would be $18m that we would all credit elie with.
129 - B&M has a July 1 to June 30 fiscal year, and they did not discuss bonuses until yesterday?!? When I worked there, their pitiful, below-market bonuses were paid no later than September.
BOOM...
S&C and Cleary match Skadden
Do they now jump over Cravath and STB to V2 and V6?
Discuss
The CSM quote says that they are geographically diverse only. It does not suggest that they have diverse practice groups. Trying to twist their words really isn't great journalism, even for a gossip site.
You are mischaracterizing the STB quotes even more. The firm said that fees (e.g., the amount charged for each billable hour) will probably not be reduced due to client pressure. That was probably in response to a specific question. That doesn't even imply that income, profits, or bonuses will stay the same. And the rest of the quotes from the STB guy show that he really appreciated a market downturn that will hurt.
116
You are FULL OF SHIT!
Many people have been laid off who have been working and who billed over 2100 hours this year and who were on track to make bonus. Partners have decided that PPP is more important than keeping good legal talent on board. If you really think your hard work and hours billed will keep your job secure then you must be smoking some really good stuff. The only thing that will secure your job is having YOUR OWN CLIENTS! Nothing else matters dipshit.
151: Just because "most BigLaw lawyers would agree that the bonus is part of ordinary compensation" does not make it so. If it were, then it would be called "salary". Or do you not get that at your firm?
173,
129 here. June 30 fiscal, but October 31 billing year. Different years for fiscal and billing purposes. Who knows why they do it that way. But the June 30 fiscal screws them for ranking purposes because they get ranked based on numbers from a prior year. They pay bonuses in December and class year gets bumped January 1 like most other firms.
Anyway, I'm speaking about NYC only, where they have made a big effort to increase stature in NYC. Its a global initiative. Common sense really. You can't be the global leader without having a strong NYC presence, which B&M lacks right now.
"Bonus can be used to ensure some minimum level of productivity." And therein lies part of the problem at BigLaw - decline to mediocrity accelerated by intro of GenY
131 - I'd love to see what would happen to some of you people if you really had to make it in the "free market."
You've already seen what would happen. We would do better than almost every one else in High School; ditto for college; ditto for law school. We would then be rewarded with the best jobs at the best law firms.
And for all of those who complain about the sense of "entitlement" of associates at big law firms -- the outrage and resentment we feel stems from the hypocrisy displayed by greedy partners who hoard firm profits for themselves, at the expense of associates, and with the pretense that the lower bonuses are about sharing the pain with their clients.
131 - I'd love to see what would happen to some of you people if you really had to make it in the "free market."
You've already seen what would happen. We would do better than almost every one else in High School; ditto for college; ditto for law school. We would then be rewarded with the best jobs at the best law firms.
And for all of those who complain about the sense of "entitlement" of associates at big law firms -- the outrage and resentment we feel stems from the hypocrisy displayed by greedy partners who hoard firm profits for themselves, at the expense of associates, and with the pretense that the lower bonuses are about sharing the pain with their clients.
131 - I'd love to see what would happen to some of you people if you really had to make it in the "free market."
You've already seen what would happen. We would do better than almost every one else in High School; ditto for college; ditto for law school. We would then be rewarded with the best jobs at the best law firms.
And for all of those who complain about the sense of "entitlement" of associates at big law firms -- the outrage and resentment we feel stems from the hypocrisy displayed by greedy partners who hoard firm profits for themselves, at the expense of associates, and with the pretense that the lower bonuses are about sharing the pain with their clients.
131 - I'd love to see what would happen to some of you people if you really had to make it in the "free market."
You've already seen what would happen. We would do better than almost every one else in High School; ditto for college; ditto for law school. We would then be rewarded with the best jobs at the best law firms.
And for all of those who complain about the sense of "entitlement" of associates at big law firms -- the outrage and resentment we feel stems from the hypocrisy displayed by greedy partners who hoard firm profits for themselves, at the expense of associates, and with the pretense that the lower bonuses are about sharing the pain with their clients.
180-183: you undercut your position by not being able to accomplish simple act of posting ONCE!
#179, yep we Gen-Yers sure are the problem... just don't bill 1600-1800 the same way you Boomers and X-ers used to. I'm sure that the 40-50% increase in billables produced directly corresponds to the increase in mediocrity.
Face it: you were fat and lazy, and you figured out how to profit off the fact that we're not. Congrats--it's pretty ingenious.
180-183: you undercut your position by not being able to accomplish simple act of posting ONCE!
180-183: you undercut your position by not being able to accomplish simple act of posting ONCE!
187 (180-193??) - nice try copying/pasting and posting, but no cigar this time! -186 (only)
129/178 - I was in SD office where no one aspired to be a global leader. I think they're down to 20 bickering attorneys by now...
180-183: arrogant moron. if partners at your "top firm" weren't greedy then it wouldn't be a top firm. PPP = prestige. also, what did you think you were signing up for? legal summer camp? if you don't like making money for the people who own the company you work for, LEAVE.
What does all this "prestige" mean to all these NY lockstep associates who are probably getting lower bonuses than associates who don't work at lockstep firms and who don't work in NY? Or is it that not having work makes you so prestigious?
Skadden is, was, and always will be, even if ever so slightly, inferior to Cravath. Skadden is a great firm to be sure, but history is history. One year is not going to change 150 years of pedigree. Cravath is not laying anyone off, whereas there are layoff rumors about Skadden. Ex-Skadden Elie is so jealous of Cravath it is kind of pathetic. Just because it had litigation's highest PPP in the year 2007, and Chesler admits the firm is highly diversified and will be fine, does not mean that the firm did amazingly well this year as in years past. Bonuses are not to be expected; they are just that, bonuses. In bad times, bonuses go down. If anything, Cravath should be commended for not caving into Skadden's pressures if it does not think it is smart to pay out full bonuses this year. Take your bonuses this year. Good for you. I am happy for you. We'll see who is around in another 100 years. All this Cravath hating proves only one thing: when you are at the top, everyone is going to look for any reason they can get to take shots at you. It's a blessing and a curse. Glad to be blessed.
185, get over yourself. "40-50% increase in billables" (which, in and of itself, is subject to dispute) has a very different meaning if one is talking about hours billed vs. billables paid. Also, engage in a little historical comparison of starting salaries and hours requirement and you'll notice this startling fact: the latter increased as the former increased. Increase in billables "produced" does not necessarily mean increase in productivity. Ever occur to you that maybe it just takes GenYs more time (cough*padding*cough) to do the same work?
190 - You beat me to it. Just as a bonus is not the same as a salary, associates can't lay claim to portion of a firm's profits. If they could, then they would be equity partners and not associates. BigLaw associates are supposed to be so smart and they still can't figure this out?
Does anyone find it funny that partners are now trolling ATL to tell associates how greedy and stupid they are. News flash, maybe you should get off ATL, bring in some business, and keep your associates busy.
Amazing.
185, you also made the mistake of assuming that I'm not GenY. Sorry to disappoint, but I'm a GenY raised by weird parents who taught me certain bizarre and apparently bygone concepts.
179/193
#193, sarcasm and exaggeration aside, are you really suggesting that real revenue per attorney and hours worked per attorney have NOT increased dramatically in the last 30 years?
What does all this "prestige" mean to all these NY lockstep associates who are probably getting lower bonuses than associates who don't work at lockstep firms and who don't work in NY? Or is it that not having work makes you so prestigious?
Anybody who claims to be an authority on whether attorneys consider bonuses part of salary is an idiot. There clearly is no consensus. Partners think of it as bonus; associates think of it as salary.
137 nailed it. Like it or not, you're not going anywhere in this market. At least not in droves.
Did anyone else know that Elie was obese? 'Nuff said.
If anyone here believes that attorneys over the age of 29 are posting comments on ATL, I have news for you.
The comments section is a cesspool for the young, immature and clueless. See above for support.
The way I look at it, I would rather have all my colleagues around 8 months from now and take a $12k (post-tax) hit. I think of it a bit like welfare except I actually know the people. My hours are significantly lower and expect that to continue for the first half of next year, so this bonus seems to comport with that. On the other hand, if PPP is up?
-4th Year STB Associate
176, I did not say that the people who have been laid off haven't been working, but thank you for your mis-placed ire.
-116
I'm a third-year lit associate at Sidley - NYC. Morale here is low. We're expecting bonuses even lower than CSM. Not much work to go around.
197, no at all. I don't know enough to go back 30 yrs but indisputable that revenue per lawyer and hours worked shot up over the years (as well as rates billed out to clients). But that's not the point. I was responding to 185's assertion that 40-50% increase in billables produced was somehow evidence of productivity. First, my original comment was directed more towards mediocrity in thinking, not in work product. Second, I was merely noting the relationship between starting salaries and hours requirement. For example, in '97, my bro was a first yr at 85k and 1500 hours. Fast forward to 2008 at 160k and 2000 hours - almost 200% increase in salary but just alittle over 30% increase in hours.
Let's face it, we're not billing 2000+ hours for the fun of it. Most do it to meet the firm's minimum requirement as objective measure of performance, others do it because of work load and still others do it for bonus payouts. Contrary to what 185 suggested, working 2000+ hours has nothing to do with being more productive or motivated. It's just a fact of BigLaw practice today - we need a minimum of 2000 hours because that's what we're paid to work.
the pledge, the turn, and the prestige...
they draw you in
you chase the illusion of a better life, and
, , where have they placed your soul? and the money is nowhere to be seen!
there's your prestige.
Skadden is, was, and always will be, even if ever so slightly, inferior to Cravath. Skadden is a great firm to be sure, but history is history. One year is not going to change 150 years of pedigree. Cravath is not laying anyone off, whereas there are layoff rumors about Skadden. Ex-Skadden Elie is so jealous of Cravath it is kind of pathetic. Just because it had litigation's highest PPP in the year 2007, and Chesler admits the firm is highly diversified and will be fine, does not mean that the firm did amazingly well this year as in years past. Bonuses are not to be expected; they are just that, bonuses. In bad times, bonuses go down. If anything, Cravath should be commended for not caving into Skadden's pressures if it does not think it is smart to pay out full bonuses this year. Take your bonuses this year. Good for you. I am happy for you. We'll see who is around in another 100 years. All this Cravath hating proves only one thing: when you are at the top, everyone is going to look for any reason they can get to take shots at you. It's a blessing and a curse. Glad to be blessed.
I am so happy I'm just a server at McDonald's!!
208, by your logic, all things charged as TTTs are "at the top."
If you aren't happy with your bonus, there are always other careers available.
http://www.pinkcoyote.net/creativegrooming.html
190. Your response to my post is a complete non sequitur- but I shouldn't be surprised. Your brain is likely sub standard - given the resentment you demonstrate towards people more successful than you. I like working at a my big law firm. I don't mind making money for the partners. I dislike being lied to. That's what I dislike about Cravath's bonus announcement.
Sincerely yours (You f'ing prick),
180-183.
Anyone have any idea how big a Lehman creditor STB is? It had to hurt bad to lose a big revenue stream and also lose a bunch of receivables for work already done.
208, who gives a rat's ass which firm is going to be around in a 100 years? That is beyond Kool Aid drinking (unless, of course, the Cravath Kool Aid is the fountain of youth). I am at neither Skadden nor Cravath, but Cravath might have caused a lot of other firms to follow their crappy bonus trend. That is why people are hating on Cravath right now, not because we all wish we could work at your wonderful firm. Get a life.
That's right, cling desperately to your withering notions of "prestige," you little Half-Skadden minions. How much currency do you think "prestige" holds for former Lehman Brothers or Bear Sterns employees?
Cravath's precipituous fall began years ago. Since 2005, the Corporate Board Member/FTI Consulting ranking of corporate law firms--based on the opinion of corporate counsel--has consistently ranked Skadden at #1. Guess who pays the bills? You think anybody gives a shit what lawyers think of themselves? Vault = irrelevant to the corporate world.
Look, Cravath failed to diversify and now they're suffering (or at least that's the line they're pitching to the associates whom they just ass-raped). Suck it up bitches.
It must suck to be in the NY market and have to worry about layoffs, bonuses, and all that. I've worked a at a large multinational firm in satellite offices (both Philly and LA) where I was treated as a veritable prince among men. The details below.
I began my legal career as a first year at Dechert - this was a natural fit for me as I was born and raised in Philadelphia, just west of the Schuylkill River (go EAGLES!). As a 2L during OCI, I had received offers from Latham-LA (having extended family in the area) but just couldn't leave my Philly roots behind.
Most of my spare time, when not billing hours, was spent shooting basketball with some guys I grew up with. I tended to frequent the playground around my old school. However, one unfortunate afternoon, a few gentlemen, probably up to no good, were making a bit of a ruckus in my neighborhood.
It was a pretty low-grade tussle, nobody seriously hurt or anything, but it caused my mother to get rather scared, who pushed me to lateral to Latham-LA, stating, in no uncertain terms, that I was "moving with my auntie and uncle in Bel Air"
I whistled for a cab and when it came near,the License plate said fresh and had a dice in the mirror. If anything I could say that this cab was rare, But I thought now forget it, yo holmes to Bel-Air
I pulled up to a house about seven or eight. And I yelled to the cabby yo, holmes smell you later. Looked at my kingdom I was finally there To settle my throne as the prince of Bel-Air.
Hey 214, if your bullshit firm had any balls it wouldn't care what my firm did. Blame your own choices.
This blog is useless, as are the comments. All anyone ever does is hype their own firm and bash others. Everything is conjecture. Everything is all b.s. All the top firms are going to be fine, everyone is going to stay rich. Why does everyone overreact to such insignifcant things?
I have no idea what morale is like- or what bonuses will be like- but Sidley NY is very busy on the litigation side.
over here on the corporate side however...
"2) If you aren't a BigLaw associate or partner, why are you reading ATL and posting negative messages about associates whining about salary? Why do you even have interest in ATL? Do you get something out of trolling legal blogs and kicking members of one of the most highly trained professions in the world while they are down? For the first year that expected to make $190k and planned accordingly, it is completely understandable that said person is upset when they find out they will make $183k instead. That is $17k less to pay towards rent/mortgage or student loan repayment.
If there were a blog for your profession (I'm guessing something menial) I don't think you would see lawyers trolling it and making fun of you when your $40k salary is reduced to $35k and you can't pay down your community college loans."
I guess it sucks to know you paid all that money for your Ivy education to learn to reason like this?
All I'm saying is get some perspective.
A) You're not forced to take those jobs, so to act like its some kind of reward to which you are entitled because of your slave labor conditions is ridiculous.
B) No one takes you associates in NYC seriously anyway, and this is partly why. You're glorified paper-pushers anyway. Congratulations. I'm a lawyer in a "generic" (to quote a poster above) Southern city & I've seen lawyers in my mid-size firm run circles around NYC lawyers more times in my 2 years of practice than I can count.
C) There are actual people in this country who no longer have a job (40K or otherwise) and it is simply obscene (and unbefitting )of someone in a "highly trained profession" such as yours to moan about how "little" money you make.
This whole discussion is starting to remind me of that Hitler breakdown scene from Der Untergang.
217, you are a jackass. My firm hasn't announced at this point, so it is not a bullshit firm (yet). My point is that Cravath announced its crappy bonuses early, and that might have set the market for many, many other firms looking to cut comp. This is meant to explain why people from many firms (not just mine) are disliking Cravath at the moment, rather than your rather self-serving theory that we all secretly want to work at Cravath. In the meantime, I'll go back to blaming my own choices (like missing out on the chance to work with wonderful people like you).
Happy Thanksgiving,
214
for last ten or fifteen years goldman paid jr bankers less of a bonus than any other investment bank (crap ibanks paid the most). money is just a way of motivating ppl to show up to work, and goldman's prestige was a pretty good substitute motivator -- they never had trouble hiring/retaining people. if cravath and other prestige shops were smart they'd eliminate the jr associate bonus entirely (assuming no reasonable reliance on such a bonus by those associates); in this market ppl would still show up to work. maybe they could even use this moment to ratchet back from the $160k paycheck and make us work less hours. seems like a win-win situation
216 - you started out well... you couldn't keep it up for two more paragraphs?
How many Cravath 7th year associates do you think even exist?
I'm not saying anyone wants to work at Cravath or doesn't, it's just annoying for people to talk so much shit, and even more annoying when Elie is so obviously biased and looking for any story/excuse to take more potshots at a firm I obviously like enough to defend (even though I'm being negatively affected by its choices this year). I know people who've lost their jobs, and they'd kill for a lowly bonus right now rather than be fired. People need to be accountable for themselves- if their firm decides to reduce bonuses, it is their firm's choice-- and should have nothing to do with what Cravath does. Exactly, blame your own choices, and your firm's choices- not Cravath's. I'm sure Cravath didn't do as well this year as it did last. So, logically, bonuses go down. And the prestige has everything to do with it. If a lower-tiered firm announced crappy bonuses, no one would care. It's because Cravath did. So, of course, take this chance to rag on the prestigious firm. It has nothing to do with whether you want to work there or not.
225 - get back to work so you can earn your half-Skadden bonus.
217/225- Stay golden Pony Boy. I sincerely hope that your loyalty is eventually rewarded.
Respectfully,
214/221
DPW JUST MATCHED SKADDEN!!!
None of the commentary on this thread makes any sense to me, nor should it to anyone else. Whether it's just someone trying to lie for no reason (see 228), someone jumping to defend their firm (217), others trying to shit on other firms (see mostly 1-228), or anything else, none of it is useful or meaningful.
How many firms have released bonus info? Four, five? All are down from last year, whether by a lot or by a little.
Every comment on bonuses is premature until other information comes out for the law firms, e.g. revenue, profits, RPP, RPL, PPP, or whatever other acronym you want to string together. Until, then, talk is meaningless.
If Cravath's (or Simpson's) numbers stay consistent from last year, then the firm is obviously going to look bad. If their numbers have fallen off, then their reduction in bonuses was an obvious and intelligent decision.
If Skadden's revenues and or profits went down significantly, and the whole bonus fiasco hurts their numbers, they look foolish. If not, they look like the grandaddy of all law firms, and kudos to them.
In two years, everything will be back to normal, the V10 will still be the V10, up a place, down a place, who cares? All the animosity, for what? I used to read this blog because it was informative, had a lot of inside scoop, and was often funny in an irreverent (but not outright disrespectful) way. Now it is just grandstanding and biased. Oh well, I've wasted enough time commenting already, but I've said my peace.
225. How did you end up at Cravath with that kind of reasoning? Of course it has everything to do with whether we want to work at Cravath or not. With a half Skadden, the allure of Cravath has quickly gone down the toilet.
218. Perhaps 20K is just "b.s." to you, but it means a lot to someone like me who came from a working family background and incurred a large amount of law school loan debt. Don't come on ATL if you are above this discussion.
230- my comment was in response to someone else's response to my previous post, in which I was accused of thinking everyone wants to work at Cravath, so your comment makes no sense. Why don't you read up before making a useless post. Now who has the stupid reasoning?
In order to preserve associate morale, a firm like Sidley, which pays hours based bonuses, should pay bonuses based on what Skadden has done and not what Cravath has done. In order to earn a full bonus, an associate at Sidley must bill at least 2000 hours. Presumably, not many associates would have reached 2000 billables during the last bonus cycle. Therefore, paying associates who have billed at least 2000 hours should not cost the partners as much as the potential losses due to lower morale.
I am with you 106 and 233.
Why are we not taking into consideration that the firms that have announced half-Skadden bonuses have to pay bonuses to everyone (no hour requirement).
Firms that do have an hour requirement should reward those that have made the hours requirement and who are most likley to be in the busy groups within the firm. If they slaved away this past year and may continue to do so during the coming year (and yes, I acknowledge that comes with greater job security) they should be paid bonuses at least at last years level (minus the Special Bonus).
I am with you 106 and 233.
Why are we not taking into consideration that the firms that have announced half-Skadden bonuses have to pay bonuses to everyone (no hour requirement).
Firms that do have an hour requirement should reward those that have made the hours requirement and who are most likley to be in the busy groups within the firm. If they slaved away this past year and may continue to do so during the coming year (and yes, I acknowledge that comes with greater job security) they should be paid bonuses at least at last years level (minus the Special Bonus).
I am with you 106 and 233.
Why are we not taking into consideration that the firms that have announced half-Skadden bonuses have to pay bonuses to everyone (no hour requirement).
Firms that do have an hour requirement should reward those that have made the hours requirement and who are most likley to be in the busy groups within the firm. If they slaved away this past year and may continue to do so during the coming year (and yes, I acknowledge that comes with greater job security) they should be paid bonuses at least at last years level (minus the Special Bonus).
I am with you 106 and 233.
Why are we not taking into consideration that the firms that have announced half-Skadden bonuses have to pay bonuses to everyone (no hour requirement).
Firms that do have an hour requirement should reward those that have made the hours requirement and who are most likley to be in the busy groups within the firm. If they slaved away this past year and may continue to do so during the coming year (and yes, I acknowledge that comes with greater job security) they should be paid bonuses at least at last years level (minus the Special Bonus).
206 - ask your Bro what his law school debt load was back in '97. Here's a hint: a lot less than first years in 2008. To illustrate, tuition at a T6 law school is ~45k this year and rising each year. In 2000 is was only 30k, and likely even less in 1994-1997. Consider pegging salary to tuition and see what kind of correlation you find.
Also, I wonder how much PPP increased from 1997 to 2008? But I guess by your reasoning, the partners are solely entitled to the windfall of escalating billing rates. I'm curious to see the historical ratio of total associate compensation to gross revenue at firms.
238 nailed it, Jessica Cutler style!
Seriously: starting salary has to be tightly correlated to the cost of the degree required to provide the service. Moreover, the rate at which our time is billed out, and the amount of time we spend at work, has jumped far more than our salary/bonus.
206 needs to log first three full years somewhere like CSM, S&C, or Skadden. Then maybe he'll get the idea.
Both 238 and 239 missed something: the cost of the JD isn't relevant to the taxes paid by junior associates, who see a near 50% effective tax rate on their compensation.
A Skadden first year with ~$130,000 in high interest, non-dischargeable loan debt didn't make $195,000 this year in salary + bonus. They actually made a little less than $100,000 in 2008, and at least $25,000 of that went to pay NYC rent. Wonder how much they were able to put toward the 6.8% loan debt?
!37 has it right. On December 13, we'll find out how many CSM associates have the audacity to leave. Look this is the ebb and flow of markets. There was a time when arrogant 2Ls demanded to know about partnership track during on-campus interviews. Firms obliged as they feared losing top talent to peer firms. Now firms feel like they have the better of the situation -- too many attorneys chasing too few jobs. And they are right.
What I expect is that fierce meritocracy is going to be put into the bonus structure. 1) Tiered bonuses are going to become the norm. When hours are low, firms have to set a floor to compensation tiers. And top firms will. 2) Expect firms to channel money into clerkship bonuses - more than they already do so. 3) If you are receiving a guaranteed bonus, there's a price -- Skadden attorneys, I am talking to you -- you may well be in line for a "surprise review" in March telling you that you are fired. I'd put that bonus in the bank because you're going to need it during the long an arduous job hunt.
- Attorney who braved a very choppy lateral market and gratefully found a job paying substantially less than my previous position.
240 - Wow, someone failed Tax , or is just talking out of their ass. Your top marginal rate is not your effective rate, and as bad as New York is, and it is bad, your top marginal rate from the feds is only 28% (before the bonus; 33% on that bonus money, isn't that a kick in the junk).
New York as 50% hell comes from people who make so much money that the lion's share is in the top bracket. Most associates will never come near even getting into the 35% bracket (since you need to gross $357,700). Your partners pay that. Your senoir counsels pay that. Your banker jerk clients (used) to pay that.
You, as a junior associate, do not pay that. Not off of your salary, anyway. If you've got enough other income to be paying that, well, why the hell did you float those loans in the first place?
Make your hours - get your bonus!!!
242 = guy who doesn't pay state, city tax, or social security?
After ALL taxes and other deductions (health insurance, social security, etc.) a lawyer living in NYC gets almost exactly 50% of take home pay assuming they max out their 401k.
And yes, I double checked my last paycheck just to be sure.
To hell with prestige, I'm starting a meth lab
244,
It must be maxing out your 401(k), then, that is pushing your take-home that low. I contributed $12k this year to my 401(k), and still took home around 60%-64% of each paycheck (of the handful I just checked) despite federal, state, and city taxes.
That said, between the taxes, the rent, and the loans, it's hard to get ahead in NYC even with the admittedly great compensation associates get.
The fact that fees won't change doesn't mean revenues won't. Same fees, fewer hours billed, less revenue -- duh.
244 is doing something wrong, or he is counting some odd things in his tax bitching.
238, my bro was way smarter than me and got a nice package so his law school debt had to be pretty low (but guess his school was @ 30k/yr, total cost?) However, it's inaccurate to draw absolute correlation among law school costs, salaries, PPP without accounting for adjustment for inflation, cost of living, etc. Eg, renting a 1br in NYC was a lot less in '97 than now.
Look, I ultimately got a JD, not a PhD in economics and imagine that it's the same for you. Despite recent events to the contrary, the US still has a capitalist system. Partners run a for-profit business, paying salaries to attract requisite talent and setting billings rates at what the market (clients) can bear. You can't assume that any firm experiences a "windfall" without seeing the firm's financials. But even if there were a windfall, it's called "profits" - something associates are not entitled to but may benefit from via bonuses. Are you seriously saying that a firm is wrong to reduce/eliminate bonus payouts during a down yr so to shore up its capital reserves? And a historical ratio of total associate compensation to gross revenue at firms is meaningless unless it took into account firms' operating costs. It's equivalent to budgeting based on your monthly gross instead of net.
PS - 239, I usually refrain from insults but "seriously", your comment indicates high probability that you're an idiot. And I already did my time at "somewhere like CSM, S&C, or Skadden", thanks. So as some here say, suck it!
Cheers, all. Officially time to commence turkey fest!
125 wrote the following: That said, I agree that the demands are great and sooner or later attorneys will get it through their head that it's not worth the reward and firms will come to realize that huge salaries with the corresponding huge billable requirements are not the answer to retaining the best attorneys.
Here's a link to an article which periodically make the rounds. http://www.city-journal.org/html/7_1_a2.html
Written in 1997 but oh so applicable even now. For example: When an investment bank fires people for economic reasons, it says so. Those who are sacked quickly get jobs on the Street if there are any around. Law firms, however, are terrified to admit that they might have financial problems. Clients might leave them. Law students might shun them. So they put it about that the people they fire are just no damn good. They become unemployable.
Hm, sounds strangely familiar...
Skadden will likely slash people in performance reviews who will be told to start searching and won't get full bonus because of it (they already conducted "stealth" layoffs in the fall). They will also surely up the required billables one needs to get the full bonus or to be "in good standing" (likely to 1800 or 2000--used to be 1600).
Advice to first years everywhere, learn a lesson this year...bonuses TRULY are discretionary, if you don't count on them, you'll never be disappointed come the holidays...
251 = talking out of his/her ass