Blah blah

WTF is "association comp?!"

Bitches? Butt cheeks? Juicy insides?

This is a pay cut, no way around it.

Latham now pays below market.

"Latham now pays below market."

For now. Just wait, the rest of the market will adjust downward to Latham.

It is a race to the bottom now.

Wake up, associates. Law firms are businesses. You are entitled to nothing more than what the market will bear. If you want some leverage, form a union. If you want to be a partner, however, refrain from joining said union. The fact that so many of you seem to be shocked, shocked that this is happening (in the face of the worst recession in 70 or 80 years) reveals nothing more than the fact that your undergraduate educations would have benefitted from a couple of classes in economic history. Sorry, suckers!

By the way Elie, how many damn articles do you write a day? you're going to run out.

jeez at least give the 2nd years a bone and give them 165. This is embarrassing.

The third column of the chart should say 2008 shouldn't it?

Where it really hits hard is the jumps from junior to mid-level and mid-level to senior (e.g., 3rd to 4th was going to be a jump the equivalent of both raises from the prior years, combined). And it does sting for those litigation/bankruptcy associates who billed a ton this year and will bill a lot next year, too.

If firms insist on doing lockstep compensation, maybe a middle ground is a dual-tiered compensation structure? There would probably be a number of associates interested in taking lower pay levels for less hours. Or, you could advance people based on total number of hours worked, rather than class year (someone billing 2,500 hours per year is presumbably more experienced after 2 years than someone who hits only 1600 per year). Something along the lines of: If you hit a total of 5,000 hours, you will advance to a mid-level. It might take some people 2 years to get that, while it would take others 3 years, etc.

These ideas might not work (and I fully expect other ATL readers to shoot them down). But the present economic circumstances make it seem likely that firms can and should start thinking creatively about these issues.

It is just a matter of time before other firms freeze salaries as well. I wonder whether Orrick's proposed non-lockstep model might actually be an improvement.

6, 7 = embarrassing L&W apologists. No one else in the V20 is going to follow this nonsense. Some firms, maybe, but not the V20, including Gibson.

Remember you red it here first: by March 2009 many AmLaw 100 firms will retreat from 160 for entry level to either 135 or 145. If the economy continues to crater expect that number to fall to 125 with commensurate reductions in salaries for experienced associates. It will be back to where things were in 2000.

10 - No, I think Lat is saying that - at least so far - top NYC firms will be on that scale as of 1/1/2009.

Of course, that might change between now and then.

ALERT FOR KEY POINT ELIE MISSED

-----------------------------------------------

You people realize this is a DIRECT CONSEQUENCE of Latham's no layoff rule right?

How do you like that rule now? You just lost a raise so an unproductive associate can keep his job.

-----------------------------------------------

ALERT FOR KEY POINT ELIE MISSED

12 = Orrick managing partner.

Anyone have any theories on why they are doing this? Latham rarely (never, as far as I'm aware) goes first on anything. Their own memo says that bonuses are not announced until late January? Why break this news now? Was the firm about to go under? Will this really save them? Or is this just a way to push up PPP at the expense of associates who they know won't (can't) leave the firm in this market? Seems like they are almost daring people to leave before they have to start firing them and paying severance.

new grads, go to GDC instead!

18 - "Seems like they are almost daring people to leave before they have to start firing them and paying severance."

Good point. You could have said the same about Cravath and its lousy bonuses.

To everyone telling associates and law students they are greedy and should take what they can get:

DO YOU REALIZE HOW MUCH TUITION HAS GONE UP SINCE YOU WENT TO LAW SCHOOL??

As salaries rose in the late 1990s through 2007, law school tuition also increased but by proportionately more - by 100%. It costs $180,000 to go to law school now (tuition plus living expenses). Schools felt that since pay was going up so much they could jack up the price of a JD accordingly. Now that the economy is tanking, a pay cut with no commensurate decrease in tuition means that law students are going to get squeezed.

At the very least, understand that this is the associate/student perspective and it should not be dismissed solely as greed.

16 -- TRUE THAT. The only way a firm can continue to carry its entire bloated associate ranks in the face of zero attrition is by reducing the per-lawyer payroll. Duh.

There is no way this is going to be "market" for BigLaw in 2009. Sure, a few firms in equally bad shape will follow suit, but so long as a few V20 firms stay put the vast majority will not freeze salaries because of the impact it will have on recruiting. Also, it will be hard for L&W and the other salary freezers to justify billing rate increases, after it has eliminated one major increase in cost.

"Anyone have any theories on why they are doing this?"

Take a wild f'ing guess idiot. It's called not having revenue.

16- a cromulent point

General question then- which is a bigger reputation/recruitment hit?

Layoffs?

or sub-markettt salaries?

thoughts?

I'm curious- have associates at any v10 firms received confirmation of their 2009 salaries yet?

16: Here's a more salient point -

18 of the other 20 firms in the V20 also have not laid off associates (Simpson and White and Case being the exceptions). None of the other V20 firms is going to follow this. Latham is a rabid outlier and will suffer for this.

21 -- Damn right. I cannot believe how much debt I will have after law school. And how many folks have really paid of undergrad, too?

So you are looking at at least $200,000 in debt!

I am grateful to have a biglaw job lined up, but of course scared about how long it will take to pay off school. Let alone maybe losing my job in the not-so-distant future.

25 - that's a good poll question

Latham is hurting and is going first now in an attempt to set the market, much like Cravath did with their Half-Skadden bonus.

26 - Skadden confirmed class promotions to the expected 2009 salaries in the same personal memo that confirmed the full bonus.

Has S&C announced bonuses yet?

In the wake of the Latham pay cut, if S&C pulls a Skadden, they will soar in reputation and recruiting.

When do law schools start laying off professors in order to lower the price to attend school?

Oh, right, when less law students start showing up...

Or maybe never.

sub-market salaries.

25 - sweet use of the word "cromulent"

Latham can't set shit.

"In the wake of the Latham pay cut, if S&C pulls a Skadden, they will soar in reputation and recruiting."

lol. Yeah their rep and recruiting really needs a boost!

33 - Academia is not immune to the recession. University presidents are returning some of their pay:

http://www.nytimes.com/2008/11/23/education/23college.html?ref=education

10.

10-thousand.

10-thousand pay cut.

At Lathaaaaaaaam

This is probably where the top firms will be separated for the posers.

Vault tries to measure prestige. Well, lets see how well the so called prestigious firms do. Let the economy show us who really are the prestigious firms.

37 - This is S&C's big chance to leapfrog over Cravath and take second place to Wachtell.

Elie, add a total comp comparison with Skadden.

Skadden 1st years make more than Latham 4th years!

27 - Simpson hasn't laid people off. Why do people keep up with that completely unsubstantiated rumor?

21 -- How is your comment relavent to the 75-80% of law school graduates who don't get Biglaw, and have to pay back their $180K in loans on a $45K salary?

25 - It depends on who you are. If you are a slacker who only intends to bill 1000 hours, 500 of which are pro bono, goto Latham. They may pay you below market, but at least you make 160,000 to start for doing little to no work. On the other hand, if you are someone who just billed 2500 hours to paying clients this year, the salary freeze seems a little unfair.

In truth the answer is simple. Freezing hard-working associate's salaries so poor performing associates can stay at the firm will hurt reputation more than laying off the dead weight.

43: remember that denial is the first sign of a problem

http://www.law.com/jsp/article.jsp?id=1202423705772

7, I'm shocked, shocked I tell you that you are defending Latham's actions here. Partners like you are the reason law firms are laying people off and freezing salaries. If you were to get off your ass and make rain to justify your ridiculous salary instead of trolling ATL posts like this wouldn't happen.

44 = Loyola 2L

does anyone know if Wachtell has announced or given their bonuses yet?

38 -- Sweet!

With a few Presidents taking paycuts or giving back donations to their universities, the cost of education is sure to drop now. Yay! They paid off my loans for me -- woo-hoo!

Free law school for everybody!

43 - I'm just repeating what was in an earlier layoff table. I thought there was confirmation re: stealth layoffs. If not true, it would be good to see a retraction so others don't repeat the mistake.

Here's the argument in every firm right now:

Corporate or Finance Associate: Save my job. I'll keep my pay at last year's level and take a half bonus.
Litigation or Bankruptcy Associate: I want a raise and a double bonus. I billed 3000 hours this year so I should get the same treatment they got when they were busy.

Firm: We'll hold pay and cut bonuses. We value all of you.

2 years ago ina boom year:

Corporate or finance associate: I billed 2500 hours and securtized my sub-prime loans than Jesus. Gimmmeee big bonus and raise or I'll walk.
Litigation or BK associate: Tough year. No one sues in good times. I'll take what I can until I'm busy.

Firm: Those associates billing under 2500 hours will be in our second-level of compensation and will be put on probation. Corporate associates shall each be given a house in the Hamptons as a bonus.

See the pattern....

43 - See also:

http://www.thelawyer.com/cgi-bin/item.cgi?id=134149&d=415&h=417&f=416

http://abovethelaw.com/2008/08/nationwide_layoff_simpson_thacher.php

Checkout comment 17 from the post when Latham matched back in May:

"NY is not going to raise to 190K and you should be thankful for it. There is already going to be a fallout within the next year (mass associate firings, firms collapsing, forced mergers, etc) due to firms raising to save face when MOST of them simply cannot sustain the hit (i.e. increased overhead) financially. Most of you are to young to remember when this happened after the silicon boom raises when this very trend led to a major recession in the legal market. History is repeating itself."

Sound familiar?

Word is that Latham partners have to pony up six figures to meet some pension fund requirement. If they don't cut costs, partners would flee. They probably realize this is a bad move long-term but have to keep the firm at least solvent. There is the added problem that their cap markets and financing work was a big component of revenues--too big apparently.

44- I call them either A) Trustifarians, B) screwed

45- That's why performance based bonuses are enormously important. I like lockstep compensation, but an ENTIRELY merit based bonus system (i.e. your Latham slacker would get a chocolate santa as his bonus, while our 2500 hour man would get a stocking stuffed with 40k in hundreds).

- 25

oh and Mystal, please do a poll on my question, I think it actually has some relevance.

I didn't come to NYC to work for 160! If I wanted 160, I woulda gone to a shithole like Philadelphia!

S&C is irrelevant. Let's say they match Skadden (hah! Match Skadden!! Is this some sort of Jerry Lewis screwball comedy! Match Skadden!!) -- then in 2008 their current associates will get a few more thousand in their Christmas stockings than all the rest of the associates around town. Result? Nothing. While a coveted law student would factor this into her decision, she would discount it by what she's heard about how awful it is to work at S&C (see, e.g., Charney v. Sullivan & Cromwell, et al.). Come 2009, all firms will revert to mean.

45 - It's hard to say what's worse layoffs vs. salary cut (or freeze) for the offending firm's reputation. My gut says the salary cut is worse, but this is probably a reaction to the fact that Latham is the only top firm to have done it.

Truthfully, the only firms coming out of this "great recession" with their reputations intact are those that do not do layoffs and do not cut salaries (half-bonuses excepted).

Does anyone know if Wachtell has announced/given bonuses yet?

43 - just a matter of time though. or do you think otherwise?

52- the lament of the bankruptcy associate who has not seen the light of day in 3 months. I feel your pain brother.

ZERO! ZERO LAYOFFS!!! AH AH AH!!!!!

TEN THOUSAND! TEN THOUSAND DOLLARS POORER!!!!! AH AH AH AH AH!!!!!!!!!

Vault Ten? Not for long! AH AH AH!!!!

- Count Layoffula

What's Aaron Charney up to any way?

Let's see a poll on expected post-law school debt. (Or are we still pretending law students don't come here?) If salaries are going to start falling, ATL is going to have to help pressure schools to cut tuition.

To Latham Partners:

You think this is a better solution than firing tons of associates like you did in '90? You're wrong. This decision is just as bad if not worse. Your firm will suffer long and hard, again, for this short-sighted decision, just as it did in the 90s. Good luck getting back into the Vault 15.

Firms have already cut comp by a huge percent. Last year senior associates were getting $120k bonuses; this year they get $27k.

There is no excuse for cutting base salary on top of that when PPP's are still north of $2 MILLION dollars. NO EXCUSE.

Wait! Wait! Wait!!!

Is Latham not paying bonuses this year? Is Latham not going to match the half-skadden bonus? If you look at the pay freeze, it's less then the bonus. Why freeze an associate's pay by $10,000 and turn around and give that associate $17,500 as a bonus?

We've entered bizzaroo world. How much would L&W have to be hurting to pay no bonus?

Apparently layoffs at Latham aren't off the table, either. Firm doesn't want to go that route now (it was discussed but the freeze was selected), but no promises about what could happen in the future.

68 -

This is a sign of immense weakness. No other explanation. L&W must not just be hurting, it's suffering.

64 - Aaron Charney is now at Clifford Chance (even though he probably doesn't need to work, thanks to his settlement from S&C):

http://abovethelaw.com/2008/07/aaron_charney_clifford_chance.php

54, fallout from the silicon valley raise and the 2001 slowdown was de minimis. brobeck and cooley had mass layoffs, some mom and pop shops cut jobs and shearman's worldwide folly cost 80 associates their job, but otherwise there wasn't much to talk about. NY associates were fine, and those that were part of more aggressive performance reviews were able to find new jobs since other firms were hiring.

so that is to say, that old post about latham was idiotic.

latham is a sinking ship though. they wouldn't take that step unless they were remarkably cheap in a field of cheap employers, about to go belly up or some combination of both. while CWT and TPW have gotten the press, Latham actions effectively announced the firm to be a serious candidate for the Finley Kumble, Mudge Rose, Brobeck, Heller style deathwatch. Their associates are advised to begin their job hunt asap, the awful lateral market notwithstanding.

WALKOUT RESCHEDULED FOR TOMORROW

Today it was snowing and there was a long line at Subway. So we are planning on rescheduling the walkout to 9:30 pm tomorrow.

48 -- 44 actually = Fifth year out of NYU who fell into the "didn't get Biglaw" shallow end of pool.

walk it out

The countdown to Latham's dissolution has begun.

The wheels are in motion...now we just wait.

73- Post of the day!!

Except what are the corporate associates going to do all day and evening till 9:30?

Let's see where to start

Elie - you are an idiot and maybe you should pick up either the WSJ or a history book and read up on the great depression - a company/law firm telling its employee's that they are cutting their pay is directly related to deflationary pressure

Commenters - bitching about partner's shares - go start your own business if you don't like it - future recruiting - where are students going to go.

Lastly, grow up - the financial and economic issues facing this country are nothing that has been seen by this country in 80 some odd years. Be thankful you have a job because there are many lawyers right now that don't.

Relax, people. What Latham did reflects their own particular, unfortunate circumstances (overpaying in the lateral partner market). Real firms will not follow L&W on this.

72 is right. This is clearly the sign of a firm that is beginning its economic slide. This is also what happens when you grow for the sake of growth and without a disciplined plan. They brought in way too many lateral partners with very weak or small books of business (even as recently as three weeks ago from Mayer Brown!). Not good. Not good at all.

12 - do you mean Howrey?

anyone who thinks the gunners billing 2500 hours are getting frozen out is wrong. The firm is freezing salaries, and then they will pay merit-based bonuses. And if you billed 2500 hours, you're gonna get a huge bonus and it will be like your salary wasn't frozen.

The real question is whether Latham lowers its billing rates to coincide with lower pay

So now we wait to see if a group of partners leaves the firm. If that happens, the deathwatch officially begins.

Wachtell bonuses are out. They are, not surprisingly, lower than last year.

For all this to be at all OK PPP's better take a similar hit. Associates are losing 5, 10 % or even more of their total compensation. I wonder if partners will make that much less.

the freeze is for 2009, the bonuses are for 2008. It's not inapposite to freeze salaries and still give bonuses for 2008.

73 -- It was snowing at L&W's HQ in LA? LOLZ

"Wachtell bonuses are out. They are, not surprisingly, lower than last year."

DAMN IT ELIE WHY DO I HAVE TO HEAR ABOUT THIS IN THE COMMENTS?!

Remember when CSM announced and everyone thought everyone would follow Skadden and not CSM?

What happened?

Same thing will happen now with Lantham ... All race to the bottom!

78 = laid-off for performance reasons.

72 - Hit it on the head. Comments in the earlier post on the Latham death-dance freeze say that partners who were considering heading there are avoiding it like the plague at this point having been informed that, yes, in fact the firm is very close to folding.

Internally, the higher ups are saying everything is fine, but it is a lot like the final scene from animal house where all hell has broken loose on the streets and the one police officer is shouting "Stay calm! All is well! Everything is fine!" In reality the associates can see the writing on the wall and most doors were closed today as everyone rushed to update resumes in what is basically a futile attempt.

If this isn't a canary in the mineshaft event, I don't know what is.

One -- One Layoffula who jumped the shark.

Ahahahahaha.

86 - it was, in fact, raining in LA today, but then the freeze came, and the rain turned into snow...

91 - Nailed it.

DEATHWATCH

All I know is I have been billing 50+ hrs/a week through all of this, and they sure as shit better not cut MY pay as one of the %20 of people around here who COULD walk.

-cranky IP associate, still at work.

Don't you get it - the more you report on this stuff the more OTHER FIRMS WILL FOLLOW. Firms are scared to be first -- but not so scared to follow Latham or Cravath. Reporting all this negativity and race to the bottom stuff all the time is only hurting associates!

How come no one ever reports that it's partners PPP and the constant pressure to keep it growing -- even when unsustainable -- that is causing firms the financial stress, not the associates who are making nowhere near what they're making. Clients supposedly whine and moan about associate bonuses, including at firms where partners are making $2, 3, 4 million, why don't they care about partners income and billing rates?!?

Don't you get it - the more you report on this stuff the more OTHER FIRMS WILL FOLLOW. Firms are scared to be first -- but not so scared to follow Latham or Cravath. Reporting all this negativity and race to the bottom stuff all the time is only hurting associates!

How come no one ever reports that it's partners PPP and the constant pressure to keep it growing -- even when unsustainable -- that is causing firms the financial stress, not the associates who are making nowhere near what they're making. Clients supposedly whine and moan about associate bonuses, including at firms where partners are making $2, 3, 4 million, why don't they care about partners income and billing rates?!?

93 - talent going to waste as a lawyer

90 - "Internally, the higher ups are saying everything is fine, but it is a lot like the final scene from animal house where all hell has broken loose on the streets and the one police officer is shouting 'Stay calm! All is well! Everything is fine!'"

Chip Diller (Kevin Bacon)

When Cravath announced this year's bonus scale, tons of people here were full of pshaws, saying there was no way any top tier firm would show similar "weakness" and match. And....look what happened. Methinks we'll see a similar pattern with salary freezes, and everyone here saying that Latham has made a grave mistake for which it will stand alone will be quite wrong.

99 = 66 upside down

Latham previously said it would not lay off anybody:

"[Bob Dell] addressed the challenges ahead for 2008. He specifically addressed the issue of layoffs. He said multiple times that he believed it would be a bad business decision to lay off associates. Latham made that mistake in 1990 and Dell said the layoffs hurt their profitability after the recession was over. Dell said "there will be no layoffs" and that it was not even on the table for discussion."

http://www.abovethelaw.com/2008/03/whats_up_at_latham_watkinsmora.php

Even firms that don't rely heavily on wall street or don't have debt will wind up following. What crap.

97 - no doubt firms who could've paid Skadden levels followed Cravath. But this move is pure insanity. Just read these comments. Not nearly as many Apologists as on the original Cravath thread. The Deathwatch posters have it right - any other firm in the V20 to follow this would have to be insane.

Your point about PPP is well taken. I second the motion that Elie or Lat post PPP numbers (over the last 3 or 4 years) whenever posting associate compensation numbers.

@67:

"There is no excuse for cutting base salary on top of that when PPP's are still north of $2 MILLION dollars. NO EXCUSE."

LOL.... name a V20 that will have PPP north of $2 million in 2008.

Yale's endowment fell 25% this year. Harvard's fell 30%. Suck on that, Harvard.

Yale's endowment fell 25% this year. Harvard's fell 30%. Suck on that, Harvard.

You wanna hurt me? Go right ahead if it makes you feel any better. I'm an easy target. Yeah, you're right, I talk too much. I also listen too much. I could be a cold-hearted cynic like you, but I don't like to hurt people's feelings. Well, you think what you want about me; I'm not changing. I like me. My wife likes me. My customers like me. 'Cause I'm the real article. What you see is what you get.

Latham hires too many unproductive Hapas

I haven't been home in years.

Actually, that was slightly inaccurate. Harvard's fell 22% to Oct. 31. Yale's fell 17.5% in the same time. Harvard's projecting 30% for the year.

dEaTHWatCH

I also heard LW is going to lay off attorneys soon. Any details?

The endowment in my pants just fell 30% when I read this post.

109 - Planes, Trains & Automobiles. nice.

As far as recruiting, freezes are worse than layoffs. Layoffs are understandable and have become commonplace. Being the first to pay below market is a stain that will last for years, even if other firms follow.

The endowment in my pants just fell 30% when I read this post.

109 - Planes, Trains & Automobiles. nice.

the problem is that partnerships are fragile, but i wouldn't count on dissolution quite yet.

109 - Not everything is an anecdote. You have to discriminate. You have to pick something interesting, or funny, or somewhat amusing. And when you tell a story, have a point.

Salary freeze worse than outright layoffs for recruiting purposes? Joke, right? Am I too optimistic to think that even the least math-inclined law school student can grasp concept and differentiate between a job for (slightly) less $ and no $ whatsoever?

Man, it's not just a $10k or $25k cut. You know they're not going to come back with double-raises in 2010.

*
For a rising second-year associate THIS IS A $120,000 PAYCUT over six years. Seriously painful- that's my whole student loan debt, taken from my base salary (forget what I lost in imaginary bonuses).

*

90 - Latham isn't going to fold. You're mistaking this for a different scene in Animal House. Latham is simply consecrating the bonds of obedience. "Thank you sir, may I have another!?"

It's not a pay cut. Nobody is going to make less next year than they did this year as a result, hence, not a cut. I'm just sayin'...

How will I ever make it on $265k a year, plus bonus, which will still push my compensation to over $300k!!!!! GIVE ME A BREAK! Stop your whining, you vultures! Do you realize people with families are being laid off? I realize you don't give a rat's ass about those less fortunate than you, but really, just once, being thankful for what you have. Yes, I know, you have loans from college and law school. If you stil can't live on $300k, you don't deserve pity, you deserve an ass whooping.

How will I ever make it on $265k a year, plus bonus, which will still push my compensation to over $300k!!!!! GIVE ME A BREAK! Stop your whining, you vultures! Do you realize people with families are being laid off? I realize you don't give a rat's ass about those less fortunate than you, but really, just once, being thankful for what you have. Yes, I know, you have loans from college and law school. If you stil can't live on $300k, you don't deserve pity, you deserve an ass whooping.

Why has Gibson been so silent through all of this? OMM had layoffs, and now this nonsense from Latham. What is going on at Gibson? The worst news about them on ATL has been their use of a stock photo on their website.

Why is Gibson so great (or are they just waiting to announce the bad news)?

How will I ever make it on $265k a year, plus bonus, which will still push my compensation to over $300k!!!!! GIVE ME A BREAK! Stop your whining, you vultures! Do you realize people with families are being laid off? I realize you don't give a rat's ass about those less fortunate than you, but really, just once, being thankful for what you have. Yes, I know, you have loans from college and law school. If you stil can't live on $300k, you don't deserve pity, you deserve an ass whooping.

So what's up with the OMM silence? We all know they're going to do it. They should just get it over with.

93: you don't need a weatherman to know which way the wind blows.

7 - thank you for saying what every non-big law associate has been thinking throughout this mess. everyone should just grow up and be glad they have jobs at the moment. who gives a rat's ass if you won't get your precious raise...you'll still be pulling in more than the vast majority of americans.

97 is a friggin' ignoramus. Hey 97, do you really think that firms will remain in the dark about each others' bonus/salary figures if they don't appear in a blog? You must be a prepubescent TTT law-school struggler or a stub-year panicking corporate associate grunt. Welcome to the real world. The big boys talk to each other a LOT, and know exactly what the score is. They have a bigger vested interest in this knowledge than peons like you. Now go back and bill your pathetic 1500 hours by Dec. 31 and hope you still have a job in the spring. Head back in the sand with you now!

No one thinks they're going to be one of the ones laid off when looking at firms, and paying below market will stick in the minds of 2Ls longer than a firm cutting 10 people in a weak practice group.

132: amazingly enough, firms don't make all of their decisions around the recruiting process. Go figure.

I'm class of 2005, and I love how we're the only class of associates that will be making less in 2009 on the new salary scale w/ pay freeze ($185K) than we would under the old salary scale ($190K).

This sucks hard for them (at least the people who have been billing 2200+). At least they get paid in prestige points.

Latham may be trying to lead the market here, but it's unlikely to work. Certain firms (e.g., S&C) seem pretty unlikely to follow Latham and cut base salaries.

134: Agreed. We '05s have been screwed the most. That's a $25k bump we're missing!

135: LOL. "[P]restige points." Classic!

Remember how, around the start of bonus season, we all believed that the top firms would distinguish themselves by not cutting bonuses? Then one after another, the top firms proved us wrong and did cut bonuses.

Well salaries are actually the place where the true top firms will distinguish themselves. There is no way in hell that CSM, STB, DPW, etc are going to freeze/cut salaries. But many of the lesser firms, who are hurting quite badly, will follow Latham. L&W will be the leader of the poor firms, or of the group of firms known as the "poors" from hereon forward. The true top firms, and there won't be many, will seize this opportunity to assert their superiority.

138: Thanks for jinxing it.

136,

Certain firms are probably sizing up which IP/lit./bankruptcy partners they can entice with higher PPPs.

135: even better, there's something called a merit-based bonus. (and prestige points mean sh*t)

Latham is pissing on my fucking rug

140,
I doubt this is related to partner-poaching. Often, a poached partner will get certain guaranteed payments for the first few years.

-136

That rug really tied the room together, too.

SO glad I picked Skadden over Latham

damn 3 third years are really taking it in the gut here.

The market is separating the men from the bitches

Latham -> bitches

Third years should be taking it in the gut/ass here because they are precisely the ones that aren't leaving when they should. At my firm, there are almost as many rising fourth-years as there are rising second- and third-years. Firms don't want to pay you that extra $25k, and there are MANY of you that aren't hacking it as mid-level associates.

I'M MAD AS HELL AND I'M NOT GONNA TAKE IT ANYMORE!

I'M MAD AS HELL AND I'M NOT GONNA TAKE IT ANYMORE!

I'M MAD AS HELL AND I'M NOT GONNA TAKE IT ANYMORE!

I'M MAD AS HELL AND I'M NOT GONNA TAKE IT ANYMORE!

I'M MAD AS HELL AND ALL I GOT IS FOUR MINUTES.

I'M MAD AS HELL AND ALL I GOT IS FOUR MINUTES.

I'M OUTTA TIME AND ALL I GOT IS FOUR MINUTES

I'M OUTTA TIME AND ALL I GOT IS FOUR MINUTES

I'M OUTTA TIME AND ALL I GOT IS FOUR MINUTES, FOUR MINUTES

I'M OUTTA TIME AND ALL I GOT IS FOUR MINUTES, FOUR MINUTES

COME ON
YEAH
BREAKDOWN COME ON
EVERY BODY DANCE!

I am laughing at all of the L&W '09 summers right now....hahahahahaha

147 nailed it.

In interview, Edwards said "We're emerging as the strongest US-based law firm outside the US. Asia, the Middle East and Europe have traditionally been dominated by the UK Magic Circle firms, and Latham is the pre-eminent US firm to really be challenging them in those markets. We're very serious about growing long term and continuing to grow as a strong global powerhouse. We're not going to let a little recession stop that."

LOL @ Latham being the pre-eminent US challenger in those markets. But good to know where the firm's focus will be going forward and apparently, it ain't NY.

Vault 2010:

1. Wachtell

2. Skadden

3. Sullivan

4. Cleary

5. Weil

Elie, start a poll on which 3 firm are dropping out of the v10

Serves them right for working at a non-V5 firm. If you're not at WCSSD, why be a lawyer?

- Cornell Pre-Law Stud

Another sort of screwy point is that the first years--the ones with the least experience--are the only ones not affected by this plan (they are still on the old payscale).

oh crap! it's snowing! night all!

142:

It really tied the room together.

125: Why do secretaries and legal support staff feel the need to post on this site? Like we really give a damn. I mean honestly...

What's crazy is that the classes of 07 and 08 will be paid the same. AND, when the class of 09 starts in the fall, they will get paid the same as the class of 07 for a few months. Sucks to be class of 07. The only bonus to that class is that firms doing this will probably lay off 08 grads before 07 now if they are paid the same salary.

All in all, it's better to have a pay freeze than a pay cut, and it's better to have a pay cut than lose your job.

Really, Dude, you surprise me. They're not gonna kill shit. They're not gonna do shit. What can they do? Fuckin' amateurs. And meanwhile, look at the bottom line. Who's sitting on a million fucking dollars? Am I wrong?

Latham is overextended and has very poor management at the top, it's kind of pathetic

From a Latham Executive Committee member's perspective, this is sort of a no-brainer. There are two things that can happen now: (1) peer firms will follow suit or (2) they'll be out on their own.

If (1) happens, then they will have succeeded in rolling back market pay, which is great for the partners. Obviously this isn't great for the associates, but with disinflation/deflation it isn't really all *that* bad.

If (2) happens, they'll just raise back to market pay either next summer or in the summer of 2010. Nobody is going to want to hire anybody next fall (2009), so they aren't going to care if their recruiting isn't so hot. Then they can raise the following summer and by fall 2010 nobody will even remember that it happened. Law students only know what gets posted here and what's on the NALP forms - you really think any of them will know, let alone care, that the firm had some freeze thing going on before they went to law school or before they'd even heard of the firm?

Either way, the firm ends up with ~$15,000 X ~1800 associates = $27,000,000 extra per year for as long as this lasts. That's a nice benefit, but that's not why they're doing it. That translates to $45k per partner per year, which would bring the PPP from say $2.2M to $2.2M - obviously the numbers will be lower this year, but the point is it only saves the partners ~2% of their salaries - that's almost nothing and certainly isn't why they're doing this. They're doing it b/c it will help increase attrition. Nobody is going anywhere in this economy, but firms of this size are built on attrition. With the salary freeze/cut, associates will leave for in-house jobs, their public interest dream jobs, and other firms (if they don't freeze/cut as well). Additionally, Latham can now come out in January w/ above-market bonuses, which will get them some good publicity to cancel this out and also help to retain the good associates that they want to keep.

In sum, they get to (1) save money, (2) cut some fat, (3) keep the good, (4) get on solid financial ground, (5) all while having little practical, negative impact on recruiting. As crappy as this may be for associates, I'd say it's an obvious choice from a firm management perspective. I'm sure that other firms are wishing they'd made this move (despite what the ATL peanut gallery says).

And yes, although this is all 100% speculation, I am a Latham-bound 3L - one who really doesn't mind the freeze/cut all that much. Obviously it's not ideal, but (1) it means there won't be any layoffs (and I've spoken personally w/ an Ex Comm member about that), (2) it won't affect my pay at all as they certainly will be at market, whatever that may be, when I hit my second full year in 2011, and (3) this can only make the firm more stable in the future.

If i make a cent less than $200K w/ bonus after my first full year at my firm (i graduate in '10), i will jump off the empire state building and hope to land on a bicycle with no seat.

All this salary freeze/reduction nonsense is utterly unacceptable.

Why is Dealbreaker better than this blog?

yes, this is all about attrition.

for those bitches whining, shut up and move your entitled asses out. oh, that's right. your sorry risk-adverse scared of the job market asses are going to stay put and just bend over. please lean as far forward as possible so you can fall on your faces.

163 I am glad you had your little chat with an Ex Comm member, but those who work here now know that many mid-levels have been "strongly encouraged" to pursue other options and pushed toward the door. There simply has not been enough voluntary attrition.

163 - nice work. Glad to see Latham is hiring some quality thinkers instead of run of the mill, idiot sheep that frequent this board

This makes sense since clients are asking firms not to raise billing rates, give them discounts and/or arrange alternative billing systems.

You're not going to get some fancy Gibson Dunn bonus/salary email to repost, since it's all done individually. But suffice it to say, GDC basically pulled a cravath: halfsies bonus (with steps up and down per class based on hours/merit) and the regularly scheduled salary increase. In other words, they did not pull a L&W today. And amen for that.

LOL at 163, your little analysis is very short sighted...your clueless and a pretender.

Boo freakin' who.

I find it hard to feel bad for the 2007 associate at Latham who's paycheck on January 15 will be $6,666.67 (gross). I feel bad for the Dreier associate and the TWP associate and the Thelen associate and the Heller associate who's paycheck in January will be $0.

Any Latham whiners should just be glad they aren't at Dreier or TPW or Thelen or Heller.

(And don't give me this crap about the cost of living in NY and student loans and credit cards, etc. I work in NYC, own a coop apartment, have paid off all my private loans, and have no credit card debt all on a six figure [but much less than BigLaw] salary. It can be done.)

Man, if I were a Latham associate I would just shut it down for the remainder of 2008. Just leave. If Management fucks the employees before Christmas, the employees should do something.

My guess is Latham associates didn't expect this bullshit and were probably expecting the bump come Jan 1.

PS. Someone needs to kick 164 in the head. You haven't even started to earn a salary and you are already crying about how much you *have* to make? Grow up.

164 FTW - hilarious

Give me a break - are the billable rates going up according to class year -I'd bet on it - just another way for the partner pigs to make sure that the brunt of the slowdown is borne by the associates

Hey 163 - Let me say what 167 and 168 are trying to tell you: you're a tool. I bet you think people like you - they don't. Everyone makes fun of you behind your back.

Does no one understand that lockstep benefits firms and partners? All those light billing bankruptcy and litigation partners and associates for the last four years are going to be the people throwing off work in the next couple. You have lockstep pay to keep your practice diverse. The bad thing about a downturn is that good times have a tendency to raise all boats (except maybe bankruptcy) and there are more exist opportunities for associates (leading to higher bonuses and overall comp).

Firms cut deadweight pretty well while still paying lockstep comp.

anyone up for a good old walk-out if this keeps up. Let's see average rate 500 per hour times 300 associates times 8 hours per day - 1,200,000 in lost billables per day - I'm feeling a bit ill - might take two or three days to get better. The associates haircuts will hardly be worth it. and no - the work will not be there when we get back.

164, I suggest that you jump now and I guaranty the result with no need for a bike.

So I assume the freeze applies to Latham clerks as well? In other words, instead of coming is as a second-year making $170, Latham's incoming clerks will enter as a second-year making $160?

If so, that could really suck for Latham. Clerks may just decide to go somewhere else next fall. I know the lateral market sucks, but clerks (especially COA clerks) have a much easier time in the market.

A serious question: Obviously, things are terrible right now for everyone, from Biglaw associates to assembly line workers. So what does one do if one wants to switch careers? In my current position, I feel like a square peg trying to fit in a circular hole. it's not a bad position, but not for me long-term. I've wanted to go to law school. Now, with all that is going on in the economy, should I avoid it altogether, delay a bit, or just go for it? Compounding things further is the changing Biglaw landscape. If indeed, this is a hint of things to come, the future for all associates isn't rosy at all (even if it isn't all that rosy to begin with). So, my question to you all is, would you tell someone who is thinking about applying to law school to go for it or not? Thanks for your time.

I love the Count. Keep a'countin' you purple-faced, drug-addled freakazoid.

I mean it: I LOVE YOU, MAN.

Maybe you L&W people should spend a little less time on your cocaine parties and a little more time on your clients.

It must be pretty uncomfortable to be an associate at Latham. When your boss gives you a surprise raping, those things create tensions that don't go away immediately.

"When your boss gives you a surprise raping"

Are you the spread the butt cheeks guy?

To paraphrase 7, I think everyone needs to realize, yet again, for the millionth time, that law firms are businesses. And associates, like any professional services employee, are entitled to nothing more than what the market will bear. And to all blaming the partners for cutting costs to protect their PPP: a firm's PPP is what entices lateral partners to join your firm in the first place. This is a big deal. Firms have been heavily recruiting laterals for the past seven years. Firms need to keep up their PPP to both keep their rainmaking partners at their firm and recruit laterals. If a firm loses its partners, it will lose its client. If no clients, there's nothing for associates to work on. This is what the biglaw industry is like. It's very rigid. If you want a flexible business structure, look elsewhere.

If, as associates, you all want some leverage, form a union. I personally believe that legal professional services unions are imminently arriving after Obama signs EFCA, but we shall see.

Again, to paraphrase 7: that so many of you seem to be shocked that this is happening (in the face of the worst recession in 70 or 80 years) reveals nothing more than the fact that you could benefit from a strong foundation in micro and labor economics.

but the cocaine parties were so nice...

The point is, ladies and gentleman, that greed -- for lack of a better word -- is good.

Greed is right.

Greed works.

Greed clarifies, cuts through, and captures the essence of the evolutionary spirit.

Greed, in all of its forms -- greed for life, for money, for love, knowledge -- has marked the upward surge of mankind.

And greed -- you mark my words -- will not only save Teldar Paper, but that other malfunctioning corporation called the USA.

163 - and where exactly do you expect all those corporate/finance associates to go? not a whole lot of lateral hiring going on (at least for corporate - i'm still getting calls from recruiters) and it's not like they can all go work for a hedge fund or goldman sachs like many corporate associates were doing not long ago.

182 - bad economy = more law school applicants = tough time getting into law school. by the time you graduate, the economy will have improved, but good luck getting into a top 20 school this year. having applied the fall of 9/11, i still remember how tough that year was for law school admissions. and if you don't get into a top 20 school, it will be hard to get a biglaw job out of school so you should certainly factor in where you think you can really get in.

If this prevents layoff, I'll take it. And there are some good people without enough hours because their department doesn't have enough work.

Anyone want to compare penis sizes?

7" about 1.75" thick

I'm at Latham and while this kind of sucks, it is not the end of the world and is much better than lay-offs. I guess if I hated my co-workers, then I would love to see people who didn't make hours get canned, but I generally like everyone I work with and would hate to see anyone leave

Listen you dickwads - it's simple really:

Pay freeze > layoff

So Latham is basically telling their associates not to try, because even if you suck they'll take from the performing associates and give to you.

Pay freeze > layoffs IF you're one of the slackers who would be laid off.

153 -- A Weil Troll, obviously.

Is anyone else surprised by the lack of maturity in these discussions? And we're supposed to be the intelligent ones.

198 = small penis. intimidated by 192

198 is obviously a retarded homo moron

See. I feel bad for those impacted by the freeze, and then I read the comments, realize how completely self-centered these kids are, and go back to not caring.

You've got a job, Lathamites. Now stfu and get back to billing.

This is much better than layoffs IF everyone goes back to their original scale once things pick up a bit. While finance isn't going to be back up where it was for a long time, the economy will continue to function and there will be some pent-up demand for some kinds of finance and corporate work once the markets stabilize

DONNA MARTIN GRADUATES! DONNA MARTIN GRADUATES!

198 is going through that period right before they come out of the closet. he'll be sucking 192 off in a few months.

Wow great chart, he must be good at excel. Really helpful!

The REAL "Vault"

1. WACHTELL

2. WILLIAMS & CONNOLLY (180K, 195K, ETC.)

2. MUNGER OLSON ($$$)

2. SUSMAN GODFREY ($$$$$$$)

3. QUINN

4. Every other firm that wasn't built on the farce that was Wall Street...

126 - Gibson is an incredibly well managed firm, do not overhire, have diverse set of practices that is not too reliant on corporate or 1 client (e.g., Latham with Lehman). They are very careful with their hiring and only bring in top-notch people - they are big but not "massive" like Latham

203 nailed it.

Whoever goes BigLaw in NYC has to be a complete idiot, unless you're at Wachtell, maybe...

http://www.nydailynews.com/ny_local/2008/12/16/2008-12-16_gov_david_paterson_unveils_dire_new_york.html

Firms only care about negative impacts on recruitment when they're recruiting. But when they know they're not and are bloated as is, attrition is incredibly low, and there's no end in sight to the economic woes, why would they worry about the effects of this paycut?

You people are idiots. The debate is this:

Would you take 100% job security for a 10% pay cut? Or 90% job security for no pay cut?

If your salary stays the same for two years in a row, folks, that just means your salary stays the same. You are not getting a pay cut. If you think that's a pay cut, you must have flunked simple arithmetic - how you managed to graduate from college, much less law school, is beyond me.

Associates, like other employees, are not ENTITLED to raises. The associate market has allowed you to get raises in most years.

That's not how it has worked in other industries. Some folks have been lucky to get COLA most years, let alone during a recession/depression.

People who say they are at top-paying firms because they need to pay off law school debt, and not because they want to make partner, are mercenaries, and should be expected to be treated as mercenaries - paid what the market will bear. You show no loyalty, and you aren't entitled to any. Billing hours so you can make as much money as you can, folks, is not loyalty, no matter how you apply the lipstick to that pig.

If you want to get those "beastly" PPP that everyone complains about, stick around and wait your turn, and show some loyalty.

193, as a fellow Lathamite, I hate you and hope you leave. You are a filthy jizz mouth.

182, no worries... just study hard for that LSAT and, if you don't do so hot, maybe wait until the competition isn't so fierce (it will be right now... GMAT and LSAT prep companies are doing their best business in years). Things'll improve by the time you matriculate... and certainly by the time you graduate.

What happened to the butt cheeks guy?

131- huh???? Your bs response is completely wrong. I'm a midlevel litigation, not corporate, associate in DC, and I billed a lot more than your wild prediction of 1500 hours (who bills that low anyway?). My firm, like others, is waiting for other firms to decide what "market" is for not just bonuses - but compensation. So yeah, what Latham is doing matters and will affect other firms, even if they're not exposed to wall street, but simply because they can get away with it in this TTT market. But thanks for playing. ~97.

I swear to god I'm gonna pistol whip the next guy who says "shenanigans"

192,
Can you hammer a six-inch spike through a board with your penis?

213 - bullshit

As stupid as law students are, at least they're not as stupid as b-school students. I personally know of three friends at top b-schools who are traveling to exotic locales during their winter break, in the middle of the worst recession in 70 years, when b-school grads are going to be fighting for job scraps.

211, you're an idiot.
The choice is between a firm firing the bottom 10% (more or less) worst performers, or a salary freeze/"pay cut" for everyone.

If you're in the top 90% or so (let's be safe and say top 70%), obviously layoffs > salary freeze since the layoff will almost never hit you.

If you're in the bottom 10-30%, salary freeze > layoffs since the layoffs will very likely hit you.

The possibility of layoff is not equal for everyone. So people who prefer the salary freeze to layoffs are at the very least below median, and most likely scraping the bottom of the barrel and hanging onto employment by a thread. Way to make your parents proud.

218 -- a girl's got to have her standards.

206:

Are you an idiot? Munger's profits are pretty low for a firm of their caliber, and they waited a LONG time to go to 160 from 145.

Sussman has the benefits of insane loot and good work; Quinn, even though it is shitty and nickel and dimes its associates left and right and is lead by a maniacal guy with Cravath envy and a Napoleon complex, puts up the PPP big time.

And where the hell is Irell on your list?

Munger's the weakest of the big three midsize LA firms; hiring a bunch of Supreme Court clerks doesn't mean shit if you don't bring in the dough.

211, that's not true. Firms that have cut bonuses will conduct layoffs, stealth or not, next year. Let's be real here, layoffs won't stop because of a 10% associate pay cut because partners are greedy and won't stand for a reduction, 10% or less, in their own salaries, and clients don't understand that incoming attorneys have paid a MUCH higher price to go to law school than they have and that associates are writing the winning briefs that pay for the partner's house(s) in the Hamptons. If they're going to fire us anyway, without even enough time to prove ourselves, we might as well make enough money to pay off a quarter or so of our six figure debt before we're booted.

223 is right. Munger does not pay well. It will also never do layoffs.

Hmmm...frozen pay. Slashed bonuses. And increased taxes on the wealthy.

Yes indeed, NY associates just ain't gonna' be making what they used to.

223-

You're apparently the idiot, for 4 reasons:

1. Amlaw doesn't publish Munger's PPP, so unless you're a partner there or work for Citibank in their private lending dept that services law firms, please be quiet.

2. Munger's RPL, which amlaw DOES publish, has Munger in the top 10, right behind Paul Weiss. Pretty low, huh?

3. Amlaw also publishes how many lawyers it takes to generate $10mm in profit. Munger is in the top 10, behind Simpson and ahead of DPW. REAL low!

4. Why do you care about profits so much? You're not a partner. As an associate, you should care about getting good training and experience, not doing doc review for 3 years at s&c or dpw. Munger gives you this experience -- THEN you can lateral anywhere you want and make the really big money.

5. as for working w/ scotus clerks, i'll take that any day over working with wanna-be idiots who think they're bad ass b/c they got an A- in torts and landed a gig at cravath, along with 159 others.

Will L&W accelerate if its business improves and jump associates to the level they would be at but for the freeze?

Now just imagine me nude, stretched out
Be all over the news if this gets out

I borrowed hundreds of thousands to go to a highly ranked college and law school to better myself and yeah I feel "entitled" bitching about not going to b school or med school or just doing something interesting that doesn't pay as well but without the debt, because now I'm saddled with that debt plus interest for the rest of my life. I guess I'm just an idiot that I believed the american dream that going to a highly ranked college and law school would be a step up from the working class world I grew up in. Instead I will make less this year and next and Sallie Mae will continue collecting.

In late 2006 (I think), before NY to 160 happened, there was a general disparity in pay scales between NYC and other cities. Then when NYC went to $160K others followed .... I can't remember the order but part of California, DC, then the rest of California, Chicago came around and then Boston, parts of Philly matched in a move of geographic solidarity, then I think Texas joined the club and we were all fantasizing about what $160K could buy in Charlotte.

Maybe this is not a lesson that "all firms should lower salaries" but that maybe lockstep compensation by city is a poor allocation of resources with few benefits. Would it be possible for a firm to roll back salaries in just some markets without creating huge internal strife?

Thank GOD so many BIGLAW associates donated to and voted for Obama!

Now is the PERFECT TIME for me to pay higher taxes!

221: You're wrong. True, at some poinit, a sinking tide will run us all aground. But there is no reason to think it will bottom out everywhere. And as long as a firm isn't laying off ALL of its associates, its layoff decisions will to some extent be merit based.

You, apparently, haven't been pulling your weight. Watch out for the reef.

--Joe H.

212 -- good post. I'm sick of these whining bitches...

227-

This is 223.

Check this out:

http://www.law.com/special/professionals/amlaw/amlaw200/amlaw200_ppp.html

Look at #49 on the list... could it be... wait for it... MUNGER?!? I THINK SO! Note that this is for 1999, so maybe Munger got a bad case of profits lockjaw in the last decade.

Let's find out:

2002: http://www.allenmatkins.com/news/articles/laloot.pdf (page 3, PPP of $900,000; shy of both Irell and Quinn)

2005: http://www.law.com/jsp/article.jsp?id=1122627912134 (reporting on Munger posting PPP in excess of $1 million for the first time)

Google is your friend. I know that it is shocking, but come on, at least TRY to defend Munger. I know that you're busy whacking off at the fact you get to say you're a "Munger attorney" even though you're a staff attorney (I think they call them "Case Attorney" there), but give me a break... you're a fucking paralegal.

NOW GO MAKE MY BINDERS

230 -- NAILED it.

I'm laughing at all you associates busting your balls and getting stressed out having to respond to Partners and having to call clients or even lawyers from other firms.

I'm laughing that you lost your big associate raises and big associate bonuses

Signed,
Paul Weiss Staff Attorney

I'm laughing at all you associates busting your balls and getting stressed out having to respond to Partners and having to call clients or even lawyers from other firms.

I'm laughing that you lost your big associate raises and big associate bonuses

Signed,
Paul Weiss Staff Attorney

238 - That's interesting b/c at most firms staff attorneys are the first to be shown the door.

How many Assholes do I have on this ship?

KEEP FIRING, ASSHOLES!

The long and short of what is upsetting people is that they feel like they are being bent over, spanked, and can't do a thing about it because of the economy. They are upset because the hit they are taking reduces the firm's bottom-line which means more profit for the partners (who, admittedly, are also being hit hard because of the reduced number of hours billed). But associates are smart enough to realize that an equity share of something is just that... an equity share. You get profits when times are good, and take a hit when times are bad. Taking from an associate to pay the partner more means the partner is greedy. That's their right, and it may even be smart from a business perspective. What is upsetting is that there isn't anything the associates over there can do about it because leaving the firm is not an option in this economy. For the foreseeable future, partners can ask them to bill insane hours, give up their life, be paid less than what they anticipated so the partner will be paid more, and there is nothing the associate can do. I'd be upset too if I was in their position. I just pray my firm doesn't follow suit.

U. of Penn 1L here. What's the best market to to do corporate or international law? San Fran? DC? Can't imagine its still New York. Please, no JoePa / Nittny Lions jokes.

126:

I work at GDC as a mid-level associate and can echo 206's comments. We are a very well and tightly managed firm. I would say we are far better known for our litigation practice than we are for our corporate (our real estate practice is somewhat smaller and has been crushed this year) - this fact has helped soften the blow of things a bit.

-We expand into other regions VERY slowly (just recently opened Dubai and Singapore).

-I know a top-notch recruiter who says that when firms consider lateral hires from GDC, the candidates are given a slight edge in the process due to the fairly rigorous screening process they already went through at GDC (we are admittedly a firm that places an almost snobby consideration of where one attended school and care a lot about GPA).

-The firm tends to favor hires that are considered "gunners." There doesn't seem to be as much fat at GDC as there is at other firms - I personally know some slackers who were fired in 07 when things weren't as bad.

-The partners are very quality people and there truly is a collegial and comfortable atmosphere at the firm.

Like any other firm, it's not all roses (we have sometimes an overly "vanilla" vibe, we don't have the prestige of a Cravath or S&C in NY, and we don't have a killer Skadden-ish corporate or real estate practice), but all in all, I personally am very happy at GDC.

I can also confirm the Cravath-based bonus structure and no pay freeze at GDC. Latham and GDC are direct competitors in LA and it will be interesting to see how things shake out in that market. The impact on NY between the two will be negligible.

LW associates now make less than line workers at GM. And the GM workers didn't have to spend 3 years and $100g on law school.

237 - you sound like the kind of person who like to be little spoon.

Um, 243, here's the thing. It's not that NYC lost its hold on the deals market, it's that the deals market collapsed. World wide. See, for the last decade, everyone's been cutting deals on credit, and there's no credit. So there are no deals, hence, no deals market. None.

It's like asking, "where's the best place to sell the Apple IIe? I'm guessing not SV, but what about Texas? Are they still down with green-screened word processors in Texas?"

GM workers also don't have a shot at a 500K plus income, which virtually all of the good LW associates will make if they work hard.

235 -- way to dig up 3-year-old information. I guess anything that's happened in the world since 2005 is irrelevant. I've heard a few things have changed though. But keep thinking it's 2005...

You also asked me why i didn't include Irell on my list -- THEY WERE 59TH ON YOUR PPP LIST! So which is it -- does PPP matter or not???

Go ahead and choose a firm based on PPP -- a number that's meaningless for associates and easily manipulated. keep telling yourself that "at least you work for a high ppp firm" when you're up till 2am doing doc review. High ppp seems to be working out well for latham.

248: I think you mean "200K."

248: I think you mean "200K."

What ever happened to the Doug Henning posts?

I don't know what all this BS is about how these salary freeze/ cuts are in lieu of layoffs.

Layoffs are NOT off the table at LW, what Robert Dell said might as well have been 100 years ago

Who the fuck cares what Munger's PPP is?

Can we please keep this thread on topic, that is to say, on the topic of how stupid law students and young associates are who don't understand that our economy is fucked and they should take whatever scraps they can get?

I think these firms are making a big mistake. The economy is going to rebound a lot faster than people think.

This is awesome! Thank you LW, you just saved me 100k next year!

Layoffs definitely not off the table. Stealth layoffs been going on for a while in certain offices.

What does it matter? We are well paid slaves. Nothing more. If you are one of the rare souls who really enjoys practicing biglaw, keep doing it and you will be all right. If you are like the other 95% of us, we are wasting our lives for a big paycheck every two weeks. We know it's not worth it, but we still show up every day.

BTW - Where is the BUTT CHEEKS guy?? I miss him.

255 - well if it does Latham can return their salaries to normal levels

253 is correct.

There will be reviews in January, and more than a normal amount of associates will leave the firm.

There will be some internal grumbling, some leaks to ATL about how "LW is conducting stealth layoffs."

Bob Dell will just say "The firm is standing by its orginial stance of no layoffs. Around this time of the year, there are always associates who leave the firm to pursue other opportunities."

And that will be that. All the "LW no layoff" pledge has done is force the firm into having to do stealth layoffs.

The pay freezes will not do anything to stop the layoffs

249:

My point was simply to show how blatantly false your "Munger doesn't disclose profits" claim was.

But since you want to play that game, and because I can, in fact, spend the time not to just pull crap from the first page of Google search results, here you go:

http://www.law.com/jsp/article.jsp?id=1202469637231

2007 results:

Quinn: $3.01 million PPP
Latham: $2.2 million PPP
Irell: $1.9 million PPP
Gibson: $1.9 million PPP
OMM: $1.64 million PPP
Munger: $1.3 million PPP
Manatt: $1.25 million PPP
Sheppard Mullin: $1.2 million PPP

Munger sure is hot shit, barely beating Manatt and Sheppard Mullin, for Christ's sake. Even O'Melveny blows them away.

163 you are one big contradiction. In other words, you know no logic and a complete Fing moron.

I agree with 255. I also think that people will be living on Mars by 2010.

206, Wachtell wasn't built on "the farce that was Wall Street"?

Munger is a good place to work. You do get a lot of responsibility early on and there is not much doc review to be done at all. The place is run as if it is still a 20 person shop, so it truly is very collegial, and there are no screamers. Having said all that, Munger perennially pays under market -- for instance, a first year last year made around $30k less than his peers at much less "selective" places. Then again, those other places have now laid people off, and Munger will never do that.

173, welcome to unemployment

How's the Ransom account going, Marcus ?

It's, uh, all right.

Really ? That's interesting. It's not, uh, not great.

Oh, well, you know.

Anyone who posts a comment about profits per partner is presupposing that the concept of fairness is a guiding principle in what we do. It is not.

We wake up every day, go to our offices, and suck the most money we can out of this world, and then retire to our families, whose existence is the justification for what we do during the day.

The law is just a means to an end, like any other business.

268:

TRY GETTING A RESERVATION AT DORSIA NOW YOU STUPID FUCKING BASTARD!

Yes!! The BUTTCHEEKS guy is back!!!

But the real question is: Is he referring to CWT '05 girlie butcheeks or some dude's buttcheeks??

This is an unusual advertisement to find on ATL:

http://abovethelaw.com/2008/12/a_taste_of_club_life.php

★★★I LOVE SKADDEN★★★

***SKADDEN WILL TAKE ALL THAT IT CAN FROM YOU AND THEN SPIT YOU OUT. AND YOU WILL SAY THANK YOU.***

I wonder if partners care about the downward pressure this move will have on lit associates' billables?

You can't take multiple tens of thousands of dollars away from someone who was working 2400 hours a year, and expect them to continue working at that pace.

The world doesn't work that way.

Associates will take it out in kind.

They won't work the weekends, they will take longer on drafts, they won't answer your evening emails as vigorously.

Let's face it -- a lot of what drives associates is the desire to "please daddy."

It's not like every night partners tell associates "Stay till 11pm." It's self-motivated.

They pleased teacher as kids, they pleased professors in law school, they pleased their judges while clerking -- and now they want to please partners.

But the partners have said "Sorry suckas" and cut pay.

So now they're demoralized and pissed.

You can't get blood from a stone.

And to all the partners thinking "Well, where are they gonna go? they HAVE to work as hard and as diligently! Ain't no jobs!" --think again.

there was just a study in the WSJ that those who survive layoffs are far less productive than before the layoffs.

When "teacher" punishes you even when you do "gold star work," even if economy is bad, you will pay yourself with more free time.

People may intellectually recognize that it's in their best interests to keep working hard, but emotionally, they will be like "Fuck these assholes."

I expect a lot shoddier work coming out of layoff / pay cut firms.

244, you are young and foolish. Keep listening to that top notch recruiter!

266 -- that was my point. 261, like a moron, is obsessed with "ppp," which is defined differently by every firm. walmart is more profitable than Tiffany -- but 261 thinks Walmart is more prestigious.

Most elite law students are sophisticated enough to look beyond "ppp" -- that's why they go to firms like williamsconnolly, munger, etc over freakin cravattth and the rest of the bank-whore firms with high "ppppppp."

I wonder if partners care about the downward pressure this move will have on lit associates' billables?

You can't take multiple tens of thousands of dollars away from someone who was working 2400 hours a year, and expect them to continue working at that pace.

The world doesn't work that way.

Associates will take it out in kind.

They won't work the weekends, they will take longer on drafts, they won't answer your evening emails as vigorously.

Let's face it -- a lot of what drives associates is the desire to "please daddy."

It's not like every night partners tell associates "Stay till 11pm." It's self-motivated.

They pleased teacher as kids, they pleased professors in law school, they pleased their judges while clerking -- and now they want to please partners.

But the partners have said "Sorry suckas" and cut pay.

So now they're demoralized and pissed.

You can't get blood from a stone.

And to all the partners thinking "Well, where are they gonna go? they HAVE to work as hard and as diligently! Ain't no jobs!" --think again.

there was just a study in the WSJ that those who survive layoffs are far less productive than before the layoffs.

When "teacher" punishes you even when you do "gold star work," even if economy is bad, you will pay yourself with more free time.

People may intellectually recognize that it's in their best interests to keep working hard, but emotionally, they will be like "Fuck these assholes."

I expect a lot shoddier work coming out of layoff / pay cut firms.

This firm got too big too fast. It will fall harder than the others.

It was a heck of a run kid. Had to end sometime.

To the person who wondered if he/she should go to law school: I say only go if you get into a top 20 school. Otherwise, the risk of not landing a high paying job is too great relative to the high cost of the degree.

Re PPP. High PPP attract lateral partners, who bring in more business, and thus greater job security for associates. Heller's demise is a good example. They were once a highly regarded SF firm (particularly in litigation), but their PPP always lagged behind their peer firms. This lead to partners deflecting to other firms where they would get paid more, a loss of business for Heller, and ultimately the firm's demise.

No one has it figured out. Skadden is the General Motors of law firms--- still following the old paradigm of high associate labor costs. They haven't figured out that the future belongs to law firms that can keep their costs lower to weather this once in 100 year deflationary storm. Where would you like to be working ----General Skadden Motors, or Latham & Toyota? In December 2009 you will be wondering why Skadden blew apart because its partners left for firms that were smart enough to act quickly to cut overhead, and Skadden management was too proud and slow to react to the crisis. Are you sure you know what is going on inside Skadden right now? What were their costs versus revenue for November 2008?

Note that this isn't exactly a return to 2006. Assuming the chart over at Autoadmit (http://www.lawfirmdiscussion.com/compensation/newyork06salary.php) is correct:
*1st, 2nd, 6th and 7th year associates are still making more in 2009 than they would have made under the pre-'07 salary scale
*3rd and 5th years are making the same as they would have if Simpson hadn't raised the bar.
*4th years are getting paid $5k LESS than they would have made under the old scale.

275: Care to explain? The recruiter I referred to made over $1M last year and is going to clear that for 08 as well. He is a friend of mine and that is not BS - he took a huge risk leaving law for recruiting (earning squat at the start) and it has paid off

274, and they will lose their jobs and other willing associates will do the work. the amount of work doesn't chang, it is just an issue of which tool is doing it.

279 -- that's incorrect. PPP means nothing b/c you can pay your best rainmaking partners a higher ratio than "partners in name only."

for example, williams+connolly is known to promote a lot of partners purely for their lawyerly skills, but they get paid much less than the rainmaking partners. but the title "partner" drags down ppp.

and i don't see many top partners running away from williamsconnolly for freakin skadden, that's for sure.

Am I the only one secretly happy about the shitty economy and its effect on firms?

More layoffs and cut pay means there's less work to do.

Less work to do means that I have less work to do.

Less work for me means a much more balanced and happier life.

I would gladly take a pay cut in exchange for less work.

Sure, there's the risk of layoffs.

But I hated my job anyway when it was go-go-go.

I don't really care if I get laid off. And I doubt my firm will "go there."

260 - you are generally correct, but it's a relatively smart play by Latham's management. "No-Layoffs" only means that you won't terminate a large group of associates based on something like practice group. And if they encourage people with in-house options to go in-house, all the better for everyone. Canning some shitty workers through performance reviews isn't "stealth-offs", it is a normal thing for employers to do, especially during down-cycles. Latham called "no lay-offs" this time because they did them openly after the tech boom and it hurt them in two ways. First, it probably hurt their reputation for some period of time. More importantly, however, they felt that they also weren't in a position to take full advantage of all the money they could have made during the better periods since dot.com. have felt that it actually hurt their reputation a lit

Anyone who doesn't think that a hell of a lot of work is eventually going to come back, and will probably BEGIN to come back in the next year/18 months, 2 years max, is nuts and doesn't know anything about economic history. Latham just seems to believe that globally growth will start coming back in some places in the next year or two and don't want to get rid of too many people while still saving some money. The firm seems it is still committed to long term global growth and doesn't want to hurt its numbers or its reputation (though a salary-freeze is sure to hurt both to some extent) it will stick by its official no layoffs position. They are just betting that a temporary (as long as it can be justified) salary freeze is fits their long term goals better than layoffs.

274 - A good point. When firms pinch pennies from associates they only encourages slacking. But I love slacking!!! Come join the dark side.

The world is a much better place after a two hour lunch.

282, you are kidding yourself if GDC associates seeking to lateral are more favored over all other firms because of their rigorous hiring standards. Most law students in the last ten years who received GDC offers also received them from many other top tiered firms. Your good buddy is blowing smoke up your arse.

And you are saying GDC has announced that it is following the Cravath bonus structure. That doesn't make historic sense for GDC outside of NY. Are you suggesting they are matching Cravath in LA? And when did they confirm they were not following LW on salaries? GDC hasn't announced bonuses or next year salaries yet.

269

Dorsia is not that great. Your life is empty. But enjoy that bottle.

276:

Yeah, pay me in prestige. That makes sense.

Also, people turn down Cravath because it makes you undergo a psychotic break, not because it isn't "prestigious."

Also, Munger is barely (if ever) in the Vault 50. So much for "prestige" outside of the handful of people on the west coast who've heard of it.

286- You are generally correct, but LW did not do layoffs after the tech boom (at least publicized ones). Their huge bloodletting came during the early 90s recession.

Honestly, the happiest people at LW right now are probably the new associates. They get paid 160k- just like the soon to be 2nd years, and pretty much won't be doing much work for the next 1/2-1 year.

Plus, Dell's "no layoff" pledge means that the firm can't pull a Proskauer and fire them. Even stealth layoffs require some pretext, which is provided by reviews. Since they can't be given formal reviews for a while, they are safe

Luckily we live in a boom and bust world. With this bad of a bust, we can have a big long boom before the next bust! L&W to $260k in 2011!

Whoever thinks the fear of getting fired will motivate associates to bill 2200, 2400 hrs and be available at a partner's beck and call is an idiot.

This isn't the gulag.

The associates work that hard because they want to succeed, and because they want praise and respect from partners, and maybe because they secretly think there's a shot of making partner some day.

You need the captives to identify with their captors.

It's Stockholm syndrome that you need.

But in an atmosphere of "partners vs associates," where partners stiff associates to keep PPP up, or conduct layoffs, etc. the attitude will change.

The "bare minimum" will suffice.

Luckily we live in a boom and bust world. With this bad of a bust, we can have a big long boom before the next bust! L&W to $260k in 2011!

I am getting tired of LW apologists continuing to cite the alleged "no layoff" pledge to defend this nonsense.

I think we all agree now that at the very least, reviews are going to be harsher, and mid-levels are going to be strongly urged to go elsewhere.

And do people really think if shit really hit the fan (LW's PPP numbers take a HUGE dive) that management won't pretty much make Bob Dell eat crow and resort to massive layoffs?

Luckily we live in a boom and bust world. With this bad of a bust, we can have a big long boom before the next bust! L&W to $260k in 2011!

300 (or close to it)!

290 -- that's hilarious that you equate "vault" with prestige. NAME ONE LAW STUDENT WHO WOULD CHOOSE SKADDEN OVER MUNGER, IF GIVEN THE CHOICE? where is Susman in Vault???

So explain it to me -- why do people who could go to any firm they want choose Munger over your precious NYC banker-whore firms? they're all stupid and somehow didn't get the memo you got about "ppp"?

and since when does ppp correlate w/ pay at the associate level? last time i checked, williams/connolly pays more than most ny firms and every firm in DC other than skadden.

In this economy, can two hour lunches now become three hour lunches???

Me thinks, yes they can!

When OMM matches LW's paycut, Gibson's decision not to do so will separate it from its LA competitors.

274 nailed it!

Please repost that on every single thread from now on.

People are going to argue that anyone who slacks will be fired -- that is BS. There are not that many associates who are dumb enough to keep working at the same level while their pay gets taken away.

Stop worrying about law school debt. As we fall deeper into this depressions the fed is going to hyper-inflate the money supply, and your debt will be worth pennies on today's dollar.

300.

Oh yeah.

Who remembers the glory days of 2007 when Above The Law was filled with posts from Students for A Better Legal Profession?

Everyone was blathering on and on about how they'd happily take a pay cut for less hours.

Well guess what!

Nirvana is here!

There's no work out there, and lit work has not been overwhelming.

So less work for you.

Be happy.

Big Law 2007: "Can we give you associates some more money? Can we? Huh? Can we all just get along? Is that enough? Would you like fewer hours and limo rides home? What about paid family leave too? Can we kiss your @$$? Please?"

Big Law 2009: "You got a home, car, family but we own the paper on your whole &*$%!^@ life. We'll put your #*^$ wife on the street to be &#^@!* in the @%% by ^$***#@ and &*#$%@ #*^@#@. Your kids are ours 'cause we bought 'em. You got 'em on loan; they're leased, you're renting 'em. You get paid what we say. You do what we say. We run you. There is no discussion. We're gonna work you until you are burned-out, you are busted, or you are dead ... you get it? You got responsibilities - tighten up 'n do it. Clean this mess up. Back to work bitches." (THIEF)

288: This is simply what he told me. I am not saying that our hires don't get offers from prestigious firms. I am not saying we are not turned down by people who want to go to "more prestigious" firms. But I AM saying that we don't just hire someone from HLS with a pulse like some places do - I personally met with several HLS students who were negged after a callback. You are over-stating my point - I simply meant that he said it was a slight bonus, not that it would make or break a candidacy. Again, it's just one recruiter's word.

And if you knew anything about GDC at all, you would know that we don't "announce" bonuses or salary. I have been given a sheet of paper with my salary for next year (not frozen) and my bonus (Cravath model). Sure, it could be rescinded, as could Skadden bonuses theoretically. Or any bonus or salary at any firm.

As for non-NY offices, the scale recently has been matched across the board (last year non-NY offices received NY bonus - the special bonus, which was par for the course in the big LA firms besides Skadden). This year the other offices are matching NY.

I get the feeling from your post that you are a current law student.

282

The cost savings from this isn't much when taken in light of the minimal impact it makes on PPP.

This is a shrewd move for 2 other reasons:

1) It is an attempt at forced attrition. Despite this, LW has had a good reputation, and a midlevel with LW on their resume has options, even in this economy. The pay freeze might finally provide the impetus for some of these associates to go in house, have kids and live off a spouse, leave the law and go teach, whatever. Point being, they leave the firm.

2) Allows LW to avoid publicized layoffs- for now.

Anyways, I expect the top performers that LW actually wnats to stick around to be compensated with merit based bonuses. It's just that probably 5-10 percent of associates will end up with total compensation that is deemed "market", but those are the ones that LW would want to keep anyways

Look -- I can definitely sense associate anger at my firm.

I think there was this artificial belief that if you "worked hard," the firm would "take care of you" and reward your loyalty.

This recent spout of bonus and pay cuts of course, show that to be false.

Everyone KNOWS that top firms run on the fuel of driven associates.

Even a dog knows when it's been kicked or when it's been tripped over.

when PPP comes out, associates will take notice.

Does this mean I can start asking hot law students I interview to show me how good they are at oral persuasion? To be honest I really don't care to hear about some girl's junior year abroad or what her toughest class was as a first year.

Now just imagine me nude, stretched out
Be all over the news if this gets out

306-

Skadden bonuses (2x Cravath) have been paid and therefore cannot be rescinded.

Anyone who thinks that most of the work is gone for long is retarded. Yes everyone was stupid to think that good times would go on forever. But everyone who thinks they are here to stay is an idiot as well. We've been in this a year, and may be in it for another year, but the population is ever rising, economies will continue to expand, and lawfirms will do well again. Chilllll

How could this possibly cause forced attrition?

The slow economy is not going to force attrition.

Face it -- law firm gigs are pretty sweet when there's no work to do.

A slight pay cut of 10K isn't going to change that.

Associates leave firms not cause they aren't getting paid enough, but because it FUCKING SUCKS when the hours are bad.

But when hours are good it's a great job.

311:

Sorry, was just using that as an example. Good to know - hopefully all of the people trashing Skadden on this board will shut their traps now. It is the leader in BigLaw compensation (forgetting Wachtell and other shops like it) now and other firms' associates are simply jealous if they post trash talk like "SkaTTTen."

306

Latham to 1200 billable hours

I wonder how clients will react when they realize that the associates' salaries are frozen, but the rates keep rising....

312-

Nope. We are at the end of a 25 year bull run. During the last two years there was unprecedented M&A activity that kept big law firms awash in cash. It is not coming back anytime soon.

The financial events of the last 4 months are a game changer. Corporate, capital markets, and real estate are over. Litigation ain’t going away, but the firms that did mostly deal work are gonna have a tough time getting through 09.

313 is right.

Cutting pay isn't going to force midlevel attrition.

That would only force attrition if there were higher paying jobs out there.

Attrition is going to be dead -- not only because of lack of jobs.

The low hours will keep associates milking the teat for as long as possible.

Every associate I know despises their job with a burning passion because of the hours.

But when hours are light, it's a great job.

So no one's going anywhere.

this cut isn't some machiavellian move to force attrition, or if it is, it's a poorly considered one.

it was done because the partners can't make payroll at current rates.

it was this or layoffs.

hopefully a no-layoff, low billing latham contribute further to its degrassi high like firm culture

fuck those cheap latham bastards.

I cant even communicate how pissed off I am at my cheap ass firm. Stop hiring so many fucking noobs.

2007: Latham to 190!

2009: Lathan to 1200 hrs!

Anyone who blames thinks that deflation makes this acceptable knows very little about deflation. Even severe deflation is not more than 1 or 2 percent annually. This is a 10% cut.

Firms better be litigation or bust.

Vault ranking are going to be all litigation, all the time.

Latham to 1200!!!!!!!!

Again, I propose a "boycott ATL" day in protest of Elie Mystal still having a job with ATL. The overwhelming majority of his posts have not only been riddled with grammatical errors, but they have also been shockingly irresponsible. Please, all readers unite to boycott ATL on Friday in protest of Mystal not having been "laid off" himself.

Hours burn out is the only thing that drives attrition.

All V20 firms should lower pay.

Associates would be happier for less pay in exchange for less hours.

Partners could keep a full stable of happy associates.

Maybe this new Great Depression will mean poorer, but happier, people.

I have to say -- it was right for Latham to cut pay instead of laying people off.

It's the decent thing to do.

And brave.

And no, I don't work at Latham -- I'm an associate at another law firm.

And honestly, I would happily take a pay cut to keep people I work with from getting laid off (the decent hardworking ones, of course).

2010 Vault 10:

1. Wachtell
2. S&C
3. Skadden
4. Kirkland
5. Cravath
6. Weil
7. DPW
8. Cleary
9. Covington
10. Williams Connolly
Simpson will be 11 and Latham will be 12

280 - thanks for your Gibson comments. I have 3 friends that work for Gibson (2 in NY, 1 in LA) and they absolutely love it there. If you can make the grade cutoffs they say, its the best firm to work for by far

328, you're proposed list shows how misinformed and unintelligent you are. Take the dick out of your mouth and slap yourself with it.

Latham to reverse bonuses!

I definitely think pay cuts are better than layoffs.

Definitely

Will someone from GDC please sent in a redacted version of their memo?

Cutting compensation makes people resentful. LW's associates are pretty much stuck taking it in the ass for now because there isn't really anywhere else to go. But, this will come back to punch LW in the face when the economy rebounds.

When the economy gets better, the guys who bill 2400 hours, direct the juniors and basically run the case/deal so the partner can go home at 7 will go somewhere else. If LW is lucky, they will go to another firm. If they aren't, they will go in house and never give them work.

There is a reason why firms traditionally have went out of their way to prevent their former associates from becoming disgruntled even when letting them go. I know plenty of in-house guys who feel burned by their former firms and will never give those firms work. This was a really short-sighted move on their part.

328 -- Your list is nutty, but here's one more thing: where's PW on that list? Sure, ranked 13 now, but being litigation heavy, you've gotta' put it up there.

- PW troll

Covington bumped salaries back in October. I.e., I'm class of 2004 and I've been getting $230k since October 1.

"I know plenty of in-house guys who feel burned by their former firms and will never give those firms work."

interesting.

329: Did you mean 244? If so, you are welcome. It really is a fantastic place to work. Perhaps not as much cache as other firms, but I am ok with that trade-off.

333: I would, but it would be pretty useless. I will describe why - the sheet of paper you receive is your written review. The only discussion of compensation and bonus looks like this:

2008 Bonus: XXXXX 2009 Salary: XXXXXXX

-244

I have heard rumors already of a Latham merger. I was working late tonight and overheard our managing partner (I'm two offices down) have the following conversation verbatim with our CFO (I took notes for ATL posting):

"Now, listen, Jerry, I'm looking for negative control. Okay? No more than 30, 35 percent. Just enough to block anybody else's merger plans and find out from the inside if the books are cooked. If it looks as good as on paper, we're in the kill zone, pal. Lock and load."

Latham is toast.

Seriously, some of you need to chill because you don't know what you're talking about.

1. You think the partners are doing this to keep their PPP high? Keep on dreaming kiddo. All Latham partners, like partners at other firms, will see a drastic decline in 2008 earnings compared to 2007. More than the so call 10% "cut" you're all moaning & pissing about. If you actually work at Latham, you'll no doubt have heard the grumblings about where unit value is projected to be at.

2. This salary freeze may or may not have any effect on bonuses. Bonuses are determined by only 2 factors. How much money is available and did a particular associate merit such and such a bonus. Latham traditionally wait until December collections have been completed to see where to set bonuses. This is the prudent thing to do. Who in their right minds would announce bonuses in early December and pay them by mid December before knowing fully what they're actually going to collect? Billable hours mean absolutely crap until they're realized, i.e. collected. For all the talk about Latham growing too fast, there's a reason why they have no debt and are not reliant on lines of credit like other firms, say the former Heller Ehrman. Guess who took over some of Heller's abandoned office space. Growing too fast? Some people are just plain stupid. In fact, look for a brand new Latham office in 2009.

3. I know exactly how associates' bonuses are calculated at Latham. The associates working hard and billing 2400+ hours won't feel this salary freeze one bit. They'll be taken care of and will get their share of the pie. The good attorneys who aren't billing because of practice group, etc. will still have a job for the inevitable turn around. The slackers won't have to worry about anything... they'll be fired for performance reasons in full daylight, no stealth technology needed and rightly so.

4. Reputation? Who really gives a rat's ass what incoming law students think? It's not like Latham or anyone else will be recruiting much in 2009 anyways. It's not like anyone has much of a choice there anyways. The bidding wars on associate salaries in the past 10 years have been absolutely ridiculous. To think that some of those guys have the gall to complain about rising tuition and having to pay off a $200K student loan. News flash... a lot of people earn much less than BigLaw salaries and are still able to pay off mortgages & living expenses larger than your student loan (hopefully consolidated at these ridiculously low rates) and NYC rent. When I was a first year, starting salaries at top law firms were around $65K a year and that's not THAT long ago. How quickly people forget. Cry more... your tears are very nourishing.

5. Attrition. LOL. I mean, really. ROFLMAO. Hell, you think the purpose of this announcement was to passively increased attrition because after all, we all know big firms operate on attrition right?

6. Incoming first years shouldn't be resting on their offer letters. Better read it carefully.

163 likes to drink the kool-aid

317 - no, you're totally right. We are going to have 25% unemployment for 10 years and no firms are ever going to have to merger or issue securities ever again. In fact, we'll go back to the barter system, so all of this salary freeze talk is irrelevant. We'll be talking about how many bananas we are being paid it.

Economies are going to grow, changing regulatory environments are going to create new work, new winners and new losers. Companies will be founded, grow and be destroyed. Will people be naive enough to think that money grows on trees again? Eventually of course they will. Things aren't going to be busy in exactly the same way they were before the crisis, and the aren't going to recover instantly, but there will still be companies and they still need corporate lawyers.

LW cut associate comp in the 1991 recession - down from $70k starting to $65k. Mostly this sucks because it increases compression - they should just drop all salaries 10% or whatever instead if they need to.

Let's stop this pay cut vs. layoffs discussion please. It's both layoffs and pay cuts, just open your eyes and look around! And WTF is the difference between official layoffs vs. stealth ones after all (except that it's most likely worse for the people affected in the latter case) - and please save me from all this meaning-of the-term-"layoffs"-discussion. And, mind you, it's very often not the best ones who survive these layoffs but the ones with less integrity. And yes, it will continue to happen as long as the associates willl play along. This is the worst kind of human humiliation and yes, working for such firms is simply a form of glorified slavery as somebody mentioned above. Too bad that too many associates actually endorse this slave mentality. Somehow it is hard to respect people who little by little loose all semblance of civility.

Risky move by LW. It could be that other firms will follow. Or LW could look ridiculous standing by itself among the better firms as the only one to cut salary and having to reverse itself later or face losing many of its best associates in the best practice areas.

Sorry 327, the pay cut may have been brave to avoid lay-offs, but the fact of the pay cut is just as bad. It shows unequivocally that L&W is in a weak position compared to its peer firms that are doing neither layoffs nor a pay cut. It's shocking, really. The firm must be in serious trouble, there is simply no other explanation. If I were at Latham, I'd be seriously worried about an implosion. Watch out for partner defections - that's the next sign.

340: It's call inflation. 65k back then equals how much now? What was the minimum billable hour req back then? What was the PPP? For all this talk about how associate salaries have ballooned, going from 125k in 2000 to 160k in 2007 wasn't much better than 3% inflation, all the while PPP and billing rates have exploded at a much faster rate. Not saying partners don't deserve the money, but associates are keeping less of the revenue they generate today than back then. Regardless of whether you make $100/hr as an associate or $10/hr at McDonalds, it's your right to complain if somebody jobs you out of a promised pay increase.

340 - so you're saying this wasn't done for PPP and wasn't done to increase attrition? Why do it, then?

347: $65K back then is about $125K now (2008) and I was generous, using 4% average a year. The point is that $160K for a first year is extremely generous for someone who knows absolutely nothing. They may be smart, but they don't know crap about legal in their first 2 years. Yet, you'd think they're walking on water with their talk of entitlement on ATL. Makes me sick.

If you want to make the big money, along with the big risk and tough decisions that comes with it, tough it out and make partner. Otherwise you're just hired guns.

By the way, billable hours back then weren't much different from now.

old fogey partners think the young'uns should just work for free, or maybe for hard candy and the occasional nickel tip for a memo well done. anything more is just pure, evil greed that must be cured with pay cuts at the first opportunity. good luck with your discount associates. i'm sure they feel extra chipper today not having all that extra money weighing them down. hope you don't look silly when nobody follows your lead.

Latham & Watkins = Costco of Biglaw

Costco is the only place you can get a $299 iPod for $289 and LW is the only place (for now) that you can get a $210k associate for $185k. Look out for a Sam's Club coming to a strip mall near you!

340: You're either remarkably short-sighted or just have no clue what you're talking about. Latham will lose the productive associates as a result of this move. They won't be able to recruit associates to do work in the hot practice areas. Lacking senior/mid-level associates to leverage qualified associates on their cases, the partners in those areas will leave too and take their paying clients with them. That's a cause for concern.

Your 65k starting salary comment is ridiculous. Please compare the inflation-adjusted percentage increase in associate compensation since 1990 to the inflation adjusted increase in PPP. Upon noting the giant disparity, go ahead and tell me who you think is being greedy here.

Any economics PhD students out there? Here is your case study. Start researching now so you can be the first to publish your paper on the largest and fastest law firm melt down in history. From V7 to zero in 3 months.

349 - you really don't have a clue. no one worked over 1800 for 65k. and just because you were a terrible first year associate doesn't mean that other people couldn't command their rate. I'm sorry you're a slow learner.

348: Do you have to ask? All firms, forget that, all businesses have to watch expenses in this environment. Salaries & benefits by far make up the majority of that. The pay freeze amounts to roughly $25 million in savings in 2009. Not because the firm needs to do that, but it is the prudent thing to do in an environment like this.

The only other way I know of to save that much would be to lay off about 120 associates. But if the philosophy is have enough manpower available when things turn around, it's better to keep your people rather than fire them and go through the expense of hiring and training them when you need to. That almost never works and takes too long. It's much more expensive to hire, even laterals and train them then to have your own ready to go. All the folks complaining that this means the truly under performing associates also get to keep their jobs do not know what they're talking about. Those guys will be let go at Latham or any other firm. It's the good attorneys that aren't busy due to practice and economic environments that are being helped. And should be helped, especially if the belief is that things will eventually turn the corner.

It's not that bad actually to keep your good attorneys that are only at say 75% of pace, at least for a while anyways. At their billing rate they are in a sense earning enough to pay their own salary and a share of expenses.

Besides, if you start laying off associates without a reduction at the partner level, your leverage will go shit anyways. And if you know anything about law firm economics, bad leverage is not something you want.

Latham associates aren't necessarily upset about the lost income. People who are pulling their weight will certainly be made whole through merit bonuses, and it's hard to argue that salary freezes don't make sense in this economy.

Still, the general feeling is that Latham should not have been the first major firm to take this measure. Now, when the majority of other major players follow suit (and they will), we will have to hear about "Lathamized" salaries.

345 & 352: Do you really think that Latham would not make their best associates whole via merit bonuses? Let's not make wild assumptions here. If you don't take care of your best people, I assure you, someone else will.

355 - even a first year at 75% of pace is lining the partners' pockets at LW. this is just greed, which is fine, but it will come at huge cost and will backfire. good luck with your raise freezes.

Word 357

356

356 - I think you may be trying to make yourself feel better. I bet you $5 most firms with PPP over a mil will not freeze salaries. Some have already committed to 2009 salaries on paper. Latham is going to stand alone among the top firms on this one. They should've just made the associates without hours take a 30 percent pay cut, with the understanding it was being done to avoid lay offs. I'd be fine with getting 70 percent pay if I only had 1000 billables and was woried about my job. This across the board communism just made all the busy associates extremely PO'd and is really bad for productivity. Not smart.

357: I think the damage is done whether LW tries to fix this via bonus or not.

360 - I don't know. The entire U.S. willingly elected Obama with his promise of the same... across the board communism.

356 how does the koolaid taste? like a pay cut?

360-

You may be right about me making myself feel better, and I'm actually a big fan of your idea of a 30% paycut for non-producing associates. You're also right that some firms have committed to '09 salaries. You're also right that busy associates are pissed, at least until merit bonuses are announced in January.

However, as a betting man, I think I'm still right that Latham, for once, will be a compensation leader on this one.

~356

356: You can argue that salary freezes don't make sense when partners are still making over $1M a year on average. You can argue that salary freezes don't make sense when the decreased demand for legal services has been caused at least in part by exorbitant rates - rates that have been increased primarily for the purpose of increasing PPP, not paying for associate salaries as claimed.

365-

Now that's communism.

~356

By the way, we have a new calendar.

356: Nothing communist about it. I do not think that word means what you think it means.

Isn't communism a form of jelly donut? If not, I might have to read some books or something.

I am awestruck with the naivete that abounds here among those who are supposedly educated...highly educated.
I am not an attorney nor do I work for a law firm. I am a business owner and as such, I have one major goal during this economic downturn...keeping my business viable through the recession. How do I do that?
I freeze the price of my product for as long as I possibly can. I freeze wages so that I can keep as many of my employees as possible. I freeze hiring, which may result in employees sometimes working harder to fill that gap. And here's the one most of you refuse to acknowledge....I tighten my own personal belt. I spend less and take little or no profit and I do that FIRST.
It's simple Business 101 and guess what you spoiled, intellectual, whiney neophytes? Law firms ARE businesses and not immune to the basics.

369 = law student troll

Associates refuse to acknowlege that they are the hired help. Nothing more. We partners are going to use this as a way to cut back salaries and benefits. If you don't like it, start your own firm. Its our money, and our business.

Management has recently announced to associates that it may have to reverse the much publicized "no layoffs policy". Sorry Latham-bound 3L.

nobody is going to give 339 props for the killer Wall Street quote? what would gordon gecko do?

It seems like an ideal time for firms to poach the best lawyers from other firms simply by paying them old market instead of new market. And an ideal time for associates who can afford it to move to lower cost-of-living markets.

Since the federal judiciary isn't get a COLA raise either, I'm not feeling quite as sorry for biglaw.

who fucking cares about vault rankings, you dolts? it's cash, pure and simple. if you don't pay top dollar, you get eliminated.

Daily reminder: Latham = firm of poors

People who would rather take a pay cut than see any layoffs at a firm who over hired the last 4 years = the lazy bastards with 1200 hours.

328 = Cravath troll. Cravath = V99

When I first saw TTT firms doing salary freezes, I figured that would be a TTT firm thing to do now.

Then Latham did it, which means either:

1. Latham will be one of the few who do this from the V20 firms, and become a TTT; or

2. Everybody will do it and we're all screwed.

I bet it's one.

Latham = 2012 V50

Stop with all this myth about how "oh, I went to law school and took out debt because I expected to make a lot of money."

There are hundreds of Cooley grads standing in soup lines with $100,000 of debt and a rejected Wendy's application in the mailbox.

Oh, you say, I didn't go to Cooley, I went to Michigan and have $120,000 in debt, I went to Penn and am stuck with $140,000 in debt. Tough shit. What, am I supposed to feel sorry for your decision?

You, who shopped at Whole Foods during law school, renting a two-bedroom apartment, buying four supplements per class. And, of course, you're only there because Daddy dropped a couple of thousand for you to take the Kaplan course, take the LSAT, retake the Kaplan course, retake the LSAT, and retake the LSAT.

You, who had a half-tuition scholarship from GULC, and a full ride from Boston College, decided to be risk averse. You knew you wouldn't be able to hack it in law school and grind out meaningful grades, so might as well play it safe and go to the best school you got into. That debt is just like fire insurance. At least you've got the diploma on the wall. He went to Minnesota? She went to Iowa? You'll feel better as you smirk and adjust your mahogany-framed degree over your desk.

You entered law school without a clue about how much lawyers made. Can I be a millionaire at thirty, you wondered. And that first of November, you began greedily reading over the Vault guides. You trolled XO. You scanned Greedy Associates.

The market was $125,000. That was big money. Real big money. I mean, sure, you couldn't be a millionaire at thirty, but you can do really well at $125,000.

Then, before you headed out to work for the ACLU that summer, salaries jumped to $135,000. Your eyes started to gleam. That's amazing! What a great salary!

And as interview season rolled around that fall, you were ready to rock it. 2001 seemed so long ago. The economy is in full boom. The swag is amazing. SBUX card? I wanted a flash drive.

And with an offer from Latham in hand, you shine your shoes and visit Brooks Brothers and buy a leather portfolio, and you hear that salaries are up again. $160,000.

It's mind-boggling. This is huge money! This is great!

Your 3L year is a little nerve-wracking. Yeah, I'm not sure, maybe some firms are doing badly, but Latham's not. They might go to $190. What, you didn't hear? Oh, I saw it on ATL.

And you get your first paycheck. And you're happy.

Then, the e-mail comes. "Sorry," they say, "no-can-do on the $170K next year."

And you're furious.

$125K seemed so long ago. In fact, you don't even think of it. You just Gchat the guy who booked Property and is looking grim at White & Case, trying to make yourself feel better. You knock on the door down the hall and try to cheerfully suggest bottle service Friday night. Maybe that'll make it better. Yeah.

Because, yeah, you deserve it, yeah, you deserve $170K. Three years ago, you deserved $130K or $600K, you didn't know which, but now, you know. And you're being screwed.

So you sit back down in your desk and tell people on ATL that, well, it's really bad. All this debt. All this debt. All this debt.

OK GUYS WALKOUT HAS BEEN MOVED TO QUIZNOS BECAUSE WE FOUND SOME INTERNET COUPONS AND YOUR FEARLESS LEADERS PREFER TO HAVE TOASTED SANDWICHES ANYWAY.

THE PASSWORD IS "LIPSTICK ON A PIG"

305 Excellent quote from an excellent movie. Never thought anyone else was paying attention to that line.

381 - bitter much?
------

I wonder why Latham didn't just encourage associates (esp. in corporate) to do a part-time schedule for like 60% of pay or something. They could couple that with the specter of layoffs or stricter performance reviews. The dead-weight would probably take the less pay and enjoy the free time while the busy associates would presumably continue working (with the promise that their compensation would remain the same).

Cutting associate comp. by something like $50k/partner is not going to prevent partner defections. More likely, it's geared toward showing people the door. But 2500 billers are more likely to seek the door, while the 1200 billers will stay put knowing that at least they have a paycheck, not matter how much smaller.

Good business sense in good times =/= good business sense in down times.

106--Paul Weiss

LOL at 381.....Michigan troll.

i have been told that many firms that seem to be "lockstep" actually pay the productive associates a bit more on the sly - although this sounds crazy to me, what do i know? it might be that if you did not get the secret bonii, perhaps it is because YOU SUCK and your firm wishes you to leave?

381 = teh lulz

as if some fucdush from michigan can look down at any law school in the country - after 8th ranked U of C it all sort of blends together

237--Keep laughing, but remember, we have ways of making your life even more miserable than it already is.

--PW Associate

Nice Post 381.

One interesting thing about this freeze is that it is from Latham. I don't think a lot of you understand how important Latham is as a market leader. Really, until now or maybe going back to 2007, Latham was arguably the best run law firm in the world. Really, it was the firm that the other firms wanted to be when they were honest enough to admit it to themselves. Latham had the global reach, it had the profit, it had the good lawyers, it had the nice firm culture, and everything it had, it was getting more of faster than the other firms.
Believe it or not, but it was a player primarily because of good sound strategy and management. The Proskauers and Clifford Chances of the world looked up to Latham for its profitability. The Cravaths and S&Cs looked at Latham (maybe not up, but on a pretty even playing field) nervously and wondered how they lost so much market share in profitable areas over the last 10 years. Latham was the best example of a non-New York firm coming to New York and really becoming a big time player. For third year associates who couldn't name a BigLaw law firm 7 years ago, you might not get this. But if you are a Senior Partner at Davis Polk and you have been doing big time, New York law for 30 years you have seen Latham rise up the PPP charts steadily for years. This means something to that guy.
So trust me, it means something that this is Latham doing this freeze versus some other firms. It is hard to believe that this will really turn Latham into a TTT. And they could be a market leader.

But if they are not, I know where my firm is going to do all its recruiting next year. :-)

Robert Dell is one of the best law firm chairmen out there. Were I still at a firm, I would be happy to have someone of his caliber calling the shots. These are tough times, and everyone is going to share in the pain. At least with Dell at the helm, Latham partners and asses alike can be reasonably confident that they'll weather the storm. Think long term, folks.

This will not lead the market. Firms are better off cutting bonuses than freezing salaries. Salary increases are paid over the whole year while a bonus is paid in a lump sum.

If you bump a salary because someone is now a 3rd year instead of a 2nd year, it also means you get to bump their billing rate and a rise in billing rates pays the firm a 2:1 ratio. Latham is trying to lower the market, but they are going to get crushed. They are going to lose attorneys and other firms will poach the real talent from Latham.

382 -- You and others stole my Subway joke from way back in the other thread.

381 -- Thank you. Now I know there is at least one other person who reads ATL who has common sense and isn't a greedy, elitest snob. Maybe when you make that much money, you don't have anything else to worry about except how to get more money.

And to save you all the trouble: es, I went to a TTT, work at a V-1000 or what ever the alphabet soup you all use around here is. And yes, I am very bitter.

392 - I bet billing rates will still go up. Just like this isn't going to add a year to the partnership track. I think just the pay scale slides back, not that associates have to repeat a year.

328 -- lol at covington > williamsconnolly. That alone shows how retarded vault is.

395 - If associates see their billing rates go up but not their pay they will not be happy and management won't have a good explanation. Unhappy lawyers leave. Some other firms will recognize you don't have to freeze progression of salaries to stay in business. You fire chaff and you don't send NY to 190!

Would clients pay increased rates for an associate knowing that the associate is making the same salary as last year?

356 et al. - Please post your bonus numbers when they come out. I'm very curious to learn whether you or any other high-billers are actually "made whole." I'm a doubter but willing to listen. We need lots of people to post, though, because the bonuses are not transparent.

211 - You are a freaking idiot. THERE IS NO 100% JOB SECURITY. Why don't you understand that. "Oh, but you promised... you wouldn't lay me off!!!". You're going to get a pay cut and possible layoffs if the firm believes it is in their best interest. Wake up son.

I love that 381 trots out the tired old line about rich daddies paying for Kaplan. First of all, the people at Penn and Michigan didn’t get there because of Kaplan. Kaplan is designed to help average test takers raise their scores (it’s great at getting people from a 150 to a 155). The methods aren’t designed for people who are already scoring a 165 and need a 170 to get into Penn. With a 165 you can teach for Kaplan. For high performers, the main benefit of Kaplan is that it forces some discipline on them and makes them study and take practice tests in exam-like conditions. That’s it. Even if you don’t agree with me and you truly believe that Kaplan can raise your test scores by 5 points, you’re just an idiot if you don’t take it (whether you’re filthy rich or living in a box under a bridge). Getting 5 points higher on the LSAT can get you a full ride or get you into a school where you’re career prospects are dramatically better. Anyone who chooses to forego a scholarship so that they don’t have to run up a credit card bill or sell their crap car or TV is an idiot. People don’t think twice about borrowing $150K for law school when they’re dirt broke, but somehow paying $1,500 to take Kaplan is this huge class issue. You can save up $1,500 waiting tables for a summer.

LW has already been doing some massive cuts in their overseas offices.

Hi, 401. The logic of what Kaplan actually does is irrelevant to the willingness of an anesthesiologist in Burlington to shell out money, twice, for the course. Lay belief of the Kaplan is utterly irrelevant to the discourse above.

-381

397-- Leave and go where? Generally, no one's hiring and many firms are cutting summer classes.

This thread has the distinct stench of below market pay.

The ironic thing about S&C and recruiting, is that word from inside the admin is that they are holding off announcing bonuses b/c they hope some Harvard recruits will take other jobs (maybe at Skadden). They don't want everyone to accept their offer at S&C.

Who cares. Latham became irrelevant like 5 years ago. Vinson & Elkins is gaining huge prestige points with this one.

the sticky wage theory, huh:
http://www.nytimes.com/2008/12/17/business/economy/17leonhardt.html?_r=1&hp

398 - usually when the class year starts work that on a friday was second year work on monday became third year work and was charged out as a higher rate. The client just got charged more for the same person to do the work.

Clients are paying for the experience level of the associate - just because the associate is being paid the same doesn't mean that his work is the same.

I agree with some of your overall points. I'd be thrilled if my firm cut my salary instead of laying me off. But I've seen the "you're only there because Daddy dropped a couple of thousand for you to take the Kaplan course" line a hundred times, and I've always thought it was a load of crap.

To get into a top law school you have to be a hard enough worker that you got excellent grades in college and you need to be smart enough to get a top 5% LSAT score. Nobody is there because they took Kaplan more times then the competition. That was my only point. I know I wasn't addressing the sense of entitlment that was the focus of your post.

-401 (a big firm lawyer who didn't get into a top 14)

Most of you are pathetic idiots!!! Stop wasting your times on these threads thinking that you know something about law firm management. FACE IT: YOU KNOW NOTHING!!!! This is all guessing and speculations. None of you know why this was done and what are the conditions of the firms who cut pay, bonuses, or conduct layoffs. You are just a bunch of spoiled overpaid kids who have nothing better to do with their time. GROW UP!

244 -- I have a lot of respect for your firm, but I disagree with your statement that the firm is "snobby" about where one went to law school. Don't get me wrong, I think it's healthy to hire non T-14s or whatever, but I know several lawyers there that did NOT go to pedigree law schools.

404 is right - this whole thing is driven by oversupply of lawyers. Salaries can keep dropping, bonuses can be slashed, benefits can be forgotten - all as long as associates have nowhere else to go. That's the situation now, and it isn't going to change until people start leaving the legal for profession (to go...?) or the workload across the board starts taking off again. It doesn't look like the latter is going to happen any time soon. So lawyers' options are to accept their plumetting market value or pursue a different profession. I'd actually prefer a lot of you do something else - it will make me more valuable, and your work product was never that great in the first place. (I hear medicine and energy are always good options - something about immortal and selfish baby boomers)

381 - brilliant. I heard echoes of Maya Angelou's inaugural poem in there.

The Vinson and Elkins douchebag is just making his firm look worse with his incessant trolling. It's a shitty firm. The trolling only displays your inferiority complex.

414 -- why? what's going on w/ v&e? i missed it.

the v/e guy has got to be joking

Anyone complaining is just a jackass. It is simple: if you want to hold the hammer, get your own clients. If you don't have those clients, you are completely replaceable by any of the hundreds of thousands of other lawyers in this country and should not be making $1MM+ per year anyway. And any firm that pays a service partner that much is run by a bunch of idiots.

This doesn't kill recruiting - not while other firms are doing lay offs and some will probably follow the pay-freeze line. What would kill recruiting would be rescinding offers to 3Ls and no-offering all of your summer associates.

This doesn't kill recruiting - not while other firms are doing lay offs and some will probably follow the pay-freeze line. What would kill recruiting would be rescinding offers to 3Ls and no-offering all of your summer associates.

Haha - sticky wage theory. Just proves how much economists really know.

If we all spent more time doing work and getting clients rather than reading these dumb threads and speculating about stuff we know nothing about, maybe our firms wouldn't be laying us off, cutting our bonuses, and lowering our pay :).

Heh.

have any firms rescinded offers en masse? ever?

Daily Math Reminder:

Skadden 1st Year = (Latham 2nd Year) + ($17.5k) - (painful embarrassment)

Wake up everyone, there will be the following:

1. Slashed bonuses for 2008.
2. Pay freezes for 2009. Hiring freezes too . . . duh.
3. More layoffs in 2009.

Maybe even a few more biglaw firms will implode.

Why is it that every time there is a little news, everyone has to go through like the five stages of grief. Sheesh . . . get a grip and move on people.

422: good question. i'd also like to know.

Why should any partner give a shit that you have law school loans? Arguing that you should be highly paid because law school costs alot is just idiotic. If you are just doing this for the pay, you are going to continue to be miserable leeches complaining about what you believe you are entitled to for the rest of your lives. Go out and make something yourself rather than sucking off the teet.

426 = miserable leech sucking off the teat.

Maybe the Latham partners gave all of their money to Madoff to invest.

WHEN DO JONES DAY COMPENSATION LETTERS GO OUT?

WHEN DO JONES DAY COMPENSATION LETTERS GO OUT?

422 - Yes, and this decade... consider Gray Cary (now DLA), Brobeck, etc. during the dot bomb.

163 nailed it. There will be layoffs Latham, and bonuses will suck. The floor set by Cravath will be the ceiling at Latham.

Do you think the partners give a fuck about what Bob Dell said x number of months ago, or what kind of bullshit John Clair will say to everyone today in LA?

Latham is a corporate firm, despite their profession of having a diverse practice. Those of us in litigation and especially IP will just have to take it up the ass for the time being.

Pretty soon we will be partners anyway so it doesn't matter long term whether we make 185K or 210K this year, next year or whatever. Before we know it, we will be the ones sticking it to the associates.

We are lawyers, and we are getting good experience and training at Latham. Just keep your nose to the grindstone and don't whine. That will just give them an excuse to shitcan you when the list is made.

Suck it up, and just keep billing.

So let me get this straight. My billable rate went up this fall to reflect my additional year of experience, but my pay won't go up on January 1 to reflect my additional year of experience.

I love working for a law firm.

431 - but Brobeck went bust and Gray Cary got eaten. Any lawfirms that still exist? I have to believe that this is the MOST TOXIC move a firm can make, recruiting wise, as I could not imagine someone choosing a firm they know might rescind their offer if things went bad if they have an offer from any other firm, even a much smaller/crappier one.

I'm not arguing that law students are entitled to jobs or anything like that. But if a firm gives you an offer and you don't look for other post-graduation employment based on that offer, I think you have a right to be royally pissed if it is taken back. At the very least firms should give incoming associates a chance and can the ones who can't hack it.

I don't think there will be layoffs at Latham unless we go into Mad Max territory. If they were going to do layoffs, I think they would have done them instead of the pay-freeze. Why be known as the firm that both did layoffs and pay freezes? Latham just decided that this was less damaging than layoffs and went with it instead.

431 - but Brobeck went bust and Gray Cary got eaten. Any lawfirms that still exist? I have to believe that this is the MOST TOXIC move a firm can make, recruiting wise, as I could not imagine someone choosing a firm they know might rescind their offer if things went bad if they have an offer from any other firm, even a much smaller/crappier one.

I'm not arguing that law students are entitled to jobs or anything like that. But if a firm gives you an offer and you don't look for other post-graduation employment based on that offer, I think you have a right to be royally pissed if it is taken back. At the very least firms should give incoming associates a chance and can the ones who can't hack it.

163: I've been a partner at a top NY firm for many years, and either you are the most intelligent and eloquent third-year law student who ever sprung from the forehead of Christopher Columbus Langdell, or you are, in fact, the Latham Executive Committee member whose perspective is being offered. My guess is the latter.

LW recruiting strategy in a nutshell:

There is a vast oversupply of law school grads, even highly qualified ones. And there will be for at least the next 6-8 years.

So we can do whatever the fuck we want.

Many good posts out there. 392, I disagree with you. Most firms have had pretty good cash collections in 2008, they just know that 2009 is going to be much worse. Thus the problem is not their cash situation now but their cash situation later next year. As a result, I think that cutting salaries is a better choice for firms than cutting bonuses because the salary cuts -- if they stick -- will pay continuous dividends. It will also allow firms to continue to reward high performers and keep them around while paying less to those with less work.

Also, I think all of this talk about Latham losing prestige is a little overblown. They are still very prestigious and I think a lot of firms (including some good NYC firms) will seek cover behind Latham's announcement. There will be more firms that are freezing salaries.

I left Latham a few months ago thinking things were going as well there as anywhere given the current downturm. I feel for my friends and former colleagues. This was a blindside, and I think anyone who is a BigLaw associate should be sympathetic. This is going to happen to most of you, if not for 2009 then very likely for 2010. Budget accordingly.

I left Latham a few months ago thinking things were going as well there as anywhere given the current downturm. I feel for my friends and former colleagues. This was a blindside, and I think anyone who is a BigLaw associate should be sympathetic. This is going to happen to most of you, if not for 2009 then very likely for 2010. Budget accordingly.

429/430--

My guess is Friday.

442 -- Thanks. I can't see it being any later than Friday.

442 -- Thanks. I can't see it being any later than Friday.

For most firms I think it is too late to pull this BS. Many associates have had reviews and letters already sent letting them know what they are making next year. I fully understand that firms can rescind those compensation letters and messages, however, I do not believe they will b/c that will crush morale even more than what is probably happening right now at Latham.

If 2009 is as terrible as Cravath wants everyone to think it is going to be, for the firms that it may be too late for this year, do they do what Latham just did? Does Latham have another pay freeze next year? Does Latham catch up its associates if other firms freeze next year?

What's so hard to understand, self-proclaimed geniuses? It's called a market adjustment. Google it.

446, yes, it is a market adjustment by an inferior firm. It's that simple. And this page will live on in infamy on google for the next decade, for all to see how Latham couldn't cut it as a first-tier compensation firm. Out compensated by OMM? Give me a break. Despite OMM's vault rankings, there are >50 firms that I would have expected (and now do expect) to continue lockstep salary increases.

Latham is already backing down from their "no layoffs promise."

Bottom line is the story isn't over yet. Let's see how everyone's doing 3-6 months from now. I'm not gonna make any judgments about any firm's strategy right now.

Look at all the whiny babies complaining about a firm's business strategy while raking in $200-$300k per year in the worst economy in 70 years. Be happy you have a job. A potential pay freeze isn't going to reduce your quality of life one bit, even with your outstanding law school debt. Just make the monthly payment and stop crying poverty.
What if your firm does a pay freeze...would you prefer a pay bump instead, but combined with layoffs to some degree? How sure are you that you won't be one of those laid off?
Your firm exists to make money. It's a business. You're a lawyer, so just keep your head down, get those billables, and practice law. Then leave the business decisions to those who know what's best for the firm who have all the pieces to the puzzle in front of them.

Texas is not above the fray. Just wait.... BIG firms (Texas and non-Texas) in Houston will be bleeding soon.

Other, more "stable" (i.e., conservative), firms here are receiving unprecedented amounts of resumes from partners and groups of partners to jump ship as they see they are only band members on the deck of Titanic. These partners have sexy books of clients, but their clients have no business. Its been crickets for a while now down here... and don't let anyone tell you otherwise.

BUT... we still have a lower cost of living, better QOL and NO state income taxes.

Hook 'Em!

Can someone confirm the retirement plan explanation for all of this (Latham partners have to make up the losses in their retirement plan that occured this year)?

That would make me feel better about my firm.

http://abovethelaw.com/2008/04/featured_job_survey_and_your_f.php

HAHA

285, if you're happy there's less work and you don't care about being laid off I guess you must be sitting on a trust fund or inheritance or something.

I have a family and debt, so I am desperate to keep my job.

LATHAM IS CHEAP. DO NOT WORK THERE. RENA AND SHYER AND CREW--way to use the downturn as an excuse to screw staff.

I am a non-senior paralegal who was substantially above pace this year. Guess what I recently found out on December 24? YOU PAID MANY SECRETARIES A BIGGER BONUS THAN I RECEIVED. Secretaries who are champion internet surfers, can barely run a blackline, and who leave at 5pm on the dot. Secretaries that DO NOT WORK because the associates they work for HAVE NO WORK.

I WORKED. HARD AND LONG AND LATE. AND I DIDN"T GET PAID SQUAT FOR ALL OF THE SACRIFICES I MADE.

It's good to know, when I have more skills than most first years, and even second years, for that matter, how much Latham values skilled paralegals.

Oh, and all those nights and weekends I worked in 2008? That client that ruined my winter and spring by calling me in every weekend? I won't be available in 2009, except when I need the money.

Thanks--I'll be voting with my feet in early 2009.

Shockingly, there are TONS of associates and paralegals in my office who have been WAAAAAAAY below PACE all year. The first year that sits across the hall from me billed THIRTY hours in November. Yes, she came to work and did less than an hour a day of work. No, she wasn't profitable since you wrote that all off.

I, on the other hand, billed mid-six figures in 2008, very little of which had to be written off. And you thank me with less than one paycheck.

AGAIN, LATHAM IS CHEAP. DO NOT WORK THERE.

Bitter paralegal here again.

I'd like to add that my CLIENT gave me a bonus (in kind) that was worth more than half of the bonus the firm took it upon itself to give me. (Yeah, I accepted it, even though it was in violation of firm policy!!!!)

THANKS AGAIN.

You stay classy, LATHAM!

Bitter paralegal again.

I'd like to add that Latham does do really inferior quality work. When I first joined, I was shocked by our shoddy firmwide forms bank and precedent library. Most lawyers are allergic to the slightest bit of drafting--they rely 100% on precedent (and often forget to take out previous client details which are confidential). The culture: complete lack of concern for what's "right" or "best for the client." Most partner decisions are made with a view to collections or clients' deep pockets, wholly antithetical to the V5 firm I worked at previously, where the focus was on actually doing what was best for the client.

Latham, I pity the exodus of true talent that will occur once you pay associate bonuses. And good luck getting your stubbies and loafing first years up to speed. At least in my office, they even screw up the pro bono cases they're working on (exclusively). AHAHAHAHA!

Latham suffers from a top-down problem--a culture that permeates the whole firm. Latham does not have a one-firm mentality--it has way too many lateral partners for any sense of collective belonging or common goal. It's a firm of gunslinging cowboys who treat associates and staff like commodities. With such a culture so ingrained, it's well nigh impossible to ask your people to feel any sort of loyalty or willingness to roll up their sleeves for the cause.

But I'm super-glad Latham will have improved cash flow in 2009, we still have completely useless global offices (yes, you Middle East!) and a ton of lateral partners who haven't panned out as revenue-generators. Fantastic management.

371--The problem is not that "Associates refuse to acknowlege that they are the hired help," but that you partners fail to see that you are nothing more than the "hired help" of your clients. I can see from reading these posts that big firm attorneys are no more aware of their actual status now, then they were when I came out in 1990 and went to work at a big firm. My firm later failed, in part, because of the pervasive sense of entitlement throughout the ranks. You guys need to get real and learn once and for all that you are, after all, just working stiffs.