Fight the power, law students! First years to 190!

The ship be sinking...

2 - you mean 190 days of severance benefits?

I took an offer from a lower-ranked firm while I had offers from a few V15s. Last I heard (although this could have changed recently), I still had an offer to go to one of those firms after my 3L year. If the lower-ranked firm cuts, I guarantee I will go to the V15.

I understand the desire to cut, but it will definitely have an effect on where talent goes.

Cut the shit Elie. Go do some real reporting for a change and get on the phone!

"Salivating"? Seriously? We're talking $10-30k per associate, realistically. $5mm, while it may seem like a lot to mere mortals, is a pretty small percentage of an V100 firm's annual revenue. Not likely worth the recruitment and morale hit.

You are all idiot lemmings.

Skadden Secure

ps: You are all idiots

7 -- every penny counts.

If firms were going to cut salaries they would have done it during the recession, which ended in February. The bull market started in March so obviously lowering pay now makes no sense.

Surely a race to the bottom in first-year pay will spark a reduction in law school tuition. Oh, wait, applications are at an all-time high. Never mind.

As in incoming first year (hopefully), I would work for A LOT less than 145k. I think most 3Ls realize that you only get one shot at BigLaw. With that in mind, they could pay me 60k for all I care, so long as I keep a job in BigLaw until things turn around.

5- what did you do, triple split your summer? Smells fishy to me.

This is not the sort of cut that I am usually asked to do, but in a depressed economy I will take what I can get.

Will law students let them? Hell no... if they can't get their $165 from firms, they'll just go to work on Wall Street... oh, never mind.

There have been comments in the threads about places like Holland & Knight and Greenberg Traurig cutting associate salaries, but ATL hasn't followed up. These firms are not the most prestigious firms, but they are national and other firms might take notice.

Follow up ATL.

12 - if pay drops to 60k, hours better drop to 900. Of course, that's all most first years can bill now anyway, but at least we can end the charade of 2000+ billable requirements.

Every 1L I know is expecting a salary cut for everyplace except NY. And based on the alumni partners I've had breakfast with, they see it coming too.

Is it a small percentage, yes. But it sells well to clients and partners as putting more emphasis on bonuses. Downside, this is exactly the kind of thing that caused banking to take such big risks (only short-term bonuses instead of long-term salaries and growth).

-1L

Where is Nervous T10 1L? Haven't seen him in a while. Did he finally drink himself to death?

When the cuts come, ATL will cover it! And provide the cover for other firms to "follow the market". Just like they have with lay-offs, and as they did back in the days of irrationally sky-rocketing salaries. ATL giveth, and ATL taketh away.

17,

Exactly. If we can't bill the hours, don't pay us as much. But, that's a hell of a lot better than getting cut out of the BigLaw loop completely, right?

Besides, eventually we all have to realize that 160k when you're billing virtually nothing is just an awful business strategy and puts everyone at risk. All of us are better off if the firms find ways to make money.

The V15 won't cut pay but the rest will?

Ignorant Sidley trolling and Gibson hating.

First of all, a salary reduction to 1st years would like pull down the entire pay scale as well. Firms would simply shift everything down and save significantly more than $5MM.

I think it would make sense to reduce all base salaries and increase bonuses for hours billed. Enormous fixed salaries are a very poor business model. Lower base with larger bonus potential allows firms to reward high billers in good economies and automatically reduces expenses in down economies.

As an incoming 3L I have to say: I really hope that firms do this if it means not revoking offers. For the love of god, if you are deciding between axing half the incoming class and lowering salaries to 145k, even 125k, do it.

freezing salaries, deferring start dates and layoffs were said to hit recruiting as well. That hasn't stopped the best of them from doing it too.

My V10 firm hasn't done any of the above and I hope the trend continues. But I don't see what's to stop a Latham, A+O, or White+Case from doing it.

If it does happen, it would probably be with incoming summers. Telling a 3L or clerk that you won't pay him as much as you first told him you would seems to be a worse PR move than just telling 1Ls that their summer salary, and consequently starting salary, will be lower than previous years. Then you're not taking away what was promised... and the 1L is just thankful to have a job.

I'll take15k less in order to secure my job.

Not totally sure, but I think that incoming associates would have a good breach of contract claim.

25 - that's true, but doesn't save $$ now. Firms are looking to balance books today, not in 2011/12 when the current 1Ls start as first years.

24,

Even 100k! 80k! Anything but revoking offers! If our offers get rescinded, what then? I guess I'd try to go to business school or work in another industry....but the legal career would have to put on hold.

13,

No, summer offers from OCI. One V15 told me, after I ended up turning them down (I tried unsuccessfully to work out a split with them and the firm I'll be at this summer), that I have an open offer to come back after 3L.

- 5

lol @ 5. obvious flame.

I would gladly take 20-30k less if it means that I can keep my (deferred) job.

april fools? :(

Stealth layoffs at Russel Stover.

Folks -- It's much more profitable for firms to have fewer people billing a ton. Given that, it's unlikely that a firm will slash salaries in exchange for saved jobs or job offers. They might fire and slash though.

I bid 10 more posts till the support staff/associates "you aren't worth it" "neither are you" flame war begins.

I hope they don't cut our salaries 14.50/h! Blubber is expensive as it is.

Fact is, good people are busy and don't want their pay cut to subsidize you.

31,

Wrong. I don't think it's all that out of the ordinary for a firm, if they like you enough, to tell you to call them after 3L if your 2L summer firm doesn't work out. I have a fairly desirable background that is desirable in this economy.

- 5

27.

We are revoking your offer. Your analytical abilities are not up to our standards.

--- The Hiring Committee

27 - yes absolutely true, this is clearly a breach of contract issue. write me up a memo on this please, and enjoy your sub-median law school grades.

or do we just assume now that comments like 27 are flame?

Agree with 5. I turned down multiple V10's for my lower ranked firm. I will be extremely pissed if they cut salaries while the places I turned down maintain.

30 - yeah, good luck with that.

preferable to layoffs.

34 - this is a law blog. why do we care if a candy company is having stealth layoffs?

Because bilables will be down at least 10% for a great majority of most people anyway, I see no problem with taking a pay cut. I'd rather people just keep their jobs, honestly. It doesnt take much for you to get a partner that leaves or a project that falls through and suddenly you have trouble making your hours and bam, you are gone.

The issue of course is what about the few people that are making their hours. Well, shucks for them, there are just too few to matter. Possible issue for when work picks up and you arent paid more, but when the demand gets high enough, pay will go up again anyway.

And if anything, this will just seperate the real firms from the wannabes. The rush to 160 was silly anyway. NY firms can bill more, so it makes sense they can pay more. Why florida firms thought they could compete is dumbfounding...

41: It's flame.

So, nobody remembers like two weeks ago when Katten essentially cut first year associate salaries to $128k?

41: It's flame.

40 = racist

Elie, I have never criticized you before, but here it goes, and it's not an April Fool's joke.

"It seems almost painfully obvious that not all of the firms that moved to $160K can (or ever could) afford $160K."

Have you ever broken down law firm economics? So long as that associate is not a lazy piece of ____, that salary is absolutely affordable.

Furthermore, has ATL become a sounding board for what BigLaw partners want to hear???? Is ATL commencing a "conversation" about the last dreaded nail in the coffin to the associates that have managed to hang onto their jobs (besides being fired)? Is ATL being paid by BigLaw to become an associate sounding board to see how salary cuts would be received?

Give me a break. There is no need for this. BigLaw associates can do better than a blog that is paving the racetrack and acting as the pitcrew for the race to the bottom.

Don't worry ATL, we'll get the bottom even without you guys helping it!!! But what about looking out for your readers' interests???

Hilariously, firms like sidley will probably drop out of V15 only to be replaced by the better managed places like GDC. While the V5 is pretty static, its pretty hard to make the argument that the V15 will be after this year.

5/30:

Stop deluding yourself. The V15 you turned down may have taken you back in a good economy, but sure as hell won't at this point.

Dear V30 firm I will be going to,
Please don't do this.

Yours (till Sallie Mae says otherwise),
John Tesh

Dear Law School,
I will be picking up my financial aid exit questionnaire today. I was just wondering if any of the questions are, "While minimizing your expenditures, you still had to take out 160k in loans - do you know how absolutely fucked you are?"

- jt

I love the inanity of the comment about the desire to lower salaries but unwillingness to lower that rate at which the associate is billed to the client.

Are you truly so obtuse that you fail to acknowledge, or worse still to understand, that clients are putting downward pressure on billing rates and requesting a higher number of audits for hours billed and individual conducting the work???

When will Elie take ATL above the fourth grade? My apologies to competent 4th graders everywhere by the way.

"Will law students let them"

We yield power? SWEET!

-Law student

I think 27 is right. To balance out the new rules that allow Obama to invalidate bonus contracts for rich people, they are also enacting new rules that change employment at will arrangements into five year employment contracts for poor 3Ls.

5/30:

Stop deluding yourself. The V15 you turned down may have taken you back in a good economy, but sure as hell won't at this point.

43,

Like I said, I don't know if the offer still stands. But if my firm cuts, I will call the partner who offered the option to me within five minutes and I'd find out soon enough. All I'm saying is that if the option still exists, I will jump on it.

Of course, I'd be rising that the V15 would cut at a later date. But it's worth the risk for me since it was a close call between the two firms in the first place. I doubt I'm the only person in this position.

- 5

Reed Smith is a law firm.

12,

What else would you do for your one shot at biglaw? We are all whores.

12,

What else would you do for your one shot at biglaw? We are all whores. You are a cheap one.

These comments shed light on the ridiculous inefficiency of the recruiting process, in which firms have to calculate their needs 2-3 years in advance. The NALP regulations are crap. Time to revamp the system.

First, highly paid summer associate programs are nearly useless money pits. SAs should be paid commensurate with their abilities: about $4-5000 for the summer. Maybe less.

Secondly, OCI should be moved to the end of 2L year. That shortens the length of time into the future that firms have to forecast their needs. It's insanity to ask firms to predict their staffing needs two years in advance, and as the current crisis illustrates, it doesn't work.

These changes would bring the legal profession more in line with how other business sectors recruit and hire incoming talent, as well as save money and reduce the possibility of revocation of offers/first-year layoffs.

Who's with me?

To all the people who think cutting salaries will save your job - see Latham on freezing salaries. A lot of good that did the 200 or so that got cut.

If a firm is desperate enough to cut salaries, you can bet they're going to be cutting heads too.

Hey 5, if 15k really makes that big of an impact on your career decisions you are likely to be a very unhappy lawyer.

53/59,

The economy wasn't so great when I got the offer to return (mid-January).

- 5

Salaries went up because that's what the market forces supported. Now they're going down for the same reason. You have twice as many new associates competing for half the work.

In the late 90s a first year made 70-100k. There's no reason why they're now worth almost double that.

I would take a pay cut in exchange for 1 night of unbridled bliss with a CWT NY 05 female associate.

Sausage King

When you take overhead, such as office space, health insurance, support staff, various forms of "perks" into account ,a first year costs way more than 160k. While some of the costs are fixed and scalable, many are not and can be reduced in order to save cash. Therefore rescinding offers makes more sense than a pay cut. But lawyers are bad businessmen so you never know...

Sure; cut 1st year salaries by 15%. Please make sure to also cut something off my current 45,000/year law school tuition which is used to pay Profs, secretaries, lawn mowers etc. who should also be taking 15% paycuts...

68 - Salaries went up back then because billables went up. If salaries go down to those levels, the top students will do something else where you get paid the same for less hours. I got paid $70k for 40 hr/wk before law school. I wouldn't have bothered applying to law school if I had to work 80 hrs for the same pay.

64/68 -- which is why its surprising that summer salaries aren't being slashed. Summers in a market like this really aren't entitled to anything more than living expenses.

Firms won't cut salaries before layoffs because no matter how little you pay them, associates billing 0 hours are overpaid.

My guess is you won't see an across the board salary reduction. Rather, I think you'll see that firms are going to keep salaries frozen for any associates who do not make the firm "billable " requirement; whatever that is. Thus, a lot of associates are going to have their salaries stay the same yet again in 2010, because they won't be able to make that minimum. Those who hit the minimum or go above will get a salary increase. From the firm's perspective, they can make the freeze "performance" based by tying it to hours, and will be able to avoid raising salaries in 2010 for more than 50% of their associates, because work is slow for so many. What is an associate going to argue? I billed 1700 hours, so I should get my increase?

Elie, Elie, how many ways do I hate you? Let me count the ways:

1) I hate your ignorance of basic journalism.

2) I hate your disdain for people who will be able to cut it in big law.

3) I hate that you are a cheerleader for the dissolution of big law.

4) I hate your complete lack of drive to investigate these matters and produce quality articles.

That is all for now.

"Will law students let them?"

This just may be the dumbest statement I have heard in months. Have the last few months not shown everyone that law students have no power? Associates have no power. These days attorneys are lucky to have jobs--at whatever pay is being offered. An attitude adjustment is long overdue. Too many unemployed attorneys and not enough jobes=no power.

12,

The number of shots at Biglaw depends on where you start. Start in V10 and you can get in probably 3 different firms before you are forced to be the lowly "of counsel".

The real question. What is more prestigious of counsel (or counsel) at a V10 or partner at a V50?

Uhm didn't McGuire Woods cut 1st year salaries to 144K a few weeks ago?

Give me back that fillet-o-fish!
Give me that Fish...
Give me back that fillet-o-fish!
Give me that Fish...

Increasing base pay never made sense to being with. It makes all the sense in the world to reward people for generating increased revenue for the firm, ie billing more hours. By shifting more of the compensation to the bonus, partners can incentivize the behavior that they want out of their associates.

The only thing Mystal wishes were coming is a big platter of cold cuts.

64 - You're right but you'll never convince firms to do it.

It also cracks me up that firms are willing to pay fat recruiter fees to headhunters when they could do a significant amount of their own recruiting and save some serious coin.

Of course, that would mean embracing the notion that lawyers DO recruit directly from their fellow law firms and they would have to stop hiding behind the pretense that using a headhunter somehow gives them honor in not poaching from one another.

Lots of firms have cut salaries (see, e.g., Katten, McGuire Woods amongst others) and 64 is dead-on. The biglaw recruiting process MUST change.

ATL only adds fuel to the fire and makes things worse. Stop this nonsense and stop making things seem worse than they really are-- otherwise it'll be a self-fulfilling prophecy.

62/63

If you've been in biglaw for a few years that's very easy for you to say. Must have been nice riding the wave.

12

64 - You mean my understanding of Real Property won't determine my future legal career? That's crazy talk!

85 - How is life in your world? Clearly you've contructed analternate reality that makes you happy.

A lot of people are living in a fantasy here. Do you really think recruiting is the main concern for any firm outside of the top five at this point? Salaries are irrelevant; it is billing rates that are the problem. First years could easily continue making 160 at a lower billing rate -- if they were busy. Ask around at a busy, small firm -- their associates could easily be making a big firm salary, because they are actually billing, without huge rates. This salary talk is just a way to avoid the fact that the majority of the top 100 firms are not worth the cost much of the time

72 - agreed about rising billables causing rising salaries, but that cuts both ways. Once a couple firms (especially in CA) raised starting salaries, everyone else had to match in order to stay competitive. Associates really just went along for the ride, seeing their income increase 50% every year. If salaries go down now, just as billable rates and hours are going down, I'm not sure too many law students will just up and do something else. All the other jobs are drying up, too. There are not many options right now.

73 - the longer I practice the more I hate summer programs. What an absolute waste of money.

- 68.

52- there will be alot of vault movement this year, but i doubt sidley will be the big loser there.

Latham, White/Case and Clifford will take the primary hits, given the timing of the survey and the bloodletting at those places.

EAPD will be cutting salaries. Our managing partner slipped while giving his "no need to panic" speech after last week's cannings and said that a salary review was underway to evaluate how associate pay could be more aligned with partner pay. The understandable flurry of questions seeking clarification were brushed aside as premature, but the implication is clear: base pay will be substantially lowered, with more comp coming from "discretionary" bonuses - sufficiently discretionary to render them meaningless.

if you are giving out 100% offers to their summers (as firms have done in the past and will continue to do in the future) that the need to evaluate them at all. Just recruit at the end of law school and hire people outright.
Until BigLaw starts to work like I-banking where a significant portion of the summers don't receive an offer, the 2L summer associates make no sense.

71--Please......grow up.

72--BFD if "top talent" goes into other professions. There will always be qualified attorneys.

Jeeze....hasn't everyone learned that the arrogance of the "top talent" and the rhetoric of the prestigious just don't cut it in todays market.

93 - You object to pay for performance?

Firms should evaluate and hire after 3L. Terminate SA programs. They are worthless.

The people saying they could cut to 80k etc are crazy. They need to have a salary that is shockingly higher than what you can get working in the government jobs. Right now entry level federal gov't work in DC pays in the 60s and above. Spend a year doing a clerkship and you are 70s and above. Who is going to turn down a lower hours, substantive work job with the gov't for a long hours, doc review job with biglaw if it only pays $20k more? Give me a break.

And the federal gov't keeps increasing pay 2-4.5% each year which means the salaries I cited will only be even higher when todays 1Ls graduate.

95: You beg the question. I don't object to pay for performance - as long as people are fully and fairly compensated for what the work that they do. Any system that builds unbridled discretion into the majority of the comp to be paid, however, is destined to screw people over. Look, I agree that first years aren't worth 160K at a lot of firms (depending on specific economics, of course). But the bottom line is this: you work 2200 quality hours, you you deserve top dollar. Period. Many of the wannabe firms used the 160K first year pay as bait - we're top tier! - then pulled the switch by paying high-performing mid-levels not much more than that.

If the top 15 were to cut their salaries to *gasp* even 120K do people really think the "top talent" would go to another firm? with the market the way it is if all the firms started doing it wouldn't matter, they'd still EASILY be able to get students from top schools and with top grades. There are so many lawyers that fit the bill. They are crazy not to do it.

97--Anyone looking for "prestige" and the chance to grab the brass ring of partnership. That is what the majority of associates are slaving away for anyway--that pot of gold at the end of the rainbow. There will always be dumb smuck lining up for a chance to be a big law partner. A branch chief at the fed gov doesn't have the same salary or bragging rights.

Since Weil is going for the 2 year deferral I can definitely see them cutting pay 65k/year.

97--Anyone looking for "prestige" and the chance to grab the brass ring of partnership. That is what the majority of associates are slaving away for anyway--that pot of gold at the end of the rainbow. There will always be dumb smuck lining up for a chance to be a big law partner. A branch chief at the fed gov doesn't have the same salary or bragging rights.

I don't give a shit how much you people get paid as long as my bill goes down. Shouldn't you all be working?

I heard Greenberg Traurig cut incoming associates salary. The world is going to implode.

This message board is full of partners trying to push salaries lower. Damn you greedy bastards. You know its also going to force rates lower and potentially your salary.

While cutting 1st years to $145k or so makes sense, shifting to a more bonus-heavy model would make life at a firm even more miserable. Don't underestimate the value of a big check as motivation to keep slogging through doc review for another month.

103 - You're off to a good start here; keep it up.

ATL should stop encouraging firms to take more drastic measures... Who's side is Elie on, anyway?

If a firm is actually does something like this, report it. Otherwise stop repeating speculations about what some talking head thinks "could" happen.

ATL should stop encouraging firms to take more drastic measures... Who's side is Elie on, anyway?

If a firm is actually does something like this, report it. Otherwise stop repeating speculations about what some talking head thinks "could" happen.

Lulz at everyone who doggedly continues to refer to BigLaw as "prestigious."

FYI:

Laid off = Not prestigious
Rescinded offers = Not prestigious
Deferred start dates = Not prestigious
Salary freeze = Not prestigious
Salary cuts = Not prestigious
Billing 2200 hrs/yr = Never was prestigious, even less credited now that they're cutting your pay.

The trick is not that it will be a salary cut for anyone already in the system rather it will be elemination of the lock step system. First years will come in at a reduced salary. After the salary freeze ends they will implement an elimination of lock step which means that most associates will not receive their automatic salary bump.

I wonder if client pressure for quality associates that merit their billing rate will force a change in recruiting.

I think clients would prefer that the associates working on their cases were selected based on their three years of law school and several internships, rather than their rudimentary understanding of 1L classes and their ability not to get drunk at an SA event.

Just a thought.

98-- Any system that builds unbridled discretion into the majority of the comp to be paid, however, is destined to screw people over."

You aren't playing little league anymore--not eveyone deserves or should get a trophy. It is time to can the attitude that everyone in the same position should get the same pay. Employers should go with merit pay ---but, of course, then there would be a bunch of discrimination claims every time a woman or minority rec'd a lesser salary---even if they deserve it and no I am not a racist or a male.

Posters on this board like 51 know nothing about law firm economics. Sure, the V15 can bill out their first years at $400 an hour, but the rest of the firms can't. That $100+ an hour is a huge difference. Plus, just because you bill work doesn't mean you actually collect it! Or that the firm isn't writing off your time or giving the client a 10% discount on your work.

100 is shockingly out of touch with reality. Maybe its true that 'prestige' and a chance at the partnership is the pot of gold at the end of the rainbow. But just see what kind of law students pursue careers in Big Law with a cut to $80K. Just see.

100 -

Sure those people exist but the vast majority of every class is full of people who are doing it for the money. And the firms need those people and want them to fill their leveraged doc reviews and other hour heavy tasks. They don't want their classes to shrink in size because of increased competition from the gov't.

100 - buh. ull. shit. Either you know it's bullshit, or you went to law school on your Aunt Muffy's dime can't imagine having a debt burden.

100 - buh. ull. shit. Either you know it's bullshit, or you went to law school on your Aunt Muffy's dime and can't imagine having a debt burden.

115 abd 116---There were plenty of lawyers before salaries went to $160 and there will be plenty of lawyers if they shrink to less. It is you who are shockingly out of touch with reality.

Signed,
Not 100, but been around long enough to know the score

51 is a JERK

I would say that a significant majority of biglaw associates are much more interested in work experience than the money, and they would gladly accept a pay cut. Anyone who says anything to the contrary is kidding themselves. A few people commenting on ATL give the impression that the money is foremost, but that is simply not the truth.

Who says "last dreaded nail in the coffin" anyway?

51- ATL is looking out for the majority of its reader's interest. Maybe not the minority that comments, though.

120 go back to your Ex Comm meeting, ___ing a__.

-51

I'm not a lawyer but I married one. I asked him what his firm - who had a massive lay off about this. He basically felt the 160K for starting was safe but felt that they were going to start slashing associates salaries. Both the partners and the counsels took a decent hit and the partners were going to have to hit the associates so that the counsels wouldn't protest too much.

But this isn't incoming associates biggest problem. Even though his workload has picked up again- and last year was the worst he had ever seen - it still is pretty slow. Young associates are not getting the experience they need. Most of the young associates are at least a year or two behind where he was at that stage in set skills. Being hired in the early 90's - he watched a lot lawyers fazed out leading to a dearth of middle associates at one point. Also, while he had excellent training at D&P for host first four years, he says that most firms tend to hyperspecialize their attorneys today - which has really hamstrung them if they need to find employment.

He truly feels for anybody graduating law school today. It is a far different world than he graduated in. Even though it was a recession and 1/3 of his class at U of M didn't land a job - those that did were still mentored and trained - something that just isn't occuring today.

And that was the second time I got crabs.

Gimme a break. A paycut most would accept I agree in this economy to save jobs. But $80K? Absolutely ludicrous.

121 - thanks, Client XYZ!

123 = The Ghost of President Nixon

Gimme a break. I agree that most would gladly accept a paycut in this economy to save jobs. But $80K? Absolutely ludicrous.

-115

7 - morale and recruitment will not take a hit. fresh faced attorneys with 6 figure debt will take whatever jobs are available when they come out of law school.

sure, the top 10 or 15 firms may stay at 160, but the rest got their ginzus out.

Even if there isn't great disparity between a first year atty at a law firm and a first year attorney at the fed gov, the bottom line is that you have slow salary growth with the gov and you never reach the level of partner pay. Thre will alway be "top talent" as people love to throw the phrase around ATL, who will suck it up in hope of some day making a big law partner's salary. It is never going to happen at the government and for some people, that isn't good enough.

94 - you have no idea how the world works. it isn't about arrogance, it's about value. every profession cares about whether the best people are not choosing that career. do you use Infoseek or Google? do you want that risky cutting-edge brain tumor surgery performed by a "qualified" doctor or a hot-shot who perfected the technique? etc. etc.

I agree there is a lot of hot air about "top talent," especially with regards to bonuses at failed financial institutions. But I'm talking about demographic shifts. If people need to choose between going to undergrad engineering school for a job paying $70k at 45 hrs/wk or shelling out $200k for 3 years of law school to work 80 hrs/wk for the same pay, do you not realize that a LOT of people would choose engineering? Now, not all people can do engineering, but the best people can do anything. And who wants to pay $400/hr to a bunch of "qualified" rejects who don't really add any value?

$100K > $60K which would be the alternative for lawyers taking small law or government jobs. Sure there are some exceptions but overall there are not. The firms could easily cut to $100K and get just the same amount of talent and people from top schools who need work and want to make more than just enough to make student loan payments.

If I don't make more than a federal judge, I'm quitting and taking a job on Wall Street. And by that, I mean sweeping trash on Wall Street, b/c that's the only place I can get hired.

-First Year Associate

113 - I don't necessarily disagree with you. I guess I'm not being clear. I don't think everyone deserves a trophy, nor do I thnk that anyone is entitled to a biglaw job with cushy pay just because they chose to suffer the incovenience and expense of law school. Put simply, I'm all for merit-based pay in principle; it's just that I don't trust (my current) employers to get it right. There needs to be some level of standardization in the comp struture, so people at least have some precedent to compare their comp with and on which to base future expectations. Highly "discretionary" pay structures become virtually arbitrary.

Latham cut pay 100% for over half of their NYC first years. Let them work from home too.

A salary cut won't save jobs any more than any of the pay freezes did. Salary and hours billed are independant variables. Firms that want associates billing 2200+ and are willing to lay people off, will have layoffs and hiring freezes until they get to a point that all associates are billing 2200+. It doesn't matter how much they pay. The idea that it saves jobs just makes the cuts/freezes easier to swollow in the short term.

Whether both are actually necessary for a particular firm to stay afloat is another issue. I'm sure they are necessary some places, and at others the partners are just greedy. (Or, both could be true . . . a profitable firm could need to keep its greediest partners happy in order to stay afloat.)

135 = nervous junior partner, waiting to get de-equitized

For many years I have urged the firm's management committee to consider hiring barristers from India and the Philippines in lieu of hiring overpaid associates to do menial tasks such as document review, due dilligence and bate stamping. Here are the facts: foreign barristers (with emphasis on experience) will work for the equivalent of $20-25 an hour. If you obtain 2,000 billable hours from a foreign based barrister, the firm can bill them at normal or even slightly reduce rates of $350.00 an hour. That is an annual revenue of $700,000.00 per barrister. At $25 an hour, the barrister is paid $50,000.00 resulting in a net profit of $650,000.00 per barrister for the firm. The beauty of this plan is that there is no overhead expense (i.e., office, secretary, perks, etc.) with hiring a foreign based barrister. If the firm hires an inexperienced associate out of a top school, we would have to pay $110,000.00 more which I would rather capitalize on the firm to protect us from these horrendous economic times and from the wealth robbing policies of the Obama administration. I believe most firms, including my own, will start to consider this plan.

Partner Emeritus just made me poop my pants a little bit.

Vagina eating Lemons.

What about AmLaw 200 firms that do NOT currently pay their first-years above $140k--paycuts for them, too??

Geezzzz. Another one.

That's it, I'm moving to the Philippines. $50,000 = 2.4 million pesos. Between that and the sexy, sexy ladies, I'd be living the motherfucking dream.

Partners should be ashamed of themselves for making $1 million plus per year while debating whether they should lay off young debt strapped lawyers or just decrease their pay. Are you kidding me?! How about this, Partners, show some class for once and honor all of your offers. If you have to cut pay, that is perfectly ok, but any pay cuts should apply to every associate and partner in the firm, not just the incoming associates. I'm sick of the "I got mine, but you can go f*** yourself" mentality that exists in biglaw.

I love how the law students who have never worked as lawyers are so willing to take salary cuts without knowing the amount of time this job takes from your life. Good luck with that whole "I'm a total p*ssy" thing. By the way, remember when bonuses went from $115k to $32.5k? Screw any law firm that needs to nickel and dime another $10k from its associates.

146--agreed, but many of the partners will tell you that they never had the 160k salary as first years and so that they are all the more justified in keeping their moolah

146--agreed, but many of the partners will tell you that they never had the 160k salary as first years and so that they are all the more justified in keeping their moolah

146: Then work in government.

LOL at 133: "Now, not all people can do engineering, but the best people can do anything."

HAHAHAHA. True, the "best" people can do nearly everything. Many people with extraordinarily high IQs can learn and master nearly any subject. The problem, my friend, is your underlying assumption that those "best" people, capable of "do[ing] anything" are the ones currently occupying the ranks in BigLaw.

HAHAHAHAHA.

146 is right. Firms that share the pain will be known as such and benefit from getting better recruits in future years.

V3 TL

This comment is addressed to post no. 146.

I grew tired of this generation's "self-entitlement" and "me, me, me" mantra. What has this generation of lawyers done to enhance the profession? Nothing. All they care about is money. I consider myself a pioneer of this business. In 1967, my first year as an associate I earned under $20,000.00 a year. Did I complain? No and neither did members of my class. We developed professional relationships, worked hard and forged business alliances that furthered our careers. The bonuses and the money were secondary. We loved being lawyers and practicing the law. This generation is all about the money. This generation does not care about establishing nobility in the profession. Just reading the posts on this blog makes me shake my head and frown. So my question to you is: why honor the dishonored?

Hey 146 - in case you hadn't noticed, the legal profession is about competition - for money, for clients, and for victories. It was those super-competitive partners that created all the business that permitted all the first years to have jobs. Now that business has dried up, you can't expect all those hypercompetitive partners to all of a sudden make nice and eat losses.

How about this - I bet you wouldn't want the top 10% of your law school class to have their GPAs redistributed to the bottom of the class. Same here - too bad, so sad for the associates at the bottom.

"too bad, so sad" has to be the dumbest saying since the "too much information" craze of the late nineties/early 2000s.

154 = best argument exposing hypocrisy of law students and junior associates EVER.

Everyone bitches and moans and partners and their salaries, and yet that big paycheck down the road is what everyone wants from big law. I wonder how many of you would be willling to cut your pay after years of busting your balls to make partner, just so that some snot nosed baby lawyer can get his or her $160. The ride was great while it lasted, but the economy stinks. Times have changed and associate salaries are going to be changing with them. Partners will jump ship and take their business with them if their profits are cut...and that starts a slippery slope to a firms demise. Firms will continue to compensate partners in order to keep their book of business. Associates will continue to slave away (if they have a job to go to) in the hope that they too will make a partner's salary one day. Knock off the rhetoric. You would take a very different position on partner pay cuts if you actually were a partner. Just stating reality.

Signed,
Not a partner, but hope to be one someday.

155: Where have you been? TBSS was dumb LONG before TMI.

151 - spot on!

-an engineer-turned-lawyer

I'm not blaming partners for not eating the losses. I wouldn't if I was them. This is a business where everyone looks out for themselves and we all know that going in.

Grand Rapids to 110!

Partner Emeritus had a good thing going for a while -- may have even convinced people that he was a partner. But his last post proves once and for all that he has yet to graduate law school (assuming he's a law student and not law firm support staff). Barristers argue motions and try cases (i.e., they're at the bar). Other legal tasks in English-style legal systems are handled by solicitors. Idiot.

NY to 120!!!!! Whine all you want but it is happening!

Hahahahahahahahahahahaha

162 - leave Partner Emeritus alone. He's having a hard time these days - swelling prostate, botoxed wife, senility setting in. Plus, it's 1:00 in NY, so he's 4 martinis deep.

154 said "How about this - I bet you wouldn't want the top 10% of your law school class to have their GPAs redistributed to the bottom of the class. Same here - too bad, so sad for the associates at the bottom."

The same folks that support Obama's economic plan would LOVE that idea...since the principle is the same.

Hear, hear 154. It's unfortunate, but true.

Leave Partner Emeritus alone! He can't help the fact that he was born with a face that looks like a vagina eating lemons.

To Partner Emeritus:

Once again, I empathize with you. You may recall my suggestion of a poverty tax: increase the marginal rates of the nonproductive layabouts earning less than $250K to 69%, while those productive -- and thus beneficial to the economy -- enough to earn above the $250K demarcation are rewarded with a 15% flat tax on all earnings (this would be a reverse Laffer curve incentive to work: hence, my name "The John Galt Tax").

I would now go one step further and offer that the legal profession, like the tax code, must be changed to reflect productivity. No on doubts that first and second year associates are nonproductive, therefore why pay them at all? I think the time has come for those wishing to enter this honored profession to be willing to PAY large firms for what is, in essence, their apprenticeship. In return for paying $75K a year for his or her (preferably his, of course) first two years, the young professional will be taught the tools of the trade. Successful completion of the internship leads to a paying job starting at $145K.

Only those truly in love with the law would remain. And the effects of the Galt Tax will incentivize them to generate business.

157: I would. Because when you hire a person to work for you for a certain salary, you make them a promise to pay that salary. You (hopefully) are doing so because you think this person can help you grow your business (either can bring work in or do the work you bring in while you go get more). Your promise is to pay; their promise is to work. They don't participate in the upside; you do. You get the varying risks and accompanying rewards, and you promised them stable employment for a certain wage.

Before you jump all over me, (1) I am not a partner, (2) I am an associate, (3) I owned a business before becoming a lawyer and my business employed others, so I have actually made these promises and kept them--even when times were tough, and (4) I would be the first person to get rid of an associate (or other employee) if they don't keep their part of the bargain (and I have). Business ownership is all about risk/reward, while being a hired employee on a fixed wage is about security. You get paid less as an employee than as an owner when times are good, but that is the bargain you make for stability when times are bad.

Oh, and yes, I get at-will employment. The "promises" of which I speak go to a person's word and honor, not what they can wriggle out of under the law.

To Partner Emeritus:

Once again, I empathize with you. You may recall my suggestion of a poverty tax: increase the marginal rates of the nonproductive layabouts earning less than $250K to 69%, while those productive -- and thus beneficial to the economy -- enough to earn above the $250K demarcation are rewarded with a 15% flat tax on all earnings (this would be a reverse Laffer curve incentive to work: hence, my name "The John Galt Tax").

I would now go one step further and offer that the legal profession, like the tax code, must be changed to reflect productivity. No on doubts that first and second year associates are nonproductive, therefore why pay them at all? I think the time has come for those wishing to enter this honored profession to be willing to PAY large firms for what is, in essence, their apprenticeship. In return for paying $75K a year for his or her (preferably his, of course) first two years, the young professional will be taught the tools of the trade. Successful completion of the internship leads to a paying job starting at $145K.

Only those truly in love with the law would remain. And the effects of the Galt Tax will incentivize them to generate business.

Mark my words - 1Ls with top grades/credentials that receive multiple offers for 2L SAs next year will be choosing primarily based on what happens to this year's 2L summers. Firms that no offer or cold offer this summer or that cut back to 10 weeks are not going to get top candidates on board next summer.

LAYOFFS RISE

SALARIES FALL

WE'RE ALL SCREWED

165 - it's not exactly the same principle. Wall Street gambled and lost with the money and assets the middle class provided them.

Conversely, associates gambled their futures on the money the partners would give them.

Partners are entitled to the benefits of the money they earned from clients, whereas Wall Street types took other people's money and lost it.

I can't help but chuckle everytime I see a post where some law student or associate suggests that partners should cut their comp so that associates don't have their comp reduced or suffer lay-offs. I wonder how many of those same associates would be willing to take a paycut so that staff don't have to have their pay cut or suffer layoffs? Think about that before you start partner bashing next time. FYI--I am neither staff nor a partner.

121 is funny. Yes we would like the work experience promised during the summer associateship and glossy brochures. But we all know you are not going to give it to us. At most 5% of the time. No one is getting the real legal experience they would get at a smaller firm or the government.

Greenberg Traurig cut SA pay by 10% and dropped the program from 10 to 7 weeks after already taking a lot fewer SA than preceding years.. granted it's not a "top" firm but it has an international presence others will surely follow suit. It only takes one to set the collapse.....

This comment is addressed to posts nos. 162 and 168.

162: associates, of counsel, non-equity partners, solicitors, barristers, etc. are all the same to me. While you are correct, do you think I have the time to drag myself down in minute details? Perhaps you do which would explain why either your grades are below stellar or why you are not billing enough quality hours to keep your current employment.

168: A laudable concept but it would not work in practice. I believe in paying my fair share in taxes. I just don't believe in being penalized for being successful, which is what the Obama administration wants to do and this is the reason why business is slow (e.g., industries are relocating to tax and environmental regulation free friendlier countries). If you voted for Obama, go cash that hope and change he has brought to you at the bank.

171 -- oooh, I'm scared. Another overindulged child waiting for his trophy.

171 - Mark my words: 1Ls with excellent credentials will drink whatever Kool-Aid the firms are peddling and jump at the best deal they can get, regardless of what happens to this year's summers.

132 --

Law firms make partners out of top gov't employees all the time. Look at our current USAG. He went from a slew of government jobs to making millions at Covington. Plenty of other examples of gov't to biglaw partner (often biglaw associate to gov't to biglaw partner).

This isn't decades ago where you only had the chance to make partner at a firm you started out at fresh from law school. In fact, my firm seems to hire more people outside the firm as partner than from the group of associates who stick around for eight years (at least in the past few years.)

Latham will have to seriously up their recruiting at Hofstra and Pace next fall.

173 - um...yes it is. Just like Obama's economic policies -- it's the "spread the weath" mentality but using GPA instead of money.

I'm sorry you can't see the parallel...

PE: Thank you for the information. In 1967, $20k as a salary would have the equivalent purchasing power of some $127k today. If you took your 1967 salary and adjusted it based on the inflation rate of college tuition (I'm using American, because I could find it easily in a Google search.), the starting salary at law firms today would be nearly $525,000. In 1967, tuition was $1550 per year; Today, it is $40,584. That doesn't include inflation for textbooks and living expenses which many students incur debt to pay during law school.

One thing's for sure. The economy's definitely made law students more creative. http://www.blackbooklegal.com

180--No doubt about that. But the fact remains that gov employees will never make what a big law partner makes unless they go to big law and, there are only so many top gov jobs that will translate into big law partnership.

146, partners are already taking 25% cuts in PPP. They also take on the risk of more fluctuating pay in the first place.

Let's see, a 25% cut in your base salary means you'll be paid $120k. Ok sure, if that's what you really want...

182 - Ah, I see your point. I'll make mine more clearly.

Partners and top 10% law students earned and are entitled to their gains.

Wall Street and junior associates did not earn and thus are not entitled to their gains.

Thus, redistributing grades and law profits is unfair, but redistributing ill-gotten Wall Street gains is fair.

3L here who would gladly work for 80k

46-- Show me a Florida firm paying $160. Seriously.

Partner Emeritus is great even if he is a law student. Otherwise, he would remember that in 1968 Cravath raised salaries (a lot ) to 15K. PE surely was not making 20 K in 1967.

This comment is addressed to post no. 183.

Based on your numbers, it would stand to reason that enrolling in law school today based on the inflated tuition rates is a foolish and reckless financial decision. I am not the one forcing people who have nothing going for them to enroll in law school. If I were a young college student, I would not consider a career as a lawyer. Indeed times have changed, right Obama supporters?

183: Stop equating starting salaries with tuition costs. Law firms have no say in what the law schools charge. It's the law schools themselves who figured out that as the gatekeepers to jobs paying $160K, they could gouge students. Don't blame the firms for the fact that law schools chose to take advantage of your avarice.

174 makes a good point. Just how many of you who think partners should reduce their comp or be canned would be willing to take a pay cut or support another associate getting axed sothat staff don't have to have their pay cut or suffer layoffs? Same principle.

187 - Granted, Wall Street executives (Madoff et al) may have gotten bonuses that they shouldn't have, but Obama isn't just going to take from them - he is going to take from EVERYONE at the top - you get points for trying though.

Indeed, 192. If applications drop, and they haven't, law schools may drop their tuitions. But that is not the case. The Market Hath Spoken.

here's a novel idea:

How about law firms start acting like every other business in the world and start HONESTLY paying people based on performance and profitability.

Lock step salary structures promote decreased work ethic and increased sense of entitlement.

Oh, what would corporate associates do if they actually had to be good at their jobs changing names on contracts and telling CSC and CT Corp. what to file and when?

It is about time associates started getting compensated based upon what value they add to the firm. It helps everyone, even associates. If you are slow, you should get paid less, even if it's not your fault. Then when you have to work longer hours, greedy partners have no excuse to not pay you for it.

Maybe this can be the catalyst to profit/performance based compensation for associates.

- mid-level tax associate (billing 200 a month and subsidizing corproate associates' currently inflated salaries)

@190, re-read p emeritus's post. He claimed he made UNDER $20K a year, not $20K a year.

197 - nevertheless, the point stands that 1967 salaries, when coupled with cost of living and cost of education, are not comparable with today.

196--you're a tool. And if you are really billing that many hours--which I doubt--then get your ass back to work instead of reading law blogs.

140 - Partner E: Although they listened to your drivel, they realized you have no clue on how to run a business, as evidenced by your zero overhead assumption . . .

Lower pay for lower hours! It's time for firms to allow flexibility in hours and pay.

You and your out-of-the-box thinking, 201. Get back in your box, er, office, and have that due diligence to me by tomorrow morning.

-Your Partner Overlords

Elie, I've never criticized you before, but . . . ahh, screw: I troll you and this board constantly.

If partners really think like Partner Emeritus, we are really fucked.

2L GULC

2L GULC - consider yourself fucked.

183 -- Let me ask you a question. If I take out a huge loan to buy a boat, should my salary go up accordingly? Or does that have no relation to the amount of money I can command for the work that I do?

Anyone going to law school because of what they think their starting salary will be is a dope. Its reasonable to consider whether a particular career will afford a comfortable lifestyle, but to crunch the numbers and figure hmmm, law school loan payments of ____, offset by a salary of ____ is just asking for trouble and/or a world of unhappiness.

177, I love you, but you're flat out wrong.
The USA is still one of the cheapest places to run a business. Why? Because all European nations have a "business tax" that ensures against lawsuits, toxic cleans ups, and universal health care. You are simply wrong about "business flight." Flight to where?
-Now, I'm not saying that other nations don't have a competitive advantage because they pay their labor nothing, but those actors do NOT allow competing (USA, European) businesses to enter their market. Trust me, Walmart cannot head quarter in China even if it wanted to, and it would have moved to Europe long ago if it were, in fact, cheaper to headquarter there.

If my firm cuts my incoming salary I am going to go do something I actually enjoy

206---Of course. If you have a big loan payment, you should get a big salary. Duh. Everyone knows that, or at least everyone who went to a T10 school. You are entitled toa big paycheck as long as you have a big loan. Now don't you make a big downpayment or buy a smaller boat, because then your entitlement will go waaaay down.

When will one of you partner haters answer 174's question? Are yeady to fall on your sword for your assistant?

If first years were making $100k ten years ago then their salary has gone up 5% per year over the last 10 years. I don't see how that can seriously be described as a skyrocketing salary. It's barely more than a cost of living increase.

206 -
if you take a huge loan out on a boat, the amount of $ you charge people to take a ride on that boat GOES UP ACCORDINGLY!

It was closer to $13K, actually. Those of you who have lawyer parents can ask them. And the work wasn't much more pleasant either. What's changed is the % of time you can make billable now because of technological velocity, but hours were bad and people slept in the office back then too.

Salaries need to change because they've grossly outstripped inflation and market demand. But working conditions, which are hellish, also need to change.

If first years were making $20k 40 years ago then their salary has gone up 5.5% per year over the last 40 years. Not exactly "grossly outstripping" inflation. And billable targets were in the range of 1600.

The CPI has gone from 34.8 in 1968 to 215.3 at the end of 2008, or a 6.19x increase. If first years were making $20k in 1968 then they would have to make $124k in 2008 just to keep up with the CPI.

174, 211 - hell yeah, if I were making a mil a year, I would be more than willing to take a substantial pay cut for a deserving, hard-working, non-douchebag assistant/associate. When times are great, partners profit immensely yet their assistants/associates get the same pay. When times are rough, rather than bear the brunt of the burden, partners axe those below them (and still make a ton of money). Basically, it seems like they have all the upside and very little of the downside. It's weak and spineless to shift the downside onto the little guys.

196 - Corp associates were subsidizing your ass during the boom, so STFU.

Yep, 217, you just highlighted the advantage of being a partner. Lots of upside, little downside, and risk shifts to associates and staff. In the grownup world, we call that "performance incentive" - work hard, make money, get promoted, live well.

218 - oh really?
2400 is not subsiziding someone billing 2000+.
2000+ is subsidizing someone billing 1000.

Learn some law firm economics.

No work? Blame your partner that can't bring in business. Busy associates are tired of paying for you to sit around, read magazines and leave at 5pm everyday.

Indeed, 219. As the days go bye, you may find yourself behind the wheel of a large automobile. You may find yourself in a beautiful house, with a beautiful wife. And you may ask yourself, "How did I get here?"

It's because you busted your hump and made partner, that's how. And all those hours billed have earned you that ginormous chunk of change. Keep it, spend it, it's yours.

"work hard, make money, get promoted" -- hahaha, more like work hard, make money, get fired!

Yeah, but a boat's a boat. The mystery box could be anything. It could even be a boat. You know how much we've wanted one of those.

222 is right if and only if most firms fire all their associates. That is so far from happening that it's laughable. The stark truth is that most firms will hire thousands of associates. This "lost generation" talk is nonsense.

I love how many of you state that graduating law students made "a reckless financial decision" by choosing to go to law school. I started law school in 2006 - when I applied, federally subsidized, fixed-rate loans were at 4.5% APR, I received multiple loan consolidation offers in the mail every day at 3 or 4%, associate salaries and PPP were skyrocketing, and the top students at relatively cheap, public university law schools were still getting offers from top firms.

Did I choose to hike interest rates to 8.5% within a year of starting law school? Did I decide to end loan consolidation? Did I hike associate salaries beyond levels that would allow partners to keep us on without taking a hit to PPP? Did I make the decision to push back start dates and rescind offers?

I did exactly what any sensible person in my position would do - I calculated the risks, saw a great financial opportunity, and went to a public law school where I could get in-state tuition and keep my expenses as low as possible. I worked my ass off and got great grades my first year, while working part-time jobs to reduce the amount of loans I needed for living expenses. I got a couple of SA gigs and did what it took to get the offer (admittedly, not much). Then I sat back and watched the economy crumble before my very eyes before I even had a chance to prove my worth. Can one of you geniuses explain what part of that is reckless? Can one of you geniuses let me know what zero-risk, high reward opportunity I just completely missed in 2006?

I'm not entitled to jack, which is precisely why I never asked to get 160k, I just asked for an opportunity to go work at whatever rate the firm decided was appropriate. Criticize my decision to go to law school all you want - I didn't ask for any of this crap. Call me a whiner all you want - walk a day in my shoes and maybe you wouldn't be so flippant about the completely raw hand I've been dealt. Seriously people, what the hell else was I supposed to do that could have prevented any of this?

123 - ATL isn't looking out for our interests. ATL is making sure the site gets enough hits to keep Elie in jelly doughnuts. And so we have posts like this one; random speculation that drives traffic on a day without any layoff rumors to trumpet.

It's not your fault, 225. It's not your fault. It's not your fault. It's not your fault. It's not your fault. It's not your fault.

*Hug*
*cry*
*go see about a girl*

Partner emeritus outed himself as a dumbass law student slacking off through Tax II. Anyone who has ever received work back from India et al knows it's worse crap than what comes back from contract attorneys. Sloppy crap that needs to be largely redone by the 1st year doing "second level" review who could have brought the work to that same point on the 1st level. Clients are just stupid and buy that selling menial work to India justifies the partner's huge rates for a few more hours. The joke is that the 1st years are still in the mix, still billing, and often charging more than they would have. It's not saving costs, it's just savings arguments with clients who only pay enough attention to be pains in the ass.

Way to stick it to an avatar, 228. And here I'd been taking PE's advice as gospel truth. Thank you, thank you, thank you for saving us all.

225, yes, because we all know that in the entire course of mankind's economic history interest rates never go up, which is why you are always entitled to borrow at the old interest rates of 2006.

LOL @ 227. I like them apples.

220 - I was billing 2700+ hours and the lit and other associates were billing about 1950. I'm still on track for about 1700-1800 this year. Again, STFU.

229 - You mean you haven't been taking PE at face value. 228's revelations hit me like a lightning bolt.

Oooo, corporate v. litigation associates in a dick-measuring contest. Yawn.

229 - I didn't say he WAS a partner emeritus, it was more to the point that he IS a dumbass law student. but seriosuly, you're just so clever, I'll just go cry because your devastating wit hurts so much.

230: Either you're flame or you clearly missed the point; maybe both. Where in my post did I say I was entitled to the interest rate of 2006? I was relaying to you the information I had at the time in order to make a decision whether or not to go to law school. Further, why would someone who has the ability to accurately forecast the state of the US economy and corresponding interest rates three to four years into the future (something no expert in the entire world seems capable of doing) go to law school?

51 - right on. MysTTAL - you suck - die, thx

223
than he/she obviously isn't talking about you. there are associates not billing near the 17-1800 hours you describe and still getting paid on the 160k rate schedule.

What sense does that make?

51=237

A good friend of mine entering law school this fall (class of 2012) is facing a choice between HLS (with 0 financial assistance) and Michigan (with full scholarship). Which would you guys choose?

237,
All of these commenters have become apologists for how little they deserve to be paid. 212, 215, and 216 have correctly pointed out to Elie that the pay is in line with inflation.

-51

235 - I didn't say he was a partner emeritus either. My point was that he is an avatar plying his shtick on ATL, and you just pointed out the stunningly obvious. Incidentally, the sky is blue and the sun rises in the east.

-229

228 is quaking in his winged tip loafers that Ravi Patel, Esq. is going to replace him down the road.

239, how was the Ex Comm meeting? I am 51. FYI, 237 is a separate, but equally astute commenter unknown to me.

240 - Really? There's no question. The potential upside from HLS isn't that much greater than Michigan (prestige hounds be damned), and having zero debt is like getting a blow job from an angel - the best thing ever. Go with Michigan.

240 -- Michigan, unless friend is set on practicing in LA, NY, DC or SF biglaw.

Nice simile, 245. That does sound like the best thing ever.

240: Don't listen to 246. Your friend should definitely go to Michigan.

240,

this reminds of a guy in the 80s who got admitted to Cooley and Pepperdine. Cooley gave him a free ride. Pepperdine gave modest aid. WEll the guy turned down a free ride, went to Pepperdine law, fucked around and caught AIDS. Moral of the story: free ride is almost always prudent.

240 - Michigan's a great bet even at full price, one that places well in all of the cities mentioned by 246.

Just know that being last in the class at Harvard will still be better than last in the class at Michigan. (And as smart as your friend is, s/he can't control where s/he ends up on the curve.)

So if your friend would feel more comfortable with higher job prospects and higher debt (ie s/he's willing to pay for less risk), then go with Harvard. It's obviously less risky than Michigan (to the extent Michigan can be described as "risky," of course, which isn't all that risky in general).

But, in today's economy, I'd probably pick free Michigan over full price Harvard, simply because debt is a burden that wears in more ways than one...

140, Texas already fixed that potential problem. It'd be unethical nowadays. That's why we're still livin' large down here; and always will.

Michigan is still in the Top 10 (I think it's actually in the Top 5 for recruitment value). A HLS degree is slightly better than a Michigan (or Stanford, or Chicago, or Columbia) law degree, but a HLS degree is only minutely better (I'm saying this as a Michigan grad, but it's true).

If she's in the top 25% of either one, she should have no problem with her first job. almost anywhere in the country, including SF, LA, NY, DC, etc. If she's in the third quartile or the bottom 25%, she'd be slightly better off going to Harvard but she wouldn't be guaranteed to get a job that would let her easily pay off her student loans.

Go with Michigan in a heartbeat.

240 here, just clarifying. She'd still have debt coming from Michigan. The full scholarship only covers tuition, not COL and other fees.

If I remember right, she'd be in around $90k debt coming from Michigan (this includes her undergrad debt as well) and $240k coming from HLS.

Does that change anything?

183 here. I'm not making the point that first year associates are entitled to any particular salary. My point is that if law schools want to attract talented, intelligent individuals, they have to be aware of the entry costs to the profession.

I was making over $80k when I enrolled in law school. I make $115k today. Had I known that I would be able to increase my salary that much in such a short time, I might not have enrolled in law school.

The reality, however, is that if salaries had not been where they were when I enrolled, I never would have enrolled either. I had a good career with promising prospects. It has turned out to be a better career with brighter prospects than I realized. I've done well in law school outranking a significant number of full-time students at what many of you would consider a TTT school. I had a summer position with a top firm in top market and didn't like the people I met there. I went through recruiting again last fall and ended up with a position at an even more highly ranked firm that has not engaged in layoffs, deferred start dates, cut salaries, or any other "current unpleasantness."

I work hard and always have. I had a successful company at one point with several million in annual revenue when I stepped aside as president. I have numerous contacts in senior positions in the Fortune 100 and am well positioned to help add to a firm's bottom line. If not right away, then in the near future.

The reality is that I'm the type of candidate a law firm would never have an opportunity to recruit if they didn't look at the cost of law school as part of their salary calculus. The two are not divorced from each other. The ABA has ensured that it is almost impossible to practice law without attending an accredited law school.

If law firms are interested in attracting young lawyers who were bright enough to do a cost/benefit analysis of law school, then they must recognize that they control the benefit side of that analysis. Otherwise, the quality of law school student will continue to erode as will the quality of law firm hires.

Not really, 253. Michigan is still a better deal. $240k in debt works out to something like $1800/mo in loans, whereas $90k is more like $700/mo. My numbers might be a little off, but you get the gist. Go Blue!

183/254 - See 227. It's not your fault either.

256 - I'm not asking for anyone's sympathy. Unless one of us was in Congress or slapping AAA ratings on securitized bad loans, I doubt it's any of our faults. The current "crisis" has nothing to do with the validity of my comment.

My comment relates to the long-term relationship between associate pay and law school costs.

It's also worth nothing that starting salaries were $145k when I enrolled. So, even the current cuts wouldn't have changed my decision. The current layoffs might have though. - 183/254

All these people saying that you need to kow tow to the rainmakers by making sure they get paid before associates are absolutely right, but they miss the point of where the anger is coming from when it comes to partner compensation.

No one cares that the rainmakers get paid, but what people can't stand is service partners and other of-counsel who can barely bring in enough business to satisfy their own draws.

What associates want is for firms to start deequitizing partners who are a much bigger drain on the firm than asssociates are.

Bottom line - if clients don't come to the firm because of you personally, you don't deserve to be a partner and your pay should reflect this. No one is asking rainmakers to fall on their sword, just use that sword to cut off the deadweight that are the rest of the partners.

Fair point, 259. Some firms have done that, though not enough to satisfy the proletariat blood lust. Shine those pitchforks, law students, it's time to take down BigLaw and create a workers' paradise.

253 -- Cost of living expenses are minimal at Michigan, especially in comparison to the Boston/Cambridge area, and UM's living budget is adeqaute to generous, depending on your spending habits.

(Of course, this is assuming she doesn't have any massive credit card debt or car payments, etc. -- Her undergrad loans can be deferred because she'll be in school, but Michigan won't adjust your budget for those things. They will adjust, however, for health insurance, etc., if you can prove you spend more than budgeted).

Point being: she'll still be way ahead by going to Michigan -- at least 2/3 ahead (90/240 = 37.5%).

-250

Everybody go look at 252

No, look at it...252

Is it because I've been up since 4 am and at work since 5:15 am that the first paragraph makes no sense at all?

"A HLS degree is slightly better than a Michigan (or Stanford, or Chicago, or Columbia) law degree, but a HLS degree is only minutely better (I'm saying this as a Michigan grad, but it's true). "

If this poster is an example of a Michigan grad please for the love of god go anywhere else. Shit go to MSU.

Or maybe I'm wrong...

240:

I'll sum it up for your friend.

Free = good

People, salaries 10 years ago were much MUCH less than they are now. A mid-level at a big firm made $130K, for example. Every time they raised salaries it came with strings - higher hours expectations, even more of a feeling of "we own you". Lo and behold, it's biting all of us in the butts, if firms can't afford to keep people in this economy. So salary reductions could be the start of making firms come back down to earth in terms of both lifestyle expectations and salaries. Why should lawyers have to be paid as, and live like, investment bankers? Why can't we be happier and saner and more balanced? If lower salaries keep more attorneys employed and working saner hours, bring 'em on.

That said, I can't believe that law firms are that hard up for cash and hurting that much that cutting associates or reducing their salaries is going to make or break the firms - isn't much of this about protecting the partners' annual profits per partner? And if so, why can't PPP come back down to earth too, in this economy? Do partners have to take home $1M/year each, or might $600K/year work for them, if that means not having mass layoffs.

264, do associates have to take home $160k/year each, or might $100k/year work for them, if that means not having staff layoffs.

165/182

You know you're retarded, right? I can change Reaganomics to "Take GPA points from the lowest quartile and give it to the kids on law review", and that would be a fucking terrible plan too.

If you don't understand economics then just keep your mouth shut. But don't dumb down Obama's plan to something that proves your point without any reflection on real life.

How about this instead: "A HLS degree is ever so slightly better than a Michigan (or Stanford, or Chicago, or Columbia) law degree, but not enough to matter in the most likely real-world situations (I'm saying this as a Michigan grad, but it's true). "

242 - Actually, the sun doesn't rise at all, from the east or otherwise. It is an optical illusion created by the rotation of the earth.

Dumbass.

259-You fail to take an important fact in to consideration. Rainmakers may initially bring a client to a firm, but to keep that client at the firm, the rainmaker may need a "service partner" to do work in another area of expertise so that the client doesn't take that portion of their business to another firm, and thereby run the risk of all the business being transferred to another firm. Service partners have their plac ein a firm, too. It is not for firms to have partners bring clients in, they have to be able to keep them. A nationally recongnized partner in a specialty area is important to a firm even if s/he is a service partner and no, I am not a service partner. However, I have been around long enought o see the big picture.

264--If a firm actively cuts partner income, those with a portable book of business will jump ship to a firm that isn't cutting profits. Firms have to keep partner comp high so that they don't lose the very individuals that they need to survive. That is the very simplistic explanation of why associate salaries can and will be reduced, but partner salaries won't be.

259--It is too simplistic to say that only rainmakers deserve their comp. The firm has to be able to keep the clients once they get them. In many instances, it is of counsel and service partners who perform the functions necessary to keep the clients.

Petty and irrelevant point, 268. Nevertheless, I hope you practice in my jurisdiction. Your inability to grasp others' arguments and your poor counterarguments will make millions for me and my clients when I trounce you in court. Or are you planning on transactional practice? That would be a shame.

In addition to providing legal services for the equivalent of $20-25 an hour, I forgot to mention that I have to pay only slightly more for young Indian and Filipino boys to service me sexually.

If only big law firms approached this problem in the manner of Paul Levy, CEO & President of Beth Isreal Deaconess Medical Center:

http://www.boston.com/news/local/massachusetts/articles/2009/03/12/a_head_with_a_heart/

274--It seem that associates want partners to give up $$$ for them, but from all the staff bashing that goes on here, it is doubtful that associates are willing to take a cut for staff.

252 - "If she's in the third quartile or the bottom 25%, she'd be slightly better off going to Harvard but she wouldn't be guaranteed to get a job that would let her easily pay off her student loans."

-

You're underestimating this. It's not "slightly."

If she's in the bottom quarter of Michigan, she's going to have a problem getting a biglaw job period (especially in this economy) while she'll still have a decent shot at it at Harvard, Plus Harvard has a better cushion in their student loan repayment program if you're making below a certain amount (even if you aren't doing public interest).

She'll get a much better safety net and, at the top quarter, she'll have a much better chance clerking.

Go to Harvard.

Hey, you lawyers are supposed to be so smart, right? That guy, John Yoo, figured out a way around the Constitution so that I could lock away American citizens indefinitely without charges or a trial, torture high value detainees, listen in on all of your telephone calls, and read all your emails. How come you people couldn’t figure out a way so that I could’ve served a third term? Cheney couldn’t help me, that dumbass flunked out of Yale Law School. Rove flunked the LSATs. Harriet and Alberto were too much in lust with each other to care. Don't you people remember how well the financial sector was doing when I was President? Don't you remember that people lined up every day outside of auto showrooms to buy cars made by the Big 3? Don't you remember how the economy boomed when I turned that $500 billion surplus into a $1 trillion deficit? That old guy at 140, 153, 177, and 191has got it right, things were so much better when I was President.

273: fail. Misappropriation of schtick is weak.

Hey 266, 165/182 here - Stop drinking the Obama kool-aid okay buddy. go ahead and keep believeng the liberal talking points - unfortunately you're probably too ignorant to do your own research, so let me spell it out for you:

Athough the rich got richer under Regan, so did everyone else. Real median family income (in 1994 dollars) rose from $36,825 when he took office to $40,890 by the time he left. Furthermore, the average real income of those in the bottom quintile of households rose from $7,954 to $8,391, and the income of those in the second lowest quintile rose from $18,856 to $20,797. The third and fourth quintiles also saw significant increases.

Nice try though - thanks for playing...

264 - I love the idea of EVERYONE taking a pay cut at firms to avoid layoffs and would hope that everyone from partners to associates at even a few firms would be willing to do that. What an idea, and how contrary to the greed culture at law firms ...

As for the post about having to keep partner take the same and reduce associates, so the partners with books of business won't jump ship to places where they can keep their gazillion per year take, are ALL partners just about themselves that way? I would hope not, it's contrary to the way things are going, I think all firms' profits are going to get cut, other than the major bankruptcy powerhouses, whether firms want to admit it or not.

There is an easy way for people to tell the quality of a law firm:

Truely top firms will move to $190K (W&C in DC is already at $180K). Average firms will stay at $160K. TTT firms will drop below $160K.

I've practiced law 20 years now: 10 in AmLaw 100 firms, 10 in-house at a Fortune 50 company.

IMHO, there's no way that the vast majority of firms will maintain the inflated salaries for first-year associates right out of law school, or 2d years out of clerkships.

Why? Clients. With the exception of bet-the-company litigation, true megadeals, and certain esoterica, sophisticated clients -- the ones that foot the bill for these salaries -- just won't pay for first years or second years at the rates dictated by today's salaries. Nor will they continue to pay the inflated rates of senior lawyers that subsidize those salaries today.

Larval attorneys at big law firms can't do much that's billable anyway, and what they can do (unsophisticated research, assembling forms, document review) now can be done more efficiently by more experienced lawyers using today's technology.

Clients are also figuring out that having a junior associate spend 60 hrs writing a motion to dismiss, only to have a senior lawyer spend 10-15 hrs more re-writing it, is not as efficient as having the senior lawyer spend 20-25 hrs to write it from scratch.

BigLaw partners, faced with cutting their precious PPP, will continue to see the light and repudiate the traditional leveraged pyramid scheme in order to cut costs.

My advice to law students is to use this instability in the BigLaw fantasy-salary world as an excuse to go out and get some real experience as an assistant prosecutor or city solicitor. The current market turmoil should provide sufficient "cover" for those of you fearful that people might think you couldn't land a BigLaw job.

Then, if you still crave the BigLaw experience, come in as a fourth-year associate. You'll actually be worth what you're paid, which is better for clients, for firms and, ultimately, for you.

Your mileage may vary (but I've put on a lot of miles...)

282 - How do you propose that junior attorneys will become skilled senior attorneys if they never get to do any substantive work? You do realize your logic makes no sense, right?

283, your reading comprehension needs help:
"My advice to law students is to use this instability in the BigLaw fantasy-salary world as an excuse to go out and get some real experience as an assistant prosecutor or city solicitor."

-- not 282