1 -

Congrats

-2 or 3. Or 4.

SECOND

Idiot: firms have already been cutting the salaries of mid-levels through salary freezes. Cutting first year salary is the logical extension, so that two class years don't end up making the same money.

I am ensconced in the prestige of Skadden. The rest of you are all idiots.

First to say Greenbert TTTraurig

How will they ever be able to recruit median Seton Hall students again?

So is GT, which did not match 160k in many of its secondary markets, also cutting these already-below-160k salaries as well?

Oh, and 3Ls and SAs should sue, promissory estoppel, &c...

Cutting salary rather than firing people! It's the end of the world.

What 4 said: At the firms that have cut first year salaries, the salaries for the rest of the class years is the same as the salary freeze. Essentially the pay cuts made it so that class of 2007 and class of 2008 are not making the same amount of money anymore and to avoid the situation in the fall where 3 class years will make $160,000.

It's about time. Paying $160K to ignorant kids just out of law school is insanity.

Who else will jump on the bandwagon?

Good for them. This will become more and more common. DPW is next.

11 -- thank you for trotting out that ubiquitous flame. Are you sure you also don't want to add that the incoming 1st years should SUE???

HAVE THEY CONSIDERED PROMISSORY ESTOPPEL????

Kirkland will follow suit within days. You heard it here first.

Venable announced this a week ago.

13 - Are you sure you're talking about 11?

Kirkland would never follow anything Greenber Traurig does.

Quick Idea for a poll:

It seems inevitable that law firms will begin to cut incoming 1st year's salaries. However, there are only a few "market setting" firms and cutting salaries carries a certain stench that raising salaries does not.

So my question: what vault firm ranking range will start the mass movement to lower salaries?

Based on my intuition, it won't be a V10 firm, as they like to hold onto their prestige; a firm beyond V60 probably doesn't have enough sway. I would say V20-V39 NY firm sets the market. I am curious as to your thoughts -- perhaps we can break this down into 10 firm segments.

16 -- are you sure you're talking about 13???

OF COURSE I WAS TALKING ABOUT 11. Everyone remain calm, the situation is under control. The SITUATION IS UNDER CONTROL!

-13????

There are real V10s (the V10 minus Weil, Latham and Skadden) and then there are fake V10s (Weil, Latham and Skadden). The fake ones could very well make salary cuts as they don't really have much prestige to preserve.

16:

No, I am talking about 11. You just didn't understand me because I forgot to make any sense. Man this law school thing is hard!!

-13

Did GT freeze salaries too?

People who call salary freezes "salary cuts" are the one who are idiots. My take-home pay did not go down when my salary was frozen. Therefore, my salary has not been cut. It's actually pretty simple math. You are trying to say that because I didn't get a raise, my salary has been cut? GT just proved what the difference is between a salary cut and a salary freeze.

Good firms will stay at 160.

As a 2009 law grad, I don't have a problem with salary cuts. I DO have problem with things like being denied interest rate deductions on my taxes because I earn over a certain amount of gross income. Making 145 or 160k does NOT make me wealthy when I have 200k in loans.

I just got my Cadwalader bonus.

And so it begins

25 here - meant interest payment deductions.

'Traurig' means 'sad' in German. Discuss amongst yourselves.

If a firm didn't freeze salaries back in Dec/Jan, are they less likely to lower salaries for incoming associates? I suppose they could freeze them Dec '09 or Jan '10.

Wouldn't seem very fair to only cut salaries for incoming associates. I suppose we are easy targets.

Salary Cuts > Layoffs > 3L Rescissions > 3L Delays > Summer Program Cuts

V&E or Locke Lord Austin?

or maybe 5 firm segments and I am going on record (blind) with V25-29.

How do I know when to say when?

Skadden > LaTTTham

Skadden offered associates a year off with pay. LaTTTham massacred its associates, ESPECIALLY its first years.

Shame on you LaTTTham.

2/27/09. NEVER FORGET

The problem isn't the fact that New York went to 160, at 160 in New York City you are still pretty poor. The problem is the rest of the country went to 160k. Unbelievable. Atlanta at 160 blows my mind. Dallas and Houston, too.

I don't think they should lower associates in New York, but firms should absolutely lower everyone else. If housing options continue to drop, then drop salaries in New York, but the first years now have gotten into leases with the expectation of making 160k.

GT is a firm that traditionally never paid market rates at any of its non-New York locations. Indeed, the DC office is so anti-associate that it would not be a surprise for that branch to cut salaries significantly and return to pre-2004 rates.

36 - I guess it's a good thing Atlanta never went to $160k then, huh?

Loser firm anyway. Never been seriously considered by any real clients.

The trouble with NYC is that you can't find a wife larger than 1000 sq ft whereas in Houston, 3500 sq ft wives are everywhere.

25 -

You should be voting conservative in the 2010 mid-terms.

Also, if you voted for Obama, you can't complain about taxes.

35 = racist

38 = snarkaluppagus

Did the FL offices cut salaries?

36 = moron

Loser firm anyway. Never been seriously considered by any real clients.

36 - you idiot, pay isn't based solely on the cost of housing. No one said that if you live in New York, you will be entitled to somewhat equivalent housing you would get in another city. If $2000/month in NYC gets you a closet, but in Atlanta the same amount is a mortgage for a 4000 square foot house, tough shit. You choose to live in NYC, you take the NYC housing market. You are not entitled to $160K.

Didn't GT also turn its bar stipend into a bar loan that has to be paid back? Deferral + no extra stipend + taking an already existing stipend and making it a loan = shitty! But I guess it beats having your offer yanked.

Loser firm anyway. Never been seriously considered by any real clients.

Greenberg is the latest firm to realize that the 2009 and 2010 law school classes are two of the weakest this country has seen in decades. GT is just trying to minimize the damage that the '09s can have on their financial statements and prestige. One would expect that '10s are next.

36 - cost of living between NY and LA is pretty similar. The issue is with Manhattan. Check out www.city-data.com.

2008 cost of living index in Los Angeles: 174.6 (very high, U.S. average is 100)

2008 cost of living index in New York: 177.1 (very high, U.S. average is 100)

Tired of getting screwed in NY and whining you don't get paid more? Move to Queens (the San Fernando Valley of NYC). LA folks commute to their Century City firms, you can too!

Same could be said about West LA though.

Idiots who say that salary cuts save jobs are just that - idiots. Look at Latham - no matter how much they save on salaries and toilet paper, they are still going to go through their third round of layoffs soon and the savings will not go to remaining associates (if any).

36 is an idiot. 25 is a whiny idiot.

Just thinking out loud here -- but if someone has already accepted a position as a Summer Associate at GT, might they be able to bring suit against GT on some sort of reliance or promissory estoppel (Section 90 of the Restatement) theory? For example, if I have already spent some of my projected income, might I be able to sue for the difference?

53,

Even if this was theoretically possible (which it is not), it would be a terrible idea because you'd alienate the firm/never get an offer at BigLaw again.

Agree with 46. You are the fools who chose to live in NYC. If you can't live there comfortably on your 160K (or 145k) there, then move or find a way to live cheaper...

Either way you should realize that you make more than virtually everyone else you interact with on a daily basis on the streets of NYC, get the F*&% over yourself, and stop whining...

53 -- interesting question. I'm a Contracts Professor at a T1 school and I might use that in my exam this semester.

41 - I am, and I didn't.

- 25

53 - In first contracts - maybe. In the real world, uh, no.

25, if you have 200k in student loans, maybe you shouldn't be adding on a mortgage for the interest deductions.

make that first year contracts

What about the stealth layoffs that have been going on at GT for months? Why is there no mention of these on ATL (especially the layoffs in the Florida offices)? GT must have top notch PR professionals.

53,

Do you think you 'reasonably relied' on getting absurd compensation in a downturn where salaries are being frozen and hundreds of thousands laid off? You wouldn't even win in the Western District of NY.

- NY to 190K!

55, you should realize that you make 15x more than anyone else you interact with on the streets of Hotlanta. Salaries should be somewhat commensurate with the cost of living (see COL adjustments for overseas associates).

59,
25 here. I'm talking about student loan interest payment deductions.

53 - I may only be 9 years old but even I know that you can't sue. And, if you're dumb enough to spend the money you haven't yet earned, especially in the midst of a global economic meltdown, you deserve to starve or worse, become a hippie.

56 - you're probably 53 in disguise or worse, a hippie.

I hate hippies. I hate you guys.

49 -

??

Getting into lawschool is more competitive every year.

I'm all for law firms rethinking the business model, but I don't think any part of process involves discussing how some classes are weaker than others. That's just ridiculous.

Wish I had been offered a salary cut.

-Former Biglaw first-year who was give a $150k/yr salary cut.

25, and those were never deductible; you knew they weren't deductible when you took them on, and no powerful pol of either party has ever seriously entertained the idea of making them deductible, so what's your point exactly? That you shouldn't have taken on the debt to go to law school?

59,

25 here (the above person was not me). I absolutely was not talking about student loans.

63 - 55 here. Actually, I am one of the fools I referred to in my post. Since I live there, I can speak directly to what a foolish choice it was.
I also have the humility and good sense not to bitch about making vastly more than most Americans (who are of course rich by world standards).

70, why must you resort to such racist language?

68,
the real 25 here.
http://www.irs.gov/taxtopics/tc456.html

69 - you do an INCREDIBLE impression of me. Uncanny, really!

If GT were a sinking ship, it would be called ship "Peerless." I am flummoxed by GT's lack of tact and sincerity. Sure cutting salaries is a step in the right direction but 10% is not enough. Had GT cut salaries by 33% I would be singing their praises, however, GT's actions are to be expected from a non-peer firm that is trying to look good. I am also on record to state that deferral dates are illusory and are at best premised on the false hope that the economy will somehow rebound by 1st quarter 2010. Folks, the economy won't rebound until 2015 at the earliest. Do not be fooled by the bounce in March in the Dow Jones. That performance was based on the government buying toxic bonds and stocks that articially sparked a modest increase on the index. Mark my words, those that defer will have a job for a week and then be terminated. If you are currently a 1-3 year associate or a law student, you will be competing with attorneys in India and the Philippines to do grunt doc review and due dilligence assignments. You might as well hang up a shingle and leave the business of practicing real law to the pros.

68/72 is an imposter. I am the real 25.

68/72 -- please stop pretending you are me.

71, 70 here. Racist language? Either I'm too dense to get the joke or too uniformed and un-PC to realize I said something racist. In either case, my apologies...

I heard there will not be salary cuts for the women.

I can't tell if PE is annoying flame or someone trying to serious but doing such a bad job that the result is the same as an annoying flame. Either way, he sucks

66 -

If law school admission is getting more competitive every year, it's only because more and more hacks are applying and they are muddying the waters for admissions committees.

Firms have taken a hard look at applicant pools for their incoming 2009 associate classes and they realize that they are not getting value for their money any more. This probably started with a weak summer experience in 2008 for a lot of (then) 2Ls who demonstrated a lack of ability. You'll note that a lot of the downward spiral in the market began shortly after that summer program ended. Firms started asking themselves "my God, what have we done?"

The ripple effect has been large; more and more firms realize that the commitments they have made to the weak '09 class are crippling them. This started a run of layoffs (have to save the money from somewhere) and deferments of start dates.

The also-shaky 2010 class will ultimately have to compete with the 2009 class to start work (nobody really believes '09s are going to start in January '10, except for maybe the truly select few of '09s who are actually quality, enough to meet the '02-'07 quality parameters). This will basically double the talent pool by jamming two years into one, and it will allow the firms to cull all of the chaff that is holding them back.

Look for a major recovery in the legal market once this occurs.

-49

How much did they cut the salaries by? 10%?

I bet 73 is Elie.

God, I hate living in NYC.

75 - quit being such a racist asshole.

Yeah, seriously, 75. What an arrogant racist dick you are.

If Latham, which reluctantly raised salaries during the boom, cuts salaries will an irell, munger, or quinn follow?

I heard they were cutting Pillsbury incoming salaries too.

20 - Kirkland is not terribly prestigious. They'll take anyone demonstrably masochistic enough to work there as a lateral.

I work at Kirkland. And I resent that comment, 86. I am not demonstrably masochistic, but am a complete tool.

87 - you must have gotten the job out of law school. You'll leave in a few years and let the laterals work at that place.

OMM and GDC are doing stealth first year cuts too.

49/79 -- and just how do you think the firms rate the "quality" of their summer associate classes (especially in advance)? Is it really possible for a group of 100 summers to be "weaker" than another at proofreading for 4 hours a day then being taken to a 4-hour lunch?

37 - what's your source?

91, 37 here. My source is my ass. I asked it this morning.

1st - 3rd year associates,

Read this carefully:

http://www.philly.com/philly/business/homepage/20090413_Leveraging_the_law.html

If I was still in law school, I would avoid big law at all costs. Start somewhere where you can learn some skills and lateral to Kirkland later.

93 must not have been able to score a biglaw job. loser.

The story fails to mention that not only will GT not be offering a deferral stipend, they have revoked the $8K bar stipend offered before the downturn.

To everyone who has ever written "TTT" in your post:

You are complete idiots.

93

so turn down 160K (or 145K) a year just for the unsubstantiated chance of better training?

So what do I do? Quit? Go find another job?

Correction 96- you are compleTTTe idioTTTs.

I am not fully sure it is legal to cut the salaries of summers.
Associate are clearly employed at will and therefore since the employer can fire at will it, with a reasonable notice, can also change the terms of employment at will.
Summers might be in a different category. They are not employed at will but for a predetermined time period (12 weeks? 10 week? or whatever) and therefore might not be fired at will and therefore if their offer indicates that their salary is X (3200$ a week) and they accepted - it is a contract and I am not sure this move is not a breach (of course you have to see the exact offer to know that better).
Needless to say that I was a summer years ago and have no personal interest in this decision and I am not sure that I would sue the firm in this economy.

Well, I guess some disclosure is better than none. GT has laid off probably 100 or more associates since early November. GT Miami has laid off about 13-15 associates, which represents about 15-18 percent of the associates in the Miami office. If you extrapolate to other offices, that would mean at least 100 associates.

GT is very poorly run and mistreats its employees at all levels. They told their associates for years that they paid them less because they don't lay them off, even in a bad economy. Then when they lay off some associates they give them just 45 days notice. Add in consistent associate bashing on national conference calls and you've got the making of fearful associates with low morale and disgruntled former employees.

GT leadership ought to be ashamed of itself for the way it has conducted itself.

ATL. BEFORE YOU CREATED A REPUTATIONAL COST, NOW YOU CREATE AN EXCUSE FOR THE PARTNERS. THANKS.

GT has conducted stealth layoffs in many offices over the past year. At the end of March, numerous partners and of counsel all suddenly started sending firmwide goodbye emails as well...so they have probably forced out numerous partners, too.

Also, this salary reduction for first years should not be surprising. GT got rid of lockstep compensation in most offices earlier this year, and used this as an opportunity to reduce the salaries of some associates who did not make their hours in 2008.

How these things have stayed off ATL is anyone's guess, but everyone at GT knows about both the stealth layoffs and the elimination of lockstep, and has for months now.

GT doesn't matter.

I don't think there's client pressure to cut associate pay. There is client pressure to cut costs in general. Salary cuts are being done by the partners bc they're annoyed that when they graduated from law school, a snickers bar only cost a nickel. ATL needs to get back on the job and realize who they represent - associates. Greedy, snot-nosed, entitled associates. Elie sounds like an apologist for the management most of the time.

97

93 here. No one should quit or leave any job in this economy. Period.

But if you lose your job, or you get deferred to Sept. 2010 (or later), think about going to a small firm to build skills.

From the article, it seems like big firms are going to sacrifice training the next generation in order to keep up PPPs today. I spent 9 years at a v20 before starting my own boutique - and I take the training of my associates seriously.

Here is the good thing, Real Estate in NYC is falling apart. It will be down 40%-50% by say 2011 or 2012.

My guess is most young lawyers will actually come out ahead, even if they take a hair cut or don't get pay raises over the next couple years. Think about it this way, if your salary gets cut 15-20% but your expenses are down 40-50% you win.

The only problem with a deflationary cycle like this is paying down debt if you took out big loans. However, when it's all said and done, my bet is that you come ahead in buying power, even if your top-line doesn't look as big.

97, 105

Fair enough.

the next poster is a child predator. be forewarned.

the next poster is a child predator. be forewarned.

108 and 109 EPIC FAIL!!! idiot.

Considering the salary freezes/cuts, and that they didn't pay market lockstep anyway, it is not surprising they are lowering first year salaries. It would be unfair for first and second years to make the same salary. As far as I can tell, it is not in any means a harbinger for doom and gloom scenarios. The firm isn't too keen on junior associates to begin with.

111 - it would be unfair for '08 first years to make 160k and '09 first years to make 145k. Fairness has nothing to do with anything.

wow, I'm glad I chose my V10, but I feel bad for all the young law students I've told over the years that there's essentially no difference between firms and that you should pick the environment where you'll become the best lawyer. To any of you that actually listened to me, I'm sorry.

From now on my advice will be: pick the highest Vault ranking you get an offer from.

113 - if V10 firms really wanted to separate themselves from others, they would raise salaries to 190k.

NYC to 190!!

My friends,

This act, like the cross joint from Pineapple Express, represents the future. You'll see layoffs, salary cuts and increased workloads converge, creating a trifecta of misery the likes of which have not been seen in BigLaw before. This is what our grandkids are going to be doing. It's the future, man...the future.

89 --- What's your source on this info.?

113, sadly I feel this is true. I'm very happy with my V10. Like the people. As a litigation associate am still billing solid hours, and we've had no deferrals, no layoffs, or salary cuts.

But Latham and Fried Frank were my other top choices, and they were very close. I'm glad I didn't end up at either, but never would've thought it would've made any difference in my career trajectory let alone actually keeping my job.

The salary cuts will happen at all firms.

SkaTTTen first f*cks up and pays way above market boni, watches its business dry up, and now has to pay idiots 80K to go to burma to milk the sperm from yaks for a year...

I am sure the philanthropic partners at skaTTTen are thrilled with firm management for refusing to do the right thing: thin the herd of the brooklyn scum.

25:

You voted for Obama right?

112, I think it would be unfair for second years and first years to make the same 160k salary and to only be making 10-15k less than more experienced third years. It doesn't make sense to pay people with no experience that much money, the same as people who have put in their time. I'm a midlevel and my first year salary offer was 125k, as was everyone's at that time -- and it wasn't that long ago. So pretty much no one's crying for 25 year olds and their 160k salaries. 160k for first years is unsustainable at most firms outside the V20.

What don't people understand about salaries?

Firms don't pay those salaries because the entire 1st year pool is worth it.

They pay it because SOME of the pool of talent is worth it. The idea of the BigLaw system is to bring in plenty of POTENTIAL talent, and let it sort itself out.

Within the first 24 months half of an incoming class will have distinguished itself and half will have proven to be useless.

The reason firms pay huge salaries is because if they don't, the half of the class that is worthwhile future partner material will happily lateral elsewhere.

Or at least they would when the economy was up and such things were possible.

Firms who break this mold by lowering salaries are begging to lose out when the economy turns. I have said this before, and will say it again. The firms who engage in massive layoffs but do not defer start dates, freeze or cut salaries, or otherwise compromise on the benefits of the people they keep, will do better than firms that keep more people but make across-the-board cuts.

Laugh if you want, but when the economy REALLY turns (even if that isn't until 2011 or 2012) and the next boom cycle begins, there is going to be a major race of NY to 190 and beyond.

Firms will claw all over each other to fill their empty office space not with just any lawyers, but with those who survived the great culling of 2008-2009. Demand for experienced midlevels who performed well through the recession will be through the roof. V20 midlevels will be on the receiving end of "Godfather" offers from other firms trying to break into the V20.

Firms need to remember that associates care about only two things: (1) how much they make now, and (2) how much they stand to make in the future. Concerns about "quality of work" or "quality of life" only come up when an associate either plans to get out of BigLaw anyway, or when the amounts of 1 & 2 aren't high enough.

BigLaw management -- do yourself a favor. Ignore the clueless cries of law students, staff, and wannabees on blogs like this. Performance-based layoffs, en masse if necessary, are the way to go. Raise your standards, and cut everything below them. Then reward everyone that is left with massive bonuses, top of market pay, and plenty of the "good old days" benefits they don't expect anymore.

Investment banks and financial companies have tried the "salary freeze" and other ideas already and have failed. The top talent will leave and go elsewhere, and the brain drain will prevent the recovery you were hoping for by saving money short-term.

The fundamentals of business have not changed! Cream still rises. Talent will always be rewarded, if not by you then by someone else.

The ship be sinking...

Yeah -- why hasn't ATL covered the layoffs at Greenberg?

113, Latham is a V10 firm. Shearman & Sterling and Wilson Sonsini used to be V10 firms.
Williams & Connolly is not a V10 firm. Munger Tolles Olson is not a V10 firm.

Obviously, law students should pick firms based on Vault. One should always make career decisions based on arbitrary cutoffs in a random Internet survey (with false 0.001 precision) of mostly uninformed junior associates based in NYC.

i hear that kinky spalding is asking all lesbian partners to no longer expense their sex toys to the firm - in an apparent cost cutting move

i hear that kinky spalding is asking all lesbian partners to no longer expense their sex toys to the firm - in an apparent cost cutting move

113, 124 and every other troll out there. You should pick where you want to live first before you pick what firm you want to work for. From there, think about what practice are you want to work in. From there, look to the Vault PARTNER Rankings (what Partners say about other firms, not idiot associates) for the highest regarded of the fhe firms, the PPP and RPL of the firms, and finally look at Chambers and PArtners and Legal 500 and see what they say about the firms you are looking at. That should give you a good idea of the firms you are looking at. Then pray you get an interview at those places, and when you do choose the place that gives you an offer and that you think you had the best interview at. And that is how you should go about choosing law firms.
Clearly some firms (Skadden, Cravath, S&C) are going to be a pretty safe bet no matter what your preferences are... but there is huge discrepancy among firms when it comes to practice area.

127 - good advice. People need to stop the vault-centric nonsense, particularly when looking for markets outside of NYC.

127, sarcasm detection must not be your strong suit.

--124

starting Sept-Jan? That would be interesting news to the person I know whose GT start date has been pushed to March 15.

GT is such a crap firm.

what's up with GT shipping half their litigation department to White Plains?