Survival of the firstest

Holy crap. I hope the V5 remains safe from this.

As I understand it, V&E (admittedly outside the T-50) has cut salaries of some associates (and some of those quite substantially). This hasn't made much noise because of the confidentiality agreements associates are signing regarding the cuts ("sign or else"). Ouch.

Elie, stop promoting the idea that EVERYONE is going to be doing salary cuts. By you constantly speculating that this is going to happen, makes it more likely to be accepted because the ideas have been continuously floated in the public forum and associates have been hit over the head that this is the reality. Well it doesn't have to be.

Congrats Ellie, you are single-handedly bringing down the legal industry with ur fat tubby fingers

Its official, I've gone to law school for nothing! Hope it doesn't drop below $140k

Its all Elie's fault for instigating this!!!!

ELIE IS THE TRUE CULPRIT

Mayer Brown is a type of off-colour humour dealing with defecation, urination, flatulence, vomiting and other bodily functions. This genre also sees substantial crossover with sexual humour, such as penis jokes.

Finally! Kudos to B&M for taking the visionary leap in deconstructuing our traditional business model. This is the component of my "hybrid tough love" package that has been resisted by peer firms. A 10-15% salary cut is not enough. I would advocate a 25% across the board salary reduction among the associates and staff coupled with some more rounds of layoffs. Austere times call for lean operations. B&M Management should be commended for this action, however, instead of taking the gavel to the dollar sign, I would recommend a sledgehammer next time.

Elie needs to STFU

I bet I know which sinking ship v10 will be the first to do this. psst. it's name may or may not start with an L.

Mr. Mystal, thank you for reporting the wonderful news. Keep up the good work. Take comfort in knowing that you made this old pioneer smile today.

4 = dead wrong. Refer to post of 2 weeks ago in which ATL discussed MP Joe Dilg's State of the Firm address. No salary cuts have occurred. Stop hating just because you are working for Baker.

I wonder if the B&M cuts are for those who are under budget by a certain amount, say 100 hours after the first quarter. If firms are going to start doing this, it seems like they would go after people who are severely under budget, and attempt to spin it by saying that the person, extrapolating the 1st quarter hours out for the whole year, is expected to come in 200-300 hours under budget by year end, thus the salary cut.

If firms cut salaries of people who are above budget, they kill productivity, since those people will stop staying until midnight for a reduced salary.

Dear Elie:

BigLaw partner here. Thanks for the post. My partners and I just finished a meeting dedicated to devising alternatives for lowering costs. It wasn't until we read your post that we considered cutting associate salaries. Now that we have cover from a blog, we can go ahead and make some critical decisions about our billion-dollar business. We would have never considered pay cuts if we hadn't read about it on ATL.

( 5 -- you are one seriously pathetic tool).

To those affected: Are they masking this by calling it "temporary", or are they saying that your salary is going to be lower even as you become a senior assoc?

Seriously, stop reporting about the drastic measures taken by these TTT law firms. It is giving the decent law firms ideas and some amo.

Omg, pay based on how much you work and what work you do. That's crazy talk.
It's a good thing such a revolutionary concept of compensation won't seep into the non-legal economy at large.

What's next? Not recruiting two years in advance? Actually firing a percentage of bottom performers each year?
The world shudders.

Partner Emeritus -- the revelation earlier today that "your" picture is actually character actor Donald Moffatt destroys any scintilla of credibility you had left. You had a nice run. Now waive the white flag (you can pretend to be going to start a new legal services business in India) and go away.

--Is this another nail in the lockstep coffin?

No. The fact that a failing firm has decided to cut salaries is not indicative of a general drop in salaries.

It won't kill productivity at all, because everyone is afraid of losing their jobs. They'll work harder for less, or they'll be gone right after the under performers get let go.

Partner Emeritus-
You are ELIE. There! I said it!

LOL @ anyone (e.g., 17) who thinks that this post is giving other firms any kind of "idea." You need to wake up fast. Salary cuts are the basic option considered by businesses in down times. It's not as if Baker just found out a new way to handle the crisis.

I think that US law firms should follow the Danish model and make the first 3 associate years an apprenticeship. No salary, but incidental expenses are paid by the firm (bar membership fees ,etc. but not health insurance, retirement contributions, etc.). Those that are "accepted" by the firm then make an equity contribution at the beginning of year 4 and begin to draw a nominal advance against their equity participations. Equity participations increase over a period of years based on performance. There is much more to it, but that is the essence.

Game over, man! Game over!

Blaming Elie is not helpful, although his grammar and usage does bring us all down. The model is screwed, guys. Why is that so difficult to understand? V5 is not safe, V100 is not safe, nobody is safe. Salaries will come down (to c.$145k for NY and large markets) for Big Law. The reality is that it is the CLIENTS who are leading the charge here: they see a firm paying a first year idiot $160k plus a bonus, and realize that such idiocy bears on their bottom line. That's why this is a certainty: the law is a service industry that has to cater to the client.

Better quit your bitching and try to refinance your 3 Series.

Mmmmmmm..... Muffuletta.

-Johnny Chimpo

I would be all for this so long as the top performers got adequatly rewarded, and everyone else was punished. I actually generate my own business, and I don't get to keep any of it. If i'm told to take a paycut, I take my book with me somewhere else ... or on my own. Let's make it all performance based, both up and down. Including partners.

A reliable source stated that Baker cut some associate salaries (transactional) by as much as 30-50%. Above the Law needs to investigate it.

Hahaha. 13 = V&E summer.

No lay off / no salary freezes / no bonus freezes / start date promises aren't worth the paper on which they are written.

--3L hoping to start in Nov / Jan / 2010.....

To the douche who criticized people asking for this info to be kept quiet: Firms often follow pack mentality, particularly in smaller cities (Philadelphia, for example). By posting this on ATL like it's the next coming of Christ, Elie has assured that firms can now quickly and easily bypass antitrust laws and figure out what's going on with competitors' employment matters. Sure, it might be only a matter of time before everyone jumps on the bandwagon, but if you seriously think blogs like ATL aren't culled for otherwise inaccessible information to get the ball rolling more quickly, you are sorely mistaken.

I love the naivete of posters like 20 who think the pain is localized to firms such as Baker that are supposedly failing. Wake up people - EVERY fim is hurting badly right now. Hell, even Weil with its never-ending amount of bankruptcy work is deferring associates and asking them to take a year off.

It's going to get worse before it gets better.

Was this a frozen firm?

I salute the V50.

With my bare ass.

From my V10 perch.

LOLerz

- CLS 2L Stud

BM is aptly named.

Was this a frozen firm?

Kudos to B&M for daring to pay attorneys what they are actually worth in this economy.

25 + 32 are right: this is not "limited" to any "class" of firms. This is industry wide. Buckle your seat belts bitches.

This comment is addressed to post no. 19.

As previously explained, Mr. Moffat is a method actor who was my shadow for 6 weeks in 1989. He was cast to play a role that was loosely based on my character in the move "Regarding Henry," which was released in 1991. I was the original inspiration for the role and Mr. Moffat bears a striking physical resemblance to me. My picture has been circulated in the internet with the byline of Mr. Moffat, however, please compare the below picture of Mr. Moffat to me. And if you can't see the subtle differences, you should obtain an eye seeing canine.

http://gfx.filmweb.pl/p/28/59/2859/84465.1.jpg

Baker & McKenzie Dissolution Watch, Day 1

34 = NYU student pretending to be CLS student

32 is the smartest comment I have read on ATL in a long, long time.

25 - Best comment

25 is the best new gimmick on here. love it.

This is a sign of a failing firm, nothing else. Idiots who repeatedly screech about the broken firm financial model: we are thrilled by how smart you are. But save it for when you become managing partner of a failing firm. No one on this website for associates wants to hear it.

I'm just thinking out loud here, but could there be an antitrust violation when a firm cuts salaries, and then another firm cuts salaries?
What if I can show that partners at those two firms are known to have been in the same rooms together and sometimes talk to each other?
Thanks in advance.

HA! You over paid slouches are going to get what you deserve. Get a real job.

confirmed that some associates were cut 50%

As a mid-level associate at the firm mentioned in this entry, I was less shocked by management's actions than I have been at the facebook-level of discussion in the comment section. There's very few of you who *don't* deserve at least a 25% reduction, if not in pay, then in opinion expression.

41 = UChicago student trolling to make NYU and CLS students look bad

46 -

Try Section 90 of the Sherman Act

This post is addressed to comment no. 46.

You are a nimrod to suggest that an industry wide business decision based on force majeure (i.e., global economic recession) is an antitrust violation. Hang a shingle and stop trying to find an economic scapegoat for your misguided and/or aborted legal career.

B&M has permanently cemented itself as the McDonalds/WalMart of law. They will always be remembered for this (the converse of Gunderson raising to $125K in '99), and they will pay via the inability to recruit talent when the economy turns.

26 - Unless you are talking about the NY model of making most of your profits from overleveraged deals or CDOs, you are wrong; the model is not screwed.

Firms are adjusting their size based on demand that has changed because of the recession, and the lesser firms (like B&M) that thought thay they could hang with the elite firms (and that could during boom times) are now finding out that they can't.

.

31 -- I am the douche to whom you refer. And you're a cute little baby-lawyer who is either painfully naive or mind-bogglingly stupid. Law firms always know what's going on with the competition. People talk to their friends and colleagues. There are widely-read local legal newspapers such as the New York Law Journal or The Recorder. And even in cities with no such press, there are national publications like The American Lawyer and the National Law Journal. Even back before the Internet, law firms moved in lock-step on pay and other issues. Quite frankly, the legal industry is always just one step away from an anti-trust violation. Trust me, Elie Mystal and ATL are NOT moving the market.

agree with 53 - B&M will never be able to attract even middling talent again. this will ultimately lower their profits and prestige, much outweighing the money-saving benefit to the partners now

Attorney = worst job ever. It's totally gay.

24.
Do law school loans fall under 'incidentals'?
Who covers rent/food/healthcare during those three years?
How then would a person with student loans, no income for three years and even minimal expenses have the financial capacity to make an equity contribution in year four?

I can attest that the image is indeed a potrait of my friend and colleague Partner Emeritus. Back when we were boys at the prepatory academy, PE earned the nick name Droops. While I spent my time at football games and local drive-ins with various ladies getting "fresh," Droops spent Friday and Saturday nights quietly masturbating to his mothers sewing periodicals. It was quite sad, and is perhaps the the source of PE's hatred towards younger associates as he is seeking revenge for being ridiculed during his a child and young adult. Oh, PE you are quite a character.

P.S. His mother is a butterface too.

As recent law school graduate, I think it is actually beneficial in the long run to have more accurate information disseminated about the economic state of the profession.

Most firms would rather not publicly admit bad news like salary cuts but do widely publicize positive information. That information imbalance fuels the public image that all or most lawyers are guaranteed lucrative salaries upon graduation. That exaggerated public image in turn fuels an excess supply of new would-be lawyers. That is the situation we are seeing now.

We are now realizing that our profession unfortunately is not immune to the larger economic cycles. As that information is more widely disseminated, it will reduce the excess supply of future lawyers, and improve the long-term prospects for those of us currently in the profession.

Apparently to become a partner emeritus one need not understand comma splices or the proper usage of "however."

As recent law school graduate, I think it is actually beneficial in the long run to have more accurate information disseminated about the economic state of the profession.

Most firms would rather not publicly admit bad news like salary cuts but do widely publicize positive information. That information imbalance fuels the public image that all or most lawyers are guaranteed lucrative salaries upon graduation. That exaggerated public image in turn fuels an excess supply of new would-be lawyers. That is the situation we are seeing now.

We are now realizing that our profession unfortunately is not immune to the larger economic cycles. As that information is more widely disseminated, it will reduce the excess supply of future lawyers, and improve the long-term prospects for those of us currently in the profession.

Agree with 49.

any word on whether incoming first year salaries will be cut??

This surely violates protocols 2,3 and possibly 5 of the Second Geneva Convention!

52 - that would be Restatement (2d) of the Sherman Act, Section 90. Try bluebooking your posts, will you...

just another way to force people out of the door without having to say you laid them off...

I welcome the end of lockstep, as long as there will be raises actually rewarding individual associates who bust their ass when the market turns around. And since they'll surely accept my condition before continuing this route, I'm satisfied. (Not really that stupid).

i have heard of individualized salary cuts accompanying schedule reductions at B&M, but not just straight salary cuts. a schedule reduction which results in a lower salary should be distinguished from a straight salary cut where there is no adjustment in expected billables. someone needs to clarify what is actually going on.

The problem at Baker is that they used their relatively stable operating performance compared to many other firms to attract partners and practice groups that are currently slow in order to try to build up these areas for when they recover. They are now carrying these deadweight groups and are refusing to layoff as much as they should because they just recruited most of the people that are not that busy. Also, it is a lot easier to increase salaries of the associates with the pay cuts once the demand for legal services picks back up than to staff up.

47,
Your biglaw staff position is on the chopping block too, dufus.

49 = ironically hilarious.

45 is absolutely correct, B&M is officially bottom feeder. Good luck at HLS recruiting forever, bozo partners of B&M. You are heretofore banished to TTT, from whence you came. Hurry up and dissolve, losers.

54 - Thanks for owning up to it. The point of my post was that ATL, and other national news forums (as you kindly listed) are only aiding and abetting a process that normally would be difficult to get away with - legally. Your comments are accurate, but a firm's MP can't sit on the hot seat and squeal to the DOJ, "But Steve told me on the links last Sunday!" By putting otherwise confidential information in the public domain, the very purpose of antitrust regulation is abrogated.

46 = dumb as dirt.

There are 4 kinds of "associates get paid too much" people:

1. Biglaw partners: there is a balance of asking "top legal talent" to work all weekend at your whim, with little to no chance of partnership. Drop salaries to what other people with the same education make, ask an associate on Friday to come in on Saturday, and you will be doing the work yourself.

2. In house people: Ok, you hate big bills and are jealous/resentful that associates at your outside counsel make 2x what you do. That delta, however, is protecting you from a[n even greater] flood of attorneys that want your jobs. The only reason I did not go in-house 3 years ago is the $$$ I make here. Force your clients to cut associate pay to anything near what yours is, and you will at least double the competition for your own jobs, putting downward pressure on your salary. Remember, your clients also view you as a cost the'd love to reduce.

3. TTT Lawyers: whatever. You knew the game, should have studied more.

4. Non-lawyers: See econ 101. See also supply and demand.

Since the Dow is down below 7900, Baker & McKenzie is taking prudent measures in response to the recession and the continuing lessening of demand for legal services.

I think 75 is dead on. Correct on all points, and well said.

I wonder how much all these layoffs, cuts, deferrals, etc. will increase the relative talent-pool of lawyers at governmental organizations such as FTC, SEC, Dept. of Justice, etc. vis-a-vis law firms.

Those that were only drawn to BIGLAW by big salary may not have as big of a draw anymore once salaries move closer together.

This isn't a bad thing. Anyone wonder why Jones Day has not laid off anyone, and also has an early start-date? Because they got rid of the lock-step model long ago, and kept associate compensation a case-by-case determination. It works. You get paid for what you do...what a concept.

77 = 75.

McDermott Will & Emery is at the forefront for cheap firms. I'm just guessing, but I wouldn't be surprised to see McDermott follow BM's lead.

@ 26 ("The reality is that it is the CLIENTS who are leading the charge here: they see a firm paying a first year idiot $160k plus a bonus, and realize that such idiocy bears on their bottom line. That's why this is a certainty: the law is a service industry that has to cater to the client.")

Law firms' costs (e.g., associate salaries and bonuses) are completely irrelevant to clients except as an indirect proxy of what they're actually concerned about, i.e., billing rates. These firms all raised billing rates at a much greater clip than salaries over the past 5-7 years. Returning to the old ratio (which, granted, greedy partners won't do and are under no obligation to do) would satisfy clients completely without touching associate salaries or bonuses.

Attaboy Lataboy - but there is a back story here that you are missing BIG TIME.

80 = idiot

75 is completely correct. Lowering salaries will sort out the real firms from the pretenders, and TTT clients from ones that will pay. Let the stratification begin!

I have no feelings about lock-step compensation really. But the comments on this board (and frequent comments from partners) seem to indicate that lock-step is an advantage to associates. That may be true.

But lock-step also is good for law firms. (Since when have firms done things that aren't good for they're bottom line?) It lowers the cost of managing associates (b/c they don't have to figure out how to measure associates' performance on an annual basis); it decreases competitiveness among associates (just think of the backstabbing that would go on with "pay for performance")... there are probably others. But I think lock-step will stay around because it's good for firms...

79-did you make more (salary + bonus) when you billed 2000 hours than a person at a lock-step firm? I believe that your DC office doesn't pay bonuses, so I always thought that JD was trying to hide the fact that they paid less than market.

85, name me one other private industry without unions that has lockstep compensation.

SENATOR EMERITUS IS HILARIOUS!!!

87. is right. The only reason law firms still use lockstep is because most lawyers are lousy managers.

86 - some make more, very many make less. All I am saying is that even if the average compensation for any given class is less than market at JD, that is okay. My point is that the compensation model is working. People getting rewarded for how they perform makes sense. If I do less in one year than I was expected to, I am okay with receiving a little less to know that I have excellent job security.

83,
More on the "back story" being missed "BIG TIME"????

Didn't H&H already do this?

Ahhh, how I miss Mother's sewing periodicals...

That's ok, we still have Burger King.

Retired partner here: One reason law firms pay associates in lockstep is to eliminate all the bitching and moaning that would take place at adjustment time. Associates almost all claim to prefer lockstep in order to avoid competition between associates. They assume that they'll get to work fewer hours. It's easier to pay in lockstep--less time and effort, and far less bitching and moaning. You also have the problem of how to deal with the girl lawyers who want to have children, or the minority lawyers who can't keep up with the rest of the associates, or the good associates who just happen to work in a practice area that's light in a given year. Lockstep has it's advantages, both for associates and partners. If firms paid associates what they actually were worth based on work performed and result achieved, then there would be many unhappy associates in the playpen.

I will walk if my firm cuts pay, no questions asked.

I'm 96, I talk big but will never deliver because I'm a wuss.

Dear Moronic 15,

Its not that firms are making their salary decisions based on whether ATL posts or not, but by Ellie continuously insinuating that these actions will be the norm, it makes the market more safe to make these salary cuts in. Firms will do what is best for the business but the atmosphere in which they do these actions does affect their business. When Ellie implies that salary cuts will be hitting the V50, based on anonymous "tips" (ie commenters), he adds another point in the salary cut column to a firm that may have been on the fence about doing them.

So yes, Ellie is partially at fault, especially if he keeps on rampantly and irresponsibly speculating in his posts (remember his New York is dead post that had about all of the journalistic merit of a National Enquirer Article). If bloggers consider themselves journalists, then why not do actual reporting instead of speculation. Ellie, you are an embarrassment. And so are you Lat.

-- The seriously toolish, but correct #5

95 - No need to say retired partner. You're not and, even if you were, it doesn't add any credibility. No need to make comments about minorities or women, it's a red herring. However you do make a good point re: lockstep's advantages -- no need to hide it in the other bullshit.

Wow, 15 just got ATL served

almost as funny as when bob dell "well diversified" in his email announcing mass layoffs.

26, most biglaw clients really don't care much about first year salaries. legal fees are a relatively small line item for their yearly budget compared to other items like their own employee's salaries. Sure, they would like it to be cheaper but they could have always gone cheaper to a non-biglaw firm. Many biglaw clients, like hedge funds and banks, pay people right out of undergrad 2x the salaries of biglaw associates.

I'm in engineering laughing at all you retards.

HAHAHAHAHAHAHAHA

Did partner compensation get affected at BM or just Associate salaries?

29 - was it 30-50% in all offices or just NY, Chicago?

I suppose I should be stunned by the overwhelming business ignorance displayed in too many of these posts, along with a pathetic entitlement mentality. But I can't because I see the same traits in too many partners.

That said, the difference between them and you is: they own the joint. It's their money, their firm, their task to face the paying clients.

Just because you went to a fancy school, got great grades, made Law Review, and ran up big law school debts doing so doesn't mean you're entitled to a job at all, much less at a guaranteed salary sufficient to repay those loans.

Going to law school is an investment in an anticipated future, but all investment carries risk. Just because you let your law school hustle you into paying them for 3 years to absorb 2 yrs worth of law (see nascent trend to 2-yr law degrees) doesn't mean that clients have to continue to let your would-be employers hustle them for $350/hr for OJT. Just because all such previous law school bets/investments have historically paid off doesn't mean they always will. It's kind of like the small print you insert into prospectuses about past returns being no guarantee of future returns.

Like other entrepreneurs, you make your best assessment of risk/reward, pull the trigger and hope it works out. Just like your parents and their friends did with certain securities and bonds that went bust. This time, the dice came up craps. Life ain't fair. There are no guarantees.

Value is in the eye of the buyer, and right now, a growing number of direct and indirect buyers of early-career lawyers have come to their senses, smacked themselves upside the head for the past folly of paying green kids $160k/yr and said, "Enough." Put on your Big Boy pants, quit whining and savor your $145k job -- or find something else to do. Just understand that neither the firms nor clients really care which you choose, only that you shut up and get on with it.

HEED OUR WORDS, FIRMS: WE WILL *NOT, FUCKING, FORGET* IF YOU REDUCE SALARIES.

There's a much larger issue that you all seem to miss entirely. If clients now deem your BigLaw output in yrs 1-3 uneconomic, as suggested by their growing outsourcing of such lightweight tasks to lower-cost places such as India and Indonesia, and as a result you truly have nothing to do, how are you going to get to your 4th year. You'll be like H.S. baseball players trying to jump directly to the majors. An elite few will make it, but the rest will be crushed trying to compete with adults. Now, it's not unfair for green players to have a chance to develop among appropriate competition, but right now the appetite for funding the minors is diminishing. Law firms aren't accustomed to paying for it and the clients are increasingly unwilling to do it anymore. Trust me, you need the minor leagues more than the majors need you. I would encourage you to start figuring out how to motivate someone -- anyone -- to continue to pay for a way for you to learn your trade, or you won't have one.

106: Is your sophomoric empty threat actually supposed to make some BigLaw MP quake? Did you it your head? You seem to have yourself confused with someone who has some leverage. Get a grip.

Repeat after me: "Reality has caught up with our artificial world. We must now play by the rules that the rest of the world has played by for a century. Law schools churn out 40,000+ of us every year. We have nothing to threaten anyone with."

While Stroock has always been a sheep in terms of associate compensation and other benefits, we should give credit where credit is due. Stroock was actually the first firm to cut salaries; albeit only for attorneys whose salaries do not get publicly reported (post 8th years).

Firms that cut salaries are going to have some 'splainin to do when things pick up!

105 --

Next time you post, please consider starting more of your prophetic sentences with "Just because"...

It's an incredibly effective tool. Really.

This is just the beginning. More national firms will now follow suit.

I completely agree with 5. This blog's constant Chicken Little attitude is really having a transformative effect on the profession, in that it is encouraging law firms to lay off attorneys, push back start dates, and cut salaries. Although virtually all law firms are less profitable than a few years ago, very few need to cut salaries or do deep layoffs. Yet in large part because of this blog, there is an air of pessimism settling over the entire profession. Associates are being conditioned to expect and accept the unacceptable, partners are being encouraged to abandon their principles and follow the herd in pursuit of personal profits.

I understand that some people out there, like those at B&M facing salary cuts, to whom this news is a very important part of their lives. But it is unrepresentative of the profession as a whole. The pessimistic and resigned tone with which the news is presented suggests to the reader that salary cuts are normal, just part of the times, or destined to become widespread. That does not need to be so and should not be so. Instead, there should be shaming of offenders like B&M and a discussion on how most firms have not done and will not do salary cuts.

Also agree completely with 98 re: unnecessary speculation and excessively dire predictions. How 'bout you report the news/gossip and add some light-hearted snarks. No need to be the bringer of doom.

I'm sure BM also reduced billing rates of the affected associates to provide better value to clients. Otherwise they would just be cheap greedy bastards.

Ellie, you have acted irresponsibly during these hard economic times, I think its time you ended your reign of terror. Maybe if you got a real job you would understand why people do not appreciate your doom and gloom predictions

105 pretty much says it best. There is no entitlement just because of one's degree, hard work, etc. In a perfect world, sure, sacrifice, dedication, intelligence, etc. would always be rewarded.

Think of the military- something I can relate to (and perhaps some of you out there as well if you've served or grew up in a military family).

One can check all the right blocks- college degree, working in tough jobs as a junior officer, enduring deployment upon deployment, living in places like Fort Polk, LA, kissing ass to all the right people, and risking your life in Third World countries most Americans can't find on a map.

All the while, you want more than anything to retire at 20 years with a military pension (which will still pale compared to a first year Big Law salary), medical care in your old age, and maybe, just maybe, a shot at making general.

Unfortunately, a few years in, just when you think you turned a big corner, you're blown into small pieces by an IED. End of story.

Cut your criping people.

As was said in Shawshank Redemption, "Get busy living, or get busy dying."

31 and 46 -- so naive with the nonsense about antitrust. You can't have it both ways -- ATL exists because associates take it upon themselves to share sensitive confidential financial information about their firms to better position them for increases in pay and perks. I didn't hear anyone complaining about all the posts over the past couple of years shouting about first year pay going from $125k to $135k to $145k to $160k; in fact, I'm pretty sure I heard cheers as firms fell all over themselves to match unsustainable salaries with whichever firms they saw as their competitors. Well, the sh*t has hit the fan, and firms are cutting expenses and laying off left and right.

Yes, associates generate revenue but they really don't start paying off until about their third or fourth year. Maybe what ought to happen is first through third year associates should get the biggest across the board pay cuts in lock step pay and the mid to senior level associate salaries ought to be addressed on a case-by-case basis. Once you're a fourth year, no lockstep increase for you. You prove your worth by meeting or exceeding your hours and generating your own business. And if some can't meet hours because business is down, their individual contributions can be taken into consideration. The fat bonuses of years past need to be seriously ratcheted back and given only to those who've actually gone above and beyond all year long. Too often it's been treated as a given -- more like profit sharing than bonuses. If that's a firm's intent, great -- but no one should think they deserve tens of thousands of dollars' worth of bonuses just for showing up all a year long.

Finally, Summer Associate salaries really need to take a hit. Why the hell should firms pay over three grand a week to law students who are brought in for the summer to do paralegal work and to be wined, dined, and entertained on the firms' dimes? I blame the firms for the problems they are having now and for creating the entitled junior associate monsters. If the decision-makers would make their decisions from a fiscally responsible place rather than through a PR lens, a lot of firms would be a lot better off today -- and there would probably be a lot fewer unemployed lawyers right now.

there are no straight salary reductions going on at B&M and no "individualized memos" being received. and as for "dissolution"....$2.19 billion in revenue last year. idiots.

@105 -- You're stupid if you think people shouldn't advocate for their own self interest. First year associates would be foolish to say "Yep, I'm overpaid. Please cut my wages. Please." The only reasonable course of action for young attorneys is to fight the trends trying to marginalize them.

Kenyon remains.

Who are these idiots that are talking about a completely different world? This isn't the NY Times comment page; no one cares about "econ 101" or "owning the joint" or what it's like for a junior military officer. This is a blog for junior associates, that's all. These completely idiotic posts about "entitlement", etc?! ! Why would someone that isn't a junior lawyer be reading this?! I feel guilty and retarded for looking at it - but it's my industry!!! Who are the fools reading this and talking about the outside world? Do you go around casually reading professional-oriented blogs in the hopes of finding someone making a bad point in the comments?

law firm compensation was pretty bonus-heavy so i don't understand the need for base salary cuts.

in 2007 1st years made $205k. In 2008, they made $177k. In 2009, they'll make $160k.

Seems like total comp can be cut pretty significantly without touching base salaries.

Baker McDonalds.

Well all you Latham detractors have to now (partially) eat your words. It may have trimmed a bit of fat, but it did NOT cut salaries, and remains top-of-the-market with pay. Can your firm say the same? It did what it did to STAY on top, the same way it got there.

Lawa Alumni

Damn you BM, now you have made it fine for larger V100 firms to do the same.

- Sad to see the money slipping away

Good point, 122.

Jones Day already slashed salaries in their Asia offices by 20%. They just did it quietly.

Jones Day already slashed salaries in their Asia offices by 20%. They just did it quietly.

121,

There is a legal world outside of BigLaw junior associates, and that world is greatly affected right now by what is happening in BigLaw. For those of us who have spent all or most of our careers in public interest law, we're naturally interested in seeing what sorts of folks will now be applying for jobs in our "industry", i.e., the non-profit/government world.

Additionally, some of us from time to time actually consider leaving government/non-profit and head to law firms. So it makes perfect sense to take the pulse of your industry.

This firm is so TTT--and it's only going to get more TTT now that no T14 students are going to go there.

102, show me a first year in banking, finance, or anywhere that makes $300k. You, sir, are full of shit.

As has been pointed out before, firms are 'pack actors'--they function as oligopolies, straining to read one another's signals. Meaning all it takes is one V50 'blinking' (as Baker seems to have done) for a wide swath of firms around it to do the same. Whoever speculated that the V10 is 'safe' is probably correct--for the moment. But this is going to move like a cascade. I guarantee you that firms lower than V10 all the way down that are currently basing at 160k are going to be talking about this, and, all else being equal, they're going to feel a hell of a lot better with a decision to lower salaries now that B&M has done so. It's only one more stage for the V10 to do the same--they'll just hold out slightly longer.

If the economy wern't sour, the fact that one firm does this would be pretty meaningless--Baker would just stand at a competitive disadvantage. But, to the extent this becomes a trend within the broader industry, that's not going to factor in. When times are tight and unemployment is at 10%, being at a competitive hiring disadvantage isn't on anyone's mind. Rather, people are looking to save costs. There are enough fish in the sea to still get good people now. By the time the economy does turn around and hiring once again matters, a new equilibrium will be reached. (By the time this is over, I could very easily see NY going to 145 with pure performance bonus and other major cities to 125 or 130 with pure performance bonus)

The whole legal hiring and operating model is a confused mess. It's going to evolve and that evolution is going to be rough. I don't think that means that lawyers are going to lose access to affluence-building levels of income--the law firm of 2020 isn't going to be a blue collar job factory. However, the way in which performance is measured and pay distributed is going to change.

The people most affected are the ones caught in the middle of the transition, meaning associates for the next 10 years.

I love America. I love the free market. I love whiny fucking associates.

Hey 106 - Looks like the parnters have declared war. Ain't war fucking beatuiful.

Midwest Partner.

A friend of a friend said that Elie Mystal has a 2 inch cock when hard, can anyone confirm?

131: First-year physicians can pull much more than that if they go into private practice in the right field. They might not take that home because of costs, but they can easily pull that much revenue in. And in a few years, they are clearing that. Not all fields, but the right ones (anest., ophthalmology, some ortho surgical specialties)

Obviously, they have to do more school, unless you consider the first 3 years at a law firm to be residency for lawyers

135: 102 was referring to people who are clients of large firms, namely hedge funds and banks, who allegedly pay first years 2x that of BigLaw associates. Well done pointing out that an anesthesiologist pulls down more than $300k; the residency is probably almost a decade, dipshit.

NO hedge fund pays a first year a SALARY of $300k, nor does any bank. That is the point, and 102 is an idiot. If you are 102, that means you are an idiot.

I'm not 102. I'm pretty appalled by your asinine attitude. Then again, this is the 'internets.' So have at it.

136 aka 'dipshit'

also fyi, anesth. is a 4-year residency. But facts don't matter here, do they!

124 - LW froze salaries

______________________
HANG. |
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A. |
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SHINGLE. |
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Baker Botts Sucks.

81, HF in his roadshow a couple of months ago, openly discussed cuts. Being as we're talking about MWE, it will undoubtely be done to associates, staff and income partners. And 89, lawyers may be lousy managers, but I would maintain it's when they started turning management over to "professional" manager types that the shitrain started.

Hahaha what a piece of shit firm. Fucking disgrace. I knew it was just a matter of time before this WalMart law firm collapsed.

Rich, fat and lovin' it! Booya!

The only thing worse than the people who post to celebrate the demise of the junior associates who have been caught up decisions like this one, is the juvenile backlash by the junior associates themselves who bitch and moan about how they're actually worth more money/better jobs/offers, as individual lawyers. Ridiculous. Suggestions that this whining is not the result of a childish sense of entitlement are just not to be taken seriously. And, in case it hasn't dawned on some, aren't taken seriously by the partners who have worked their way to the top, and are in positions to make these business decisions.

If you were worth more, you'd be getting paid more. And if not, it's because you suck as a person marketing themselves to a professional field. If you should've gotten X job at X firm, you'd have X job at X firm. That, or again, you didn't put in the effort you needed to separate yourself from the pack, or make otherwise sound decisions. Period. That's not a debatable opinion. It's just fact. It's the market. It's your value in the market. If you disagree, you're either naive, stupid, or you have a disturbing sense of undeserved entitlement that surely causes you problems in your personal relations with normal, well adjusted people.

131 makes a valid point that the target class of these sorts of market movements of course should not welcome these changes, and instead should resist them. That's just the fight for survival. But it is preposterous to think that these same associates are fooling anybody into thinking the limp-wristed defense of their value is well thought out or based on any sort of fact.

The $160k step salary model is unsustainable in this economy. Firms pay you as little as they have to, and they have to pay you less now than they did 1 year ago. Partners are gutless, so they don't want to be the first movers on salary cuts. Once a few T50 firms cut, another 20 will quickly follow...

I agree that the 160k salary step model is unsustainable (or, at least, is likely to change). I wondder though, if this also implies that Big Law's ability to attract top talent out of law school is similarly going to change.

Remember, there's a reason that these firms are (were) paying 160k in the first place. Working at these places is not a walk in the park--the time, effort, and, frankly, repetitiveness of some of the work involved has a real cost, and demands compensation commensurate with that cost.

It doesn't take that many lockstep pay cuts or freezes or delays to suddenly make Big Law--even for debt laden graduates--look more and more like a 'second best' option as compared to government or public interest or smaller firm work.

I mean, let's call it what it is: most T14 graduates median or above (and even wider for the T6) can, with some effort, grab an excellent government job either at the federal or elite state level. No you're not going to be a USAG at 26. But you will be in a position to be making 6 figures before you hit 30, with generous benefits, potentially more respect (or at least a clearer conscience), interesting exit options, awesome hours, etc.

I'm not trying to advocate for government work. I'm just pointing out that, for all the problems with the current Big Law model, these firms wern't (and aren't) idiots exactly in the way they set their salaries. There was a reason for starting at 160k. It wasn't (and isn't) insane generosity. It takes a lot, particularly given other options, to get people to sign away the fleeting years of their 20s for 60+ hour work weeks, intense time pressures, and somewhat archaic management practices that embody the Big Law Experience.

The Biglaw structure has always been unsustainable. You guys are in for some tough times. I'd hire you if you had some real experience but you guys were overpaid paperweights. Give me a call when you've tried a case or two. Maybe I'll get back to ya.

147 comments, and none from baker associates. two weeks ago, on the same day as the publicly announced layoff, a number of associates were put on a mandatory schedule reduction (read: a reduction in both salary and billable requirement). i was surprised atl made no mention of this at the time. maybe this is what's being belatedly and inaccurately reported today?

so is it a salary cut when your billable requirement is also reduced proportionately?

or maybe they just haven't handed out the "individualized memos" yet at our office.

When are we going to hear about the partnership cull at White & Case???

121: You actually put into writing "no one cares about 'econ 101' or 'owning the joint' or what it's like for a junior military officer. This is a blog for junior associates, that's all. These completely idiotic posts about 'entitlement', etc?! ! Why would someone that isn't a junior lawyer be reading this?! I feel guilty and retarded for looking at it - but it's my industry!!! Who are the fools reading this and talking about the outside world?"

The triple exclamation point is a nice touch. What are you, a 13-year old girl, writing notes in class?

First, it's AN industry, not YOUR industry. Someday when you have made an impact on it you might take a more credible stab at claiming ownership.

An actual adult, cognizant that industries consist of more categories of stakeholders than one narrow, self-centered stratum of spoiled early entrants, would allow that more people than your ego-centric self are affected whenever an industry contracts. Or are the secretaries, admins, IT- and marketing folks, consultants, etc., many of whom lost their BigLaw jobs, not part of "your industry"?

You make the case that you're disconnected from reality far more eloquently than could your most vehement opponent. Perhaps some day, assuming you grow up and quit throwing public tantrums, someone will take you seriously. No guarantee, but there's a chance.

Until then, if you think you're so underpaid, take an earlier poster's advice and hang out a shingle. Let's see what marginal fraction of your BigLaw salary you actually earn on the open market on the merits of your personal legal prowess, and how well your bloated ego handles the harsh reality check. Hint: Get ready to move back in with Mom & Dad.

Medium fries and a diet coke with that, thanks.

I love some of these comments from DESPERATE people...that ATL and Elie are making these cuts occur by their reporting. ROFLMAO!!!!!

1) 122's comment is so spot on that it merits its own thread on ATL. (And for more material for such thread, Elie, take a look at how stagnant salaries were pre-2007 while PPP's soared.)

2) Despite the language in which salary-cutting firms couch things, have associate billing rates at such firms been slashed?

That too needs further probing. I'm not quite at capacity, but I billed 9 hours yesterday, which basically covers this week's salary. I'll do the same today, covering this week's "overhead." And I'll likely bill around 9 tomorrow, as profit to the partners. Anything I do on Thursday or Friday covers (i) time that might get written off from Mon - Wed, (ii) last week when I was a few hours short, and (iii) more profit to the partners.

BK reminds me very much of Latham. The only difference is what Latham calls itself one firm firm (whatever that fucking means). Both expanded into retarted locations such as Spain, UAE, Belgium, etc. too quickly without having business. Notice, BK did not fire as many associates as Latham did (and will do). Middle of May some of you worthless bitches will get the boot like the other wortheless associates.

-I am safe biatches

FYI, DLA just cut Of Counsel salaries 20-30% effective April 13. Grapevine says associates are next.

The Danes have free health care and university.

Does not one of the posters complaining that Elie is stoking a salary cutting fire see the irony in their comments? Are not these the same posters that cheered when ATL helped push the entire legal market up to 160? What's good for the goose...

147 has clearly never tried to get into an Honors program, nor does he know anyone who has. Hell, there was one State AG's office a few weeks ago that had 197 applicants for two, TWO, open appellate positions. And this wasn't New York.

Government hiring cannot absorb more than a handful more people than it currently does, if they want to take any at all. And they have plenty of qualified applicants with private practice or/and clerkship experience. Generic T14 students have no shot whatsoever at these positions fresh out of law school.

So no, it's not a viable alternative. The firms were paying $160K to compete with banks, hedge funds and private equity, not the government.

Law firms also use lockstep to avoid discrimination claims.

How did B&M make the top 50? It's ridiculous... Aren't they like the biggest firm ever? Like the Mcdonalds of legal services all around the globe?

Is this like the 99 cent value menu?

Personally, I like the double cheeseburger...

161 - if your post isn't a flame, then you're a moron.

the irrational paranoia is catching...onto me!!!! AHAHAAAAAAAAAAAAAAAAAAAAAAAHHHHHH!!!!!!

Was this a frozen firm?

While I realize it's fairly futile to leave a comment on here, in the spirit of clarification, the B&M salary lowering did not occur in every U.S. office, and, as it turns out, seems only to have occurred in one. And while it's amusing to read everyone's thoughts on how B&M is clearly now a "failing firm" as a result of salaries being lowered, I find it hard to understand how a 1.8 billion dollar revenue last year suddenly equates to....a firm that's failing. I'll save all of the astute people who leave the more intelligent comments on here some time by just admitting I'm clearly a raging jack-off who got my law degree from the McDonalds of law schools through correspondence classes.

SECOND-RATE FIRM CUTS ASSOCIATE SALARIES, ADMITS INFERIORITY, ACCEPTS FUTURE INABILITY TO RECRUIT TOP TALENT

I was sitting on a plane today and heard that Baker McKenzie is acquiring McKee Nelson. The deal is being rushed to meet BM's fiscal year. (June)

Does anyone else have more information? This will add about 130 Attys to BM's 3000 plus.....

How do partners in a 130 ATTY firm where they feel valued go to work for a 3000 ATTY firm? Googling one assumes many of the MN left large firms to join a friendlier cultured organization.

What about BM? Great move on their part. Though all of McKee's founders are still practicing law, can MN leadership take a back seat and allow existing BM leadership to be in charge? Cat fights to occur in NY/DC? meooooowwwwww