zib

when i did OCI with these people they were the most obnoxious, too cool for school associates and recruiters i had ever met.

No everyone's a winner comment? ATL slips.

Time to start putting together a Salary Cut list of shame?

4 - Here it is:

Is everyone still a winner at Nixon Peabody?

When does McDermott plan to cut attorney salaries?

Nixon TTTeabody

Just because failing firms like Nixon Peabody are cutting salaries, it doesn't mean that other firms will follow suit.

Call me when a good firm abandons lockstep.

EAPD (Everyone Anticipating Probable Dissolution) will be announcing similarly "innovative" pay cuts this week.

hybrid tough love package.

Yeah, I really do want to see a list of pay cuts and trends. Does that mean my already lower tiered salary at a mid-size firm is going to get cut, too? Or does that mean I can laugh at all the biglaw people making the same as me but working tons more?

Nixon Nixes National unNatural remuneration; Presents Poor Proficiency Persistent in its People as Prime motivation

I did a 3rd year associate in the ass at a Nixon Christmas party. She never called me the following week though like she said she would. I guess everyone at Nixon Peabody is a liar.

Nixon Nixes National unNatural remuneration; Presents Poor Proficiency Persistent in Peabody People as Prime motivation

Peabody cranks up the Way Back Machine to 2006!

Another firm taking prudent measures, recognizing that the continued downward trend in the Dow reflects the underlying weakness of the US economy.

Everybody's a Loser at Nixon Peabody!

"It's total BS, especially since the Firm management is only doing it because they can. They specifically told us they didn't NEED to do it, but if other firms would do it, they would to be in line with the market."

Did this associate have such a nuanced economic understanding of the differences between actual necessity and market-matching when the firm raised first year salaries?

Nixon Nixes National unNatural remuneration; Presents Poor Proficiency Persistent in Peabody People as Prime motivation

we're doomed.

Retired partner here: The list of comp factors is close to the same as what is used by almost all partnerships when determining partner compensation. Partners are presumed to be competent, so that's not usually listed, but not so with associates. I would imagine that associates would come to well and truly hate this form of compensation structure, since it's highly political and almost totally subjective. Also, for many associates, the ability to work high billables is beyond their control. Personally, I never liked the idea that all associates in the same class had to be paid the same thing, since some associates clearly deserved to be paid more, whil many clearly deserved to be paid less.

With the economic stimulus package and imminent tax increases, I thought associates were already confronting an 70-80% effective pay cut. What is the meaning of this??

9 said "Just because failing firms like Nixon Peabody are cutting salaries, it doesn't mean that other firms will follow suit."

HAHAHAHAHA - let's play this game...

"Just because failing firms like XXX are cutting associates, it doesn't mean that other firms will follow suit."

"Just because failing firms like YYY are deferring start dates, it doesn't mean that other firms will follow suit."

"Just because failing firms like ZZZ are rescinding offers, it doesn't mean that other firms will follow suit."

HAHAHAHA

I wish there was a lame alliteration to describe this news.

"The changes reflect our conclusion that the prevailing economic climate and the resultant changes in the demand for and delivery of legal services necessitate approaches that call upon each of the internal constituencies of our law firm to shoulder a portion of the burden of realigning our firm to enable us to provide extraordinary client service all the time."

Are partners one of the "internal constituencies?" If so, perhaps in the next memo Mr. Langan will inform us what "portion of the burden" the partners will be "shoulder[ing]."

lol innovative bonus plan.

you would think that firm management would realize by now that these revamped bonus programs are transparent.

you're not fooling anyone

What is the difference between a law firm associate and a volleyball?

Everybody's at least 80% of a winner at Nixon Peabody!

Aside from 1st year pay, the frozen salaries were already similar to the 145k scale levels. Further reductions to frozen salaries means going back to something akin to the 125, 135, 150, 170 scale. At some point, maybe not right this minute, this is going to lead to an exodus of midyears to alternative employers. The pain to reward ratio would be out of wack.

re: 3

Yes, the consensus at our OCI was that these guys were the #1 most pompous and insulting group.

How many hours will it take to get the 30% bonus? 2400? 2500? 3000? Does anyone believe anyone will actually see the 30%??

29 - You can smack a volleyball on the bottom and not get sued for sexual harassment.

31, who are these legendary alternative employers? Maybe the vibrant journalism industry? The flush-with-money non-profit organizations? All five major banks remaining?

Yawn. Another pretender. Call me back when someone I care about cuts salaries...

A lot of firms are going to do this people. THey shouldnt have ben paying 160 (or whatever) in the first place. They are just paying their TTT grads what they deserve now...

Another firm that paid salaries way out of line with its profits cutting salaries is not "another swing at lockstep."

I hope Nixon Peabody clients are receiving a corresponding cut in billing rates. Otherwise, this is disgusting partner greed.

35, every organization outside of the vault 100 law firms -- the ones that employ 99.8% of the attorneys in this country.

THIS IS CHANGE YOU CAN BELIEVE IN!

Sky is falling

nixon pee-in-my-butt-y

This is wonderful news. More non-peer firms are beginning to adopt my hybrid tough love package. I predict a peer firm will crack by July and then perhaps management committees at peer firms will follow suit. More partners at peer firms are starting to accept that this will be the inevitable course of action. In this Obama economy, partner compensation and profits need to be preserved above associate compensation or concerns. This web blog has brought more smiles to my face than the entertainers at Rick's Cabaret.

I applaud their move to bringing salaries down. Now if they would make the next cut to $115,000, the world will be able to be back in order. Then be eligible for a bonus based on performance. This means actually doing work efficiently and not just billing hours.

Don't worry guys, associates' take-home pay will undoubtedly go up when Barack Obama raises taxes on double-income families who make over $250k combined.
Change in your standard of living we can believe in.

Elie is once again helping to propagate salary cuts by normalizing it.

I bet when he heard this news he splooged in his XXXXXXXXXL size pants

Elie is once again helping to propagate salary cuts by normalizing it.

I bet when he heard this news he splooged in his XXXXXXXXXL size pants

These salary cuts should be embraced by associates. Imagine, if you are a 4th year associate, a salary reduction may help you avoid President Obama's pernicious tax on incomes over $250K. By reducing your salary, you will pay less taxes and have more money in your take home pay. Your votes for Obama are starting to pay off.

No. 23: I always wondered why the lockstep salary model became the norm. It just seems so clearly unstable to me... not to mention providing little to no incentive to compete among associates of the same seniority.

The only reasoning I can think of is that it ensured a "stability" in the relations between associates, and minimized what some would seem as unfairly punishing associates that happened to be in a group that was slow at the time.

But you'd think most attorneys are smart enough to realize that the costs associated with paying people equal salaries, REGARDLESS of what they were actually worth, and regardless of what they contributed to the firm would eventually spiral out of control.

YVAN EHT NIOJ!!!!!

The ship be sinking...

at Nixon Peabody.

39, good luck with your theory that there will be a massive exodus of V100 associates to smalllaw.
First year V100 associates were paid a low low $125k as recently as 2006, and their hours sucked just as hard then, so there was huge number of T14 students going to lifestyle small-law firms back then, right?

38 is right. Cutting salaries only makes sense if you cut billing rates too and attract more business. Associates with no work to do are just as useless at $145,000 as they were at $160,000.

49 - you really want law firms to start paying based of merit .

A merit based system developed by a bunch of lawyers to pay lawyers would take , what, 12 years to develop?

I understand the call for a merit based system, but it seems like it would be uber-onerous to implement.

1. To respond to #23, the compensation structure you prefer is one that existed before the 2000 hour minimum was instituted at big firms. Associates did not ask for the billable hour minimum to increase; law firms just decided "we'll pay you more, but you'll work more." I think most associates in BigLaw would prefer to have an 1800 hour minimum and make only $145,000.

2. While NP is a "nice" place to work with nice people, it feels like the runt of a litter. It has a shitty practice but it tries to put on the face of a V20 firm. Here are some reasons:

(a) Its billing rates are lower than V20 firms, and that has to be so. No client is going to pay V20 market rate for an associate hired from Northeastern law (where NP does a lot of its hiring) when the client can pay the same rate for a HLS or BUSL associate at a V20.

(b) Its partners take home very little cash compared to V20 firms because (i) the firm is extremely de-leveraged (I might guess 1.5 associates per partner), and (ii) the firm's clients came over from the two legacy firms (NP was the product of a 1999 merger of two shitty firms) and the clients of shitty firms don't want to pay BigLaw rates. In other words, NP is permanently stuck in the middle market. In fact, some partners pushed back against firm management last year when they were told that they had to justify taking on any new clients by showing that the client would be good for more than $15k of business per year.

(c) Smart, good partners who have a personality and a book of higher end business realized they could leave and go across the street to DLA Piper or Mintz and make more cash. Currently, you are better off being a 7th- or 8th-year associate at NP because you make more than a new partner (salary + paid for benefits is a better deal than capital contribution + paying your own benefits). Similarly, not-so-great law students can go to NP out of law schools, get (over)paid for three years, get "pretend" V20 resume fluff, and then parlay that into a real firm that pays market (Note: NP's lockstep ends after the third year, and you make junk after it).

3. NP will never stop paying for making a theme song unless/until the management atones by apologizing to Lat for the cease and desist letter and making a joke about the song.

4. NP has a very rigid culture. It does not value personality. It wants to turn you into an automaton. Honestly, NP could use a large dose of scandal and/or S&C-style studliness. It is just a boring place to work where people who are professional but who don't fit neatly inside the lines are excoriated for failure to conform. (While I think throwing a stapler at Charnley was inappropriate, it at least created a little drama in the office that Wall Street types - i.e. those well-paying people whom you want as clients - could relate to. Put another way, a good V20 firm will say "I don't care if you smoke weed and sleep with random slores, just make sure you don't do it in the office, and make sure you bill your 2000+ hours." NP would actually count it against you because you're a "bad" person.)

48 -

Either you haven't taken the course on Federal Taxation, or you failed it. Your statement, "By reducing your salary, you will pay less taxes and have more money in your take home pay," reflects such a complete lack of understanding of tax policy that it would be laughable if it didn't expose your ignorance.

All of the criteria for bonus are BS except billable hours or business generation. Unless it brings in money, there's not bonus.

Blaming Obama for this is silly. We're talking about a guy who rules the country from a teleprompter like Ron Burgundy, and recently ok'd a gigantic 747 buzzing NYC for a photo op -- as if that won't cause mass panic.

http://cityroom.blogs.nytimes.com/2009/04/27/air-force-one-backup-rattles-new-york-nerve/

In actuality, it's your fault. It's like the old frog/scorpion adage; you knew what he was when you picked him up. Everyone who is taking a starting salary hit (combined with the coming hyperinflation once his stimulus waste firecannon hits the streets) or has lost their offers and voted for him should march into the bathroom, look at that glazed, unshaven visage, and then uppercut themselves smartly in the nose. You're what's wrong with America, Simpson.

56, it is very possible for marginal tax rates to go over 100%, especially with all the various phaseouts and if Obama/Democrats decided to tax everyone on Wall Street (that would include law firms) at 90% like AIG.
See also the Tuition and Fees Deduction for an example of a marginal tax of over 100%. You're an idiot.
-- not 48

59 - Since you're clearly the God of all things related to income taxation, kindly enlighten the masses who have flocked to this board to hear thy word: how in the world could law firms be hit with a 90% tax, given the vast majority of them are flow-through partnerships and not taxable business entities?

Please respond soon, for we need to know!

- The Masses

59, I'd watch who I call an idiot, because your post made very little sense. It's also very possible that marginal tax rates could go up to 2000% if Congress decided to do that. Of course, Congress isn't doing that either, but what's the point of being realistic if it will upset your carefully crafted argument?

Not 56

58 - Did you read the article you linked to?

"When President Obama learned of the episode on Monday afternoon, aides said, he, too, was furious."

61,

Good point. Do you think that if Congress did raise the MTR to 2000% that there would be a promissory estoppel argument that would permit someone to keep his/her marginally-taxed income that year? Something like, "I relied on the 35% rate to my detriment. Ergo, I get to keep my cash."

Glad I didn't take the offer

59 -

Well, "it is very possible" that your extreme case of Obama Derangement Syndrome will continue to manifest itself through the idiotic postings produced by your moronic brain, which is obviously suffering from a lack of oxygen because your head is stuck up your ass. You're an ignorant wingnut.

Can someone who isn't as lazy as me post the 145k scale? I think this is what we'll see in 2010 (if not sooner) as the new "market" pay.

As an incoming first year, should I be furious that my pay has been cut below what I was offered, or should I be happy that the firm is controlling costs and reducing the potential for future layoffs after I start (whenever that actually happens)?

67,

You likely have a promissory estoppel argument against the firm. See section 90 of the Restatement.

Thanks, 68.

Any non-contract-based thoughts?

52 - Close.

Midwest's Midsize Law Firms Faring Better Than Large Urban Rivals

Lynne Marek and Tresa Baldas
The National Law Journal
April 27, 2009

Welllllll.....

You don't really have a contract, so I think you are stuck with quasi-contract. Did you rely, to your detriment, on the promise of NP? Could NP reasonably have expected you to rely?

PROMISSORY ESTOPPEL.

63 makes a very intriguing point...

I predict that most firms will follow the Nixon Peabody model, and lower salaries of anyone who is under budget on their hours as of May 1 or June 1. Below budget will be anything more than 25-50 hours under budget. That way, firms can avoid calling it an "across the board reduction" and simply state that they are adjusting some associate salaries based on "underperformance." In essence, it will be almost a complete across the board cut regardless, because at any given firm, 80-85% of the associates are probably somewhere under budget right now. For the 15 percent who are above budget, they get to keep their frozen salaries. No rates will be reduced. You heard it here first.

Well it looks like that $10,000 stipend just turned into an advance.

Retired partner here: Responding to 55, I think many mid to large firms have visions of greatness, and that leads them to make stupid decisions, like two shitty firms merging, and thinking that the combined firm will be something other than shitty. Shit in, shit out.

59 - Your lack of understanding of basic tax policy is giving CUNY School of Law a bad name.

60, you're right, Congress cannot change the tax rates specifically for flow-through entities. This is why Congress is not able to raise the tax rates for hedge funds and other flow-through entities.
Oh wait, it turns out Congress has power to tax the partners themselves, including only on the income they get from the flow-through entities.

65, you're right, a 90% marginal tax rate was never contemplated by any member of Congress in our recent memory.

Nixon Peabody to $190... a week!

61, I would say the difference is that a 2000% marginal tax rate is pretty unrealistic, but a 90% marginal tax rate is more realistic as one instance of it was recently passed by the House, 328-93.
A 2000% marginal tax rate would be considered realistic too if such a thing passed one branch of Congress with a supermajority vote.

Just saying. Not 59.

this is a canard. firms are raising billing rates as they cut associate salaries.

this is all to avoid the pain of actually dealing with underperforming partners, who are the bigger drag on PPP. facing this music might put the decision makers in the hot seat. and therein lies the problem.

were hours cut back?

"To maintain staffing levels in the best interest of our clients, we have decided to reduce starting compensation levels for incoming associates and summer associates to $145,000"

This is a nice way of saying that they're cutting salaries to encourage people to quit.

Does this really surprise anybody? The Biglaw model requires attrition, but that ain't happening right now. So you either fire people, which looks bad, or you find some other way to make them leave.

NP's management is hoping that this salary cut will cause enough people to quit so that they won't have to do a round of lay-offs.

When the economy is roaring, for the most part, all V100 firms look alike. Once the economy hits the brakes, the top firms distinguish themselves. The ballers - Wachtel, Paul Weiss, Skadden, others - will stand out in the next year. The rest - salary cutters, deferral granters - will find their rightful place chewing from the scrap pile. Unfortunately, I am in the latter group, waiting for the economy to roar again.

Lockstep works when you can have attition rates above 50% after 3 years, minimize laterals, and have a slow but steady promotion of partners who bring in new biz while minimizing loss of current biz.

Just about none of that is happening now. The system has in one form or another been around for 130 years. Saying it doesn't work is foolish. Saying firms who do low quality work but pay cravath rates is retarded, on the other hand, is completely true

As an add-on to 55, I would just like to comment that even though NP does a lot of hiring from Northeastern, that is NOT tantamount to a lot of Northeastern kids getting jobs at NP. Try 3 to 5 a year. Maybe.

what's happening with paul hasting's incoming associates?

well I'm glad on some level to see the end of lock-step, as it rewards performance, but for the majority of NP associates, this is not what they signed up for.

that somehow strikes me as inequitable. I would be fine if they gave current associates a choice between the two compensation models and forced all new hires onto the system. then again, life isn't fair.

So, what were NP associates cut?

2nd years? 3rd years? 4th years? 5th years? on up?

We were told everyone got cut-- is this true?

encouraging people to quit

not that V rankings are that meaningful, but, is Nixon Peabody now the highest ranked firm to cut salaries?

It's just a matter of time until biglaw realizes that it can convert the $5,000 per mo/$60,000 per year stipend for deferred associates into their new starting salary when they join the firm.

Can anyone tell me if this is a canard? If so, can you also tell me what "canard" means?

Some perspective losers, 145K starting is a TON of money in this environment. If this helps them preserve jobs, so be it.

Only a matter of time before this phenomenon heads up the Vault prestige ladder. Only a matter of time, kids.

92 - canard means duck in french. I am unsure of its relevance to the present discussion, if any.

Sorry, but I get a kick out of other junior associates thinking they have leverage. Sure, Latham will go down in infamy, but you guys are living in a bubble -- Right now, it's this . . . or starting out at 60k and there isn't much between (and even in a good economy, there isn't that much in between to handle enough people who'd like to wield a protest vote).

In a decent economy, there are still a decent amount of students in the top 14 (say, bottom quarter at the lower end / bottom 10% higher up the rankings) who will have a lot of trouble getting big law jobs.

You can tell yourself there's a big difference between the quality of their output and yours, but it's not going to be that much.

That's in a decent economy.

In this one - If you want to quit a $145k job in protest, there will be a 100 people waiting in line to take your place whose work output isn't going to differ too much from yours.

96- you're right. Working at Nixon for a summer was great and I am appreciative of the opportunity to return, regardless of the salary cut.

Thanks man, you're 100% right.

This is genuine

55 and 75: Spot on. I work there, and not only are associates getting salary reductions, but all staff/paralegal compensation is frozen and bonuses only went out to non-exempt staff (based on years of service, not even "do you actually do your job").

55, 2a: We just do NOT get the big matter business of Fortune 500 companies. Period. Or Fortune 1000 sized companies either. We grab some IP work, some contract disputes, some fringe matters that arent even close to "bet the company" type cases. Forget top X law firms for recruiting, i think high school graduates could enter as associates and provide just as valuable a service to the clients.

55 2b: The firm is on a push for bigger/better clients, in a typical NP "mantra" type of internal marketing scheme. However, the partners I interact with on a daily basis don't seem concerned about generating new business whatsoever. They are quite happy with their existing clients, it seems. Some clients ask questions and for advice in certain areas which, to me, are low hanging fruit to cross sell a different service or something we can help with - - i bring it up to the partner, who 9.9 times out of 10 could not care less.

55, #4 - - i have NO idea why anyone would ever buy the "best place to work at" line. It's total crap. I've been yelled at with every 4 letter word in existence, from attorneys and even staffers in half the cities we operate in. One poster commented on the attitudes of their on-campus recruiters being the most snotty/arrogent of the lot .. i COMPLETELY believe that, and don't blame you for it turning you off to NP. This place is NOT the best to work for,and you will NOT be treated like a team member, member of the "family," or anything else - - you are on your own.

This is the first law firm i've ever worked at, and will certainly be the last. If this is "the best" law firm to work for, then an industry switch is certainly in order for me. Since i've been there, i've seen a dozen young associates leave on their own accord. Some left because they didn't see partnership in the cards (there are already a LOT of partners compared to associates), but most left because they just couldn't stand it here any more.

The lower salaries will be a blessing in disguise for new associates looking for a place to work .. hopefully it discourages them from considering NP as their employer. I'd rather take half the pay, but work at a top 20-30 firm, than get $160k at NP .. you'll be working for clients no one's ever heard of on cases that will never make the papers, and won't have too much impressive stuff to pack into your resume for when you make a move to a better firm.

I LOVE ACID!!!

Nixon is not a serious player. It is basically a regional firm based in Boston with a couple of sattelite offices. I have no reason to think they are a bad firm (except for 98's comment) but I don't think this qualifies as the sky falling.

Also, 96 has a decent point. If you fall out of the 165k jobs, you typically fall all the way down to 60k jobs and there isn't much in between. Back in the old days of a few years ago, some of the regional firms, AM Law 200, or non-NY offices kind of filled that gap, but they still paid about 10% less than the big players. If this is going to be a trend, it will probably re-create that and only apply to those sorts of firms.

TODAY'S SUMMARY -- Nixon Peabody effectively f*cked its highest performing associates today by cutting their salaries signficantly to match those of the weak associates that should have been laid off anyway. In the end, the good associates will no longer be motivated to work at the level that made them successful in the first place.

A word of advice to incoming summer associates -- take the salary and enjoy the lunches and events and then accept an offer from another firm when you return to law school in the fall.

Advice for associates -- ride out the storm and then leave the first instance you find a higher salary elsewhere because you'll never make up the salary you lost today staying at NP.

Any response from others?

TODAY'S SUMMARY -- Nixon Peabody effectively f*cked its highest performing associates today by cutting their salaries signficantly to match those of the weak associates that should have been laid off anyway. In the end, the good associates will no longer be motivated to work at the level that made them successful in the first place.

A word of advice to incoming summer associates -- take the salary and enjoy the lunches and events and then accept an offer from another firm when you return to law school in the fall.

Advice for associates -- ride out the storm and then leave the first instance you find a higher salary elsewhere because you'll never make up the salary you lost today staying at NP.

Any response from others?

TODAY'S SUMMARY -- Nixon Peabody effectively f*cked its highest performing associates today by cutting their salaries signficantly to match those of the weak associates that should have been laid off anyway. In the end, the good associates will no longer be motivated to work at the level that made them successful in the first place.

A word of advice to incoming summer associates -- take the salary and enjoy the lunches and events and then accept an offer from another firm when you return to law school in the fall.

Advice for associates -- ride out the storm and then leave the first instance you find a higher salary elsewhere because you'll never make up the salary you lost today staying at NP.

Any response from others?

"We've listened to the concerns of our clients about rapidly rising compensation for our associates and the corresponding rise in billing rates."

This does not make sense. In business, you do not charge cost-plus, you charge value. Partners don't bill $950/hour because it costs them $950/hour to do the work. They bill that because that is what they feel clients will pay. Firms can lower associate salaries or raise them, but that decision only impacts firm profit.

Whether to raise or lower billing rates is an entirely separate analysis. For that, the rate should be determined by what the market will bear. The inference that raising associate salaries means that there must be a "corresponding rise in billing rates" is nonsense.

98- what office?

Everyone's a... loser?... at Nixon Peabody!

This is a ridiculous move on Nixon Peabody's part. It also seems a little dishonest.... the money saved by these pay cuts probably isn't being passed on to "concerned clients." I bet it's going into the partners' pockets. I hope you enjoy your house in the Hamptons while your associates toil for below market wages. At least, enjoy it while you can since your firm is no doubt going to have trouble recruiting and retaining the talent necessary to remain a viable professional services business.

wow 55 *destroyed* Nixon Peabody. I mean wow.

Please, spare me the pity party. $145K is about 2x the average income for a FAMILY in the US, and this for a person, typically in their '20's, who hasn't had a real job before. Give me a break you whiners.

Promissory estoppel? Please, that'll get you no where. I think a much more reasonable cause of action would be contributory negligent infliction of slanderous emotional distress resulting in a defamation of invastion of assault blah blah blah blah. See "Restatement: We're all screwed."

109- You clearly haven't noticed, so I'll fill you in: this blog is populated by (i) smart, motivated people who worked their asses off in college and law school, because they have genuine ambition and (ii) trolls like you. Eat shit, and die. Our taxes keep your out-of-work sister living well, pay for your kids' educations and fund your pension, which your shitty company neglected to do.

If my firm, which is ranked similarly to Nixon, decided to take $15,000 or more out of my pocket, out of the mouths of my family, you can bet your lazy, stupid ass I would be making A LOT more noise than I've seen so far.

But I'll tell you what, 109. Why don't you post your phone number here, and if I tire of flipping my own burgers in my own back yard, I'll give you a call to take care of that for me.

Thanks so much.

111: Nicely stated.

99 - That's not acid, yeah that was just a little piece of paper I ripped off my notebook....

Ol' Tricky Dick Nixon would be rolling in his grave.

111: you nailed it. NO ONE HERE CARES ABOUT YOUR VIEWS 109.

Canard: 1. a false or baseless, usually derogatory story, report, or rumor.

Do other insiders at Nixon know some of the analysis used in cutting the salaries of associates beyond the 3d year? Was it based on hours that the associate was projected to bill in FY2009? Was the firm trying to bring salaries back a couple of years for the mid and senior levels?

Either way, morale is now completely destroyed and so is loyalty.

109 - the average family does not rack up >100k in student loans....why the fuck do people make these simplistic comparisons?

111- you are an idiot and a self entitled douchebag. Almost certainly a 1L. The notion that this blog is "populated with smart, motivated people" is almost funny. Really?? Do you read the posts here? Like yours???

It is certainly populated with smart people but the main population here are rude, mean and poisonous....what is worse is that there are also a number of republicans.

I think 145K is more then enough to live on and feed your self entitled face. I doubt any big law first year associate deserves that much money for being trained for 2-3 years and frankly you do not have a lien on being smart or hardworking. There are plenty of others who are just as smart and workas hard and as well as you who will be more than willingly get paid 145K to commit malpractice 5 times a day.

I can say this while working at a firm that starts at 160K, has not made salary cuts and continues to pay decent bonuses.

And yeah, your tax dollars don't pay for any out of work people in my family as there are none, and the next time you get tired of flipping burgers go screw yourself since you certainly cannot afford me.

- Not 109

117,

This is 55 again. It is not so much that NP is "cutting" salaries beyond the third year (other than whatever cuts are associated with this story). Rather, it is that NP is not lockstep after the third year. If your salary as a 3rd year is $185, you might make $185 or only $190 in your 4th year. Salary increases are haphazard and paltry after your 3rd year.

And let me also say this: The reason the clients are "concerned" is because they regard NP as a place to get cheap, average legal advice/representation for fringe matters that don't involve the core of their respective companies. I strongly suspect that the same "concerned clients" are not as "concerned" that the V20 firm that the client uses for more core matters raised its rates for 2009. The "concern" is relative to what you are purchasing.

Responding to 85, please put it in context. In Boston, the firm has a summer class of 11 law clerks. If 4-5 of them are from Northeastern, that is almost 50%, whereas across the street at Ropes & Gray, WilmerHale, or even Mintz Levin, 50% of the class is from T28 schools. This is not meant to be a knock on Northeastern - it's meant only to say that clients are going to be interested in what (i.e. who) the firm is selling. If I can sell Google my third year associate from Harvard for $385/hr and Nixon wants to sell me a third year for the same, I'm obviously going to go with the associate who came from the more selective school (he presumably is smarter, having done better on his LSAT and UGPA...or at least that is what the CEO can tell his board when the $50,000 legal bill comes in this month).

NP is going downhill (only to the extent that it ever went up hill). Practice groups that should be doing well this recession are gasping for work. The firm won't implode, but I believe (i) it should take a serious look at replacing the management, and (ii) it needs to decide what it wants its identity to be.

It's all about the team, it's all about respect, it's all about integrity!

120 here. Revision: At the "other firms" listed in paragraph three of my post, I strongly suspect that 95-100% of their classes come from T28 schools -- not merely 50%.

And, if you'll permit me to take a "cheap" shot, the firm is very tight with its summer program budget. It thinks it spends a lot, but compared to the firms that NP is trying to be, it doesn't. There is no ability to just take a summer to lunch and get to know him/her. There is no taking a summer out for a beer after work to discuss how things are going. It's either "we all go as a group so we can get a good discounted rate" or you don't go at all (in the latter case, the firm stresses that you need to get a "true impression" of what it is like to work at a firm). Say what you want about summer program excess in general, but comparing apples to apples, NP struggles.

119:

"It is certainly populated with smart people but the main population here are rude, mean and poisonous....what is worse is that there are also a number of republicans."

Oh no....there are Republicans!!!! Run for the hills!!! I knew there were some mean people on here...but gosh, dare I say it....Republicans!!!

So you are, in one blanket statement, implying that all "republicans" are "rude, mean, and poisonous"?

Yet another stereotypical lib who is only tolerant of his own views.

People disagree with you about key issues facing the country, and they always will. Quit being a child by equating disagreement with ill motive.

Wow. I have never read the comments on this site before. What a bunch of disgruntled haters - I don't get the point of your posts. I am an associate at NP, I am very happy here, I work on interesting cases for top companies, I have done substantive work for years and am in and out of both federal and state courts all the time, and I got a very minimal salary cut due to my contribution (and that's legal contribution - I did not bill close to 2100 hours last year). I worked at "top" lawfirms prior to being at NP and I gotta tell you that the quality of the partners I work for here is on par (if you think that you are a better practitioner because you went to Yale or Harvard as opposed to BU or Fordham, good luck with that), and the treatment of associates is much better -- when I first came over I was actually shocked at the touchy-feeliness of it all. So for all of those people who are writing nasty things about NP for the seeming heck of it, I would suggest an aggression-cutting hobby. It's a beautiful day - go for a run or something, since I assume you are unemployed.

111,

You will get your chance to react to a pay cut soon enough. Your clients should pray that your legal work is not riddled with the uninformed assumptions that fill your blog postings.

You may be smart. You may be ambitious. You are also expendable as many of your associates are learning.

@ 119: if you think that the commenters represent, to any degree at all, the general population of individuals who read this site, you, sir, are a fool. I would work very hard to conceal this fact if I were you, because boasting about how much you cost while at the same time broadcasting your foolishness is a poor career decison. But gratz to you on all that yoga, which allows you to get your head up your ass.

To the debaters on quality-of-the-school sub-topic: you're in danger of joining 119 in that unfortunate physical pose. We (on the client side) are neither stupid nor backward looking. It has become quite apparent that having the ivy on your wall and being part of the old boys club doesn't mean anything. Richie Fuld had the NYU Stern pedigree and rode it for all its worth - and even though he was discharged from the service for taking a swing at his CO, we all thought he must be worth every penny BECAUSE HE GRADUATED FROM NYU!!

Those days are nearly over. I don't want to pay $450 an hour for someone who graduate #289 from HLS and can discuss critical legal studies over whisky but who can't explain to me whether or not I have a breach of contract claim. I'll pay $300 an hour for the # 1 or 2 guy out of Northeastern or Hofstra or Rutgers who KNOWS what he's talking about and doesn't have the chip. Unfortunately, my CEO (Yale) has another 15 minutes to run the company into the ground before the board boots him for his Fuld-iness.

124, please recognize a few things:

1. You got a salary CUT at all. Most firms have either kept salaries the same or have merely frozen salaries. NP is one of the few firms that are cutting salaries (right after they laid off associates).

2. Why didn't you bill 2100 hours? You will tell me because you "want a life" and give me the lifestyle firm song and dance. The reality is that the work wasn't there. And why wasn't the work there? Because there are too many partners with too small of a client base to justify their portion of the take-home. In turn, associates are less-than-busy.

3. Yale or Harvard vs. BU or Fordham is not the issue. The issue is Yale/Harvard/BU/Fordham vs. Northeastern, Suffolk, etc. And it isn't really about who is a better practitioner. It is more about whose product you are selling to a F50 company for a comparable price -- a Harvard grad's or a Suffolk grad's? It is saying less about who is qualified and more about how the client market judges degrees from good vs. shitty schools. (Although please note that the more judgmental comment here would likely also be true, but I'll refrain from making it.)

I am an associate at Nixon Peabody, and I completely agree with everything 55 & 98 have said. I had these feelings before the firm announced any pay freezes or salary rollbacks or bonus reductions, and my anti-Nixon sentiment has only grown stronger now that they have enacted these measures. I pray for the day that I can get the f* out of the place and strongly urge everyone to never consider it a viable option. While there are some really great people in some of the smaller offices, most of the partners and senior associates are a bunch of tools who are miserable to be around.

I also truly hope that none of the large firms follow this trend so that Nixon is all alone out there.

127 --

I don't mind the salary cut since they did it instead of lay-offs. It would not have been my decision had I been in management but I respect it and appreciate that I still have a high paying job in this economy.

Work was there. I just chose to take my vacations and work efficiently on my workload. I am not forced to take so much that I bill 200 hours a month, and generally speaking the office is empty on weekends.

I have never heard of Suffolk, nor do I know anyone here from Northeastern (but would that be bad if they were good lawyers?), but I know a ton of people here who went to Fordham, Michigan, NYU, BU, etc. I don't understand where that comment comes from.

And yes - it is about being a better practitioner. At least for me.

Again, I don't understand all the hate on here.

Instead of layoffs? You just had layoffs not two months ago. Let's see if you are right: when the economy turns, your salary should be restored before the firm hires a single new associate.

You are not understanding my point. I am not right now saying that Northeastern or Suffolk grads are bad lawyers. What I am saying is that a company is more likely to trust intense, bet-the-company litigation to a firm full of former clerks and T10 grads than to a firm full of grads from less-selective schools. The fact that you have "never heard" of Suffolk illustrates my point.

It's not hate. It's the raw truth about your firm. Maybe you like the pay cut and the touchy-feely-ness of being a winnter, but for those who want exciting work and want great experience, NP is not the place.

To the NP associates: any word on how offers might look for SA's?

130 - Did you ever work at NP?

I'd also be interested in whether summers are screwed.

NP has a lot of smart, productive lawyers, and actually gets an impressive amount of high-level work. However, the already non-competitive associate pay scheme just got worse. Fourth year and higher associates at NP, in general (but quite possibly without exception) have been paid (for years ...) significantly under market when compared to 1st-3rd years and to their peers at comparable firms. Yesterday, major market 1st years were cut just over 9%, while many senior associates were cut much in excess of 10%. So now, NP has 6th year associates making salaries that compare to that of 3rd years at competitor firms, and so on up the ladder (and down, 2 rungs). Very high performers, who assumed (and who wouldn't, based on management's message??) that they would be spared a cut following the initial 2009 freeze, or cut minimally, got the biggest cuts ... perhaps because it was felt that prior increases earned by these dedicated folks were too generous. This is a mystery. Relatedly, the bonus for 2008 was just paid (late), at 50 cents on the dollar (news of which halving came in Feb., together with the scant lay-offs and the freeze), leaving those who killed themselves for the firm in 2008 feeling mightily disregarded, to say the least. The new bonus policy could get that down to about 30 cents on the dollar, for anyone still interested in working beyond the "minimum requirement." It is very difficult to see how these strategies are going to foster a "high performance culture" and move NP up in the pecking order. Rather, as some have noted, the opposite will likely occur. What a shame.

NP associate here. I am ashamed to be working here, but then again, that is exactly what the management wanted.

And we cannot complain. They are holding us captive; the recession is NP's prison guard.

Why did management do this? Is work that slow for associates? Are there any depts that are seeing decent levels of work?

Why did management do this? Is work that slow for associates? Are there any depts that are seeing decent levels of work?

Magungo and Latuka have announced a new salary/bonus structure that will be paid out in conch shells

I second 131 and 133. Any idea what summer associates can expect from NP?

So basically what that means is that senior associates who worked their butts off and performed at a high level to finally attain a market-rate salary are now being told that they did’nt deserve their pay raises in the first place.

That’s a terrible way to treat people.

So basically what that means is that senior associates who worked their butts off and performed at a high level to finally attain a market-rate salary are now being told that they did’nt deserve their pay raises in the first place.

That’s a terrible way to treat people.

So basically what that means is that senior associates who worked their butts off and performed at a high level to finally attain a market-rate salary are now being told that they did’nt deserve their pay raises in the first place. That’s a terrible way to treat people.

So basically what that means is that senior associates who worked their butts off and performed at a high level to finally attain a market-rate salary are now being told that they did’nt deserve their pay raises in the first place. That’s a terrible way to treat people.

I third 131, 133 and 139.

I know it won't change anything, but it'd be nice to have an idea what the mutterings are around the firms about SA offers if there are any.

I third 131, 133 and 139.

I know it won't change anything, but it'd be nice to have an idea what the mutterings are around the firms about SA offers if there are any.

The firm will treat its SAs reasonably well because it wants you to go back to your school in fall 2009 and report to your 2L friends/career services office that you had a great time being a winner at NP. All but one or two will get offers (i.e. out of a class of 12, they will give offers to 10 or 11). Then if you are foolish or stuck you will return to NP in fall 2010 (or later) and get shit on like this.

Oh, except that this summer you'll be making less than your peers at normal firms. And you'll be bringing your own lunch. And between the time you accept your offer and start work, your starting salary will be cut in half.

Among 12 summers in the Boston office in summer 2007, only six returned the following fall. One was no-offered for being a major tool. The others saw the light.

55 is right that NP struggles because it is one of the largest firms in the country with a client base as weak as the one it has. There is top-tier work here, but not much of it. The firm has maintained its top-tier pretensions by overpaying people at the first- to third-year level and having very modest raises thereafter because it simply can't afford to pay top-tier wages for all associates. No amount of massaging of the bonus plan is going to change that. It's also true that most associates here work a lot less than at the true top-tier firms and like it that way, which is not a bad thing.

As for the "rigid culture" 55 complains about, I don't think that's true in my office, but I think it is in some offices.

All in all, not the best place to work if you need an unlimitted drug budget, poorly managed (like most law firms), but not a bad place to work.

"So basically what that means is that senior associates who worked their butts off and performed at a high level to finally attain a market-rate salary are now being told that they did’nt deserve their pay raises in the first place."

Well, they obviously didn't deserve their raises, per the market, but they still collected that pay, so it's really hard to feel sorry for them.

146+147: thank you very much for your posts. Any insight on what practice groups to latch onto? (list office if you can)

Boston - Syndication; RE (if you think economy will rebound by the time you start in fall '10 if you choose to return to the firm); and White Collar.

NY - Project Finance

But in all cases, don't come back after your summer. It just isn't worth having your firm always be in the news for negative reasons.

150- what about litigation or private equity for an incoming summer?

151: private equity is a mess. they have already cut 1/3 of their associates and there's more cuts to come. there's just no work.

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

Thanks 150. I wouldnt have thought real estate and syndication would have any work at all.

What about trusts & estates?

152- what about business litigation in NYC?

156: in better shape than private equity. 155: i didn't know there even was a trusts & estates group.

157,

They call it Private Clients.

157-so NYC incoming associates are basically screwed? How long should we last before getting canned? 6 months? 1 year?

Nixon didn't have the courtesy to email its incoming first years the memo. WTF? we had to find out 2nd hand...

Is this even real? SA's didn't get any notice from the firm either....

Ditto to 160. Have any incoming first-years or SAs heard from NP? Or has anyone contacted them to find out more?

SA here, I've gotten emails from the first since this announcement and no word about salary cuts.

Dear SA's and First Years, Welcome to the world of "Communication" as defined by Nixon Peabody. The day the e-mail was sent, there were no partners to found in the office. No one to go to for further explanation about the pay cuts or anything. Get used to it. Managers/supervisors are USELESS!! HR stands for Human Retards and you'll be lucky to get a straight answer from anyone you are referred to.

159: no more so than at any other midlevel firm

Actually, I think #109 has a point. $145k for someone who's never stood at the counsel table before or signed a pleading before, and whose life experiences are often extremely limited, is a lot of money. Let alone $180k or whatever. I admire more someone who makes it on his or her own, without the umbilical of The Mother Ship, or who at least has demonstrable (i.e, proven) skills.