Salary Cut Watch: Drinker Biddle Cuts Salaries AND Rates
Sorry to go all caps on you. But we finally have a firm that is using the crisis to seriously rethink the nature of the first year experience, instead of just firing them, deferring them, cutting their salaries, or generally acting like first years are solely responsible for ruining the Biglaw model with their entitled insistence on being employed after three years of legal education.
The Legal Intelligencer and AmLaw Daily reports that Drinker Biddle will actually allow first years to start in September:
Rather than immediately assign the incoming lawyers to client matters, the firm will enroll its hires in a new training program that will provide courses on taking depositions, writing briefs, and meeting client needs. The instructors will include Drinker attorneys, professional development staff, and firm clients. The 37 first years also will shadow partners’ client meetings and court appearances. The associates may handle some client work, but at significantly reduced rates.
There is a catch. For the first six months, first years will be paid on a scale of $105,000. That is a bigger reduction in salaries than we’ve seen at other firms. On the other hand, Drinker Biddle is also reducing the rates that clients are charged for first year work.
Anybody else notice that responding to client concerns about the value of first year attorneys by reducing billing rates makes intuitive sense? I think Drinker Biddle management would do very, very well on the LSAT.
After the jump, we see that Drinker is rethinking the entire first year experience.
We’ve obtained the internal communication from Drinker Biddle about the firm’s new first year program. For the first six months, first years will be treated like apprentices instead of spare manpower:
The First Year Class. We have also decided to welcome and train our incoming lawyers rather than defer their arrival for months or a full year. It is not in the best interests of the firm or our clients to have untrained lawyers arrive at the firm later rather than sooner. It may well turn out that there is not enough first-year level client work to keep these new lawyers occupied. Indeed, we recognize that some of our clients are now unwilling to accept newly minted lawyers on their matters, believing that they should not be obliged to pay top dollar for new lawyers who are still learning their craft. That being said, if we are to provide our clients with the highest quality mid-level associates, we cannot shrink from training and developing those lawyers. They do not come ready made.Accordingly, we are advising all of our incoming lawyers to join us in late September of this year and to expect to spend the first several months of their practice receiving intensive training - a training program far more rigorous and focused than any we have previously provided. Although much of this training will be focused on traditional legal skills relevant to particular areas of practice, we also expect to spend substantial time educating our new lawyers about our clients’ businesses and Drinker Biddle’s approach to adding value in countless practical ways. Our incoming lawyers will be expected to observe partners in their daily interaction with clients, with adversaries, and with the Courts. Although the program will inevitably involve some “classroom” time, our new program will be designed as a form of apprenticeship to the practice of law, free from the burden of billable hour requirement. The faculty and administration will be DBR lawyers and professional development staff, and the curriculum may include sessions with our clients. We will also be looking to all of our lawyers to make special efforts to find opportunities for our new lawyers to gain the kind of real world experience our clients expect - even if we cannot bill for the time.
During this initial period - when our training program will consume most of their time - we will pay our incoming lawyers at an annual salary rate of $105,000. Any client work they perform will be billed at a significant rate reduction to ensure that, if new lawyers perform work for clients, the value is clear. In the spring of 2010 - once our new lawyers have been with us for at least six months - we expect to bring their compensation in line with then prevalent market rates for first-year lawyers. In this way, we intend to address the often-repeated criticism that we are training our lawyers at our clients’ expense while at the same time ensuring that our overall compensation system for associates is logical, consistent and fair.
This is a good line: “That being said, if we are to provide our clients with the highest quality mid-level associates, we cannot shrink from training and developing those lawyers. They do not come ready made.”
This is a better line: “Any client work they perform will be billed at a significant rate reduction to ensure that, if new lawyers perform work for clients, the value is clear.”
For months, law firms have been complaining that clients don’t want to pay for first year associate work. But instead of using that rhetoric as an excuse to eviscerate first year salaries, Drinker seems to be actually addressing the root problem, instead of the merely messing around at the (profit) margins.
And shockingly enough, they’ve achieved a much larger salary reduction than firms who just want to go back to 2007.
Will other firms follow Drinker Biddle’s lead and offer real training to first years before it bills them out to clients?
Read the full memo below. There are actually a lot of changes going on at Drinker, and most of them seem refreshingly logical.
DRINKER BIDDLE — MEMO — PROFESSIONAL DEVELOPMENT
TO: All Lawyers
FROM: Alfred W. Putnam, Jr., Andrew C. Kassner
The economic convulsions of the last six months have led law firms throughout the country to reexamine how they develop talent and provide value to their clients. Many firms have reacted to the economic downturn with attorney and staff reductions, and by telling their incoming lawyers to defer their legal careers for up to a year. Similarly, many firms implemented across-the-board salary freezes for 2009 and limited the bonuses they paid at the end of 2008.
We have tried to take a different path. Our strategy has been to maintain traditional practices rather than focus solely on capital markets. We have attempted to maintain a balance of practices to ensure that when economic cycles turn, we continue to be able to offer the services that our clients require. All of which means we cannot stop investing in our younger lawyers just to meet the immediate demands of a down cycle. For this reason, we honored our bonus program for lawyers and staff last year, and we did not implement an across-the-board salary freeze. The flexible associate compensation system we implemented several years ago when many other firms preferred lock-step systems has served us well during times of both economic expansion and contraction.
That being said, economic change has required us to review a number of our policies and practices to make sure that the services we provide are perceived as valuable when measured against the bills we send for those services. In particular, we want to make sure that the firm’s economic perspective is appropriately aligned with that of our clients who have made their viewpoints clear both in individual meetings and through the “Value Challenge” initiative of the Association of Corporate Counsel, an institution with which our firm is proud to be working closely on these matters.
To this end, we today announce a number of items regarding the staffing of our matters and the development of our lawyers:
* Associate Compensation. We have begun a review of our compensation program to ensure that it is aligned with the needs of our clients and the professional development of our lawyers. We expect the review to be completed by the end of the fiscal year for implementation in FY2010, and we are confident that our work will yield a system that strengthens both our firm and our relationships with our clients.
* Associate/Counsel Bonus. We have completed a review of the bonus program and have decided that it should be consistent with our more flexible base salary system. Currently, bonuses are determined almost solely by the recording of billable hours. Our clients are now telling us - in no uncertain terms - that they question whether the value provided to them is properly measured in this way. This means that we will probably be entering into a greater number of alternative fee arrangements over the next few years - arrangements that do not value or reward hours as such. With this in mind, commencing with FY2009, we will award bonuses based on merit and quality of service, not merely by number of billable hours. It does not follow, of course, that billable hour production will cease to be a significant factor. Hard work deserves to be (and will continue to be) rewarded. From now on, however, exceeding billable hour targets will not be the only factor in bonus awards. Continued investment in the firm and delivery of value to our clients will also be considered. We will shortly provide you with a memorandum that describes the modifications to the bonus system. (We should also add that the firm will continue to provide business development bonuses to our associates and counsel.)
* Evaluations. When we moved to a structure focused on management at the practice group level, our Practice Group Leaders took on greater responsibilities. We have found that, especially for the larger practice groups, requiring Practice Group Leaders to conduct associate and counsel performance and salary reviews in January and February is increasingly difficult given the other pressures of that time of year (e.g., year-end collection efforts; business and financial planning for the new fiscal year; completing partnership promotions; preparing for the annual partner allocations process). We have therefore decided to move the annual performance evaluation cycle to the fall. This is a change only in the timing, not the substance, of the evaluations. We should also note that salary decisions will continue to be made at the end of the year, and associates and counsel will be notified of salary decisions by the end of February.
* The Hiring Program. Many of our lawyers have asked us whether we intend to modify our hiring program. In particular, given client questions about the value of very junior lawyers, it has been suggested that we should rely more on lateral hiring of more senior lawyers who have already received their initial training elsewhere. After consulting with our Practice Group Leaders and partners responsible for our significant client relationships, we believe the answer is not to cut off the source of talent and future leaders of our firm by abandoning our traditional practice of hiring lawyers out of law schools. Nevertheless, we are now reviewing how we run our summer programs and train recent law school graduates to be Drinker Biddle lawyers. Instead of focusing only on numbers, we may very well hire fewer people and commit to train them better. We are reviewing how and whom we recruit with [Redacted], and we anticipate making significant adjustments to our summer program syllabus.
* The First Year Class. We have also decided to welcome and train our incoming lawyers rather than defer their arrival for months or a full year. It is not in the best interests of the firm or our clients to have untrained lawyers arrive at the firm later rather than sooner. It may well turn out that there is not enough first-year level client work to keep these new lawyers occupied. Indeed, we recognize that some of our clients are now unwilling to accept newly minted lawyers on their matters, believing that they should not be obliged to pay top dollar for new lawyers who are still learning their craft. That being said, if we are to provide our clients with the highest quality mid-level associates, we cannot shrink from training and developing those lawyers. They do not come ready made.
Accordingly, we are advising all of our incoming lawyers to join us in late September of this year and to expect to spend the first several months of their practice receiving intensive training - a training program far more rigorous and focused than any we have previously provided. Although much of this training will be focused on traditional legal skills relevant to particular areas of practice, we also expect to spend substantial time educating our new lawyers about our clients’ businesses and Drinker Biddle’s approach to adding value in countless practical ways. Our incoming lawyers will be expected to observe partners in their daily interaction with clients, with adversaries, and with the Courts. Although the program will inevitably involve some “classroom” time, our new program will be designed as a form of apprenticeship to the practice of law, free from the burden of billable hour requirement. The faculty and administration will be DBR lawyers and professional development staff, and the curriculum may include sessions with our clients. We will also be looking to all of our lawyers to make special efforts to find opportunities for our new lawyers to gain the kind of real world experience our clients expect - even if we cannot bill for the time.
During this initial period - when our training program will consume most of their time - we will pay our incoming lawyers at an annual salary rate of $105,000. Any client work they perform will be billed at a significant rate reduction to ensure that, if new lawyers perform work for clients, the value is clear. In the spring of 2010 - once our new lawyers have been with us for at least six months - we expect to bring their compensation in line with then prevalent market rates for first-year lawyers. In this way, we intend to address the often-repeated criticism that we are training our lawyers at our clients’ expense while at the same time ensuring that our overall compensation system for associates is logical, consistent and fair.
We have mentioned our firm’s active dialogue with the Association of Corporation Counsel, an organization that counts many of our clients among its members. We intend to meet (and surpass) the “Value Challenge” posed by the ACC and its members. This starts by ensuring that our lawyers are trained early and well in the Drinker Biddle way. We began this process last year by reorganizing our firm’s CLE system. We will commit to do better by upgrading our comprehensive program for our new lawyers rather than by telling them to come back in five months or a year when we can staff them on client matters without adequate training. We have chosen to look at the current economic environment as an opportunity to change the way we develop our lawyers and serve our clients. We hope all of our incoming associates will understand, and perhaps welcome, that decision.
* Flex-Time Policy. We are also pleased to announce our continued commitment to the career development of our lawyers who decide to practice on a less than full-time equivalent basis. A memorandum explaining the policy review and the policy is going out today.
Although the current economic environment is uncertain, our partnership is committed to providing the best opportunities for our lawyers and to ensuring that our firm continues to be the kind of institution that each of us felt privileged to join. Long before any of us came to this firm - indeed, long before any of us was born - the lawyers of this firm and each of its predecessor firms were proud of the institution to which they belonged. We still are. And we wish to conduct ourselves in such a way that all our lawyers, including those arriving this fall, will feel the same way we do. We acknowledge that there may turn out to be a price to pay for that - particularly in a year like this one. If so, then we think it right to pay it: this is a time to rise to the challenge, invest in one another, and provide for the continued stability - and success - of an institution that has never been afraid to take a different path.
Drinker Biddle Sends Associates Back to School [AmLaw Daily]
Earlier: Prior ATL coverage of salary cuts
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Comments
First.
And Ha-Ha!
sec 90, fuckers
Drinker Biddle >>> LaTTTham
Finally some common sense!
this seems like a really good idea
Cue Partner Emeritus and his tough love hybrid package in 5, 4, 3, ...
What makes intuitive sense is having Mr. Mystal, who shocks me insofar as he claims to have a Harvard JD, removed from editor-in-chief duties on this web site.
Drinker Biddle is a pretend real firm. Philadelphia is a pretend New York.
This salary cut is a cry for help from a dog sh*t firm.
Admitting that I haven't waded through this entire memo, I think this is a good move on Drinker's part. First years don't learn a lot of stuff with the work they're assigned anyways, so this will probably benefit them in the long run. Yes, they're taking a pay cut. But they probably won't be working on a 2400 hour pace either. I don't think these first years can complain at all...
Pretty good idea, although I would reduce 105 to 70 for the first year.
Wow, this is actually a pretty good idea. In terms of training, it's not enough, but it's a start.
However, what happens once the economy ramps up again and you have to actually throw first years into real work because there aren't enough bodies? I suspect this handholding type of training goes right out the window. As soon as partners can once again get away with billing first years, they are going to do it.
Agree with number 4. Finally some common sense.
Hm. Well.
Hm.
This doesn't seem too bad.
Will this affect incoming summer associates?
"we expect to bring their compensation in line with then prevalent market rates for first-year lawyers. "
I think they meant prevailing??? also what will the market rate be by spring 2010??
You have got to be kidding. You are signing the praises of a firm that just sent associate salaries back to 1999? And in the guise of doing something good for the clients? I guess there is one born every minute.
awesome, are they accepting 3L applicants?
8, dream on. Your NYC chop shop will be next. I thought 145 would be the new 160, and man is 105 a far cry from that! Welcome to the suck, bitches!
8 - in the next five years the US legal system will have substantially moved towards the European trainee/intern system for dealing with first and second years. It makes no sense for clients to pay $300+ per hour to train a recent grad who knows absolutely nothing about the practice of law (and it makes absolutely no sense to pay said recent grad $160k).
You have got to be kidding. You are signing the praises of a firm that just sent associate salaries back to 1999? And in the guise of doing something good for the clients? I guess there is one born every minute.
8- Drinker Biddle has had very few layoffs (20 associates?), honors its commitment to incoming first years and pays them at a rate much higher than a $10k stipend for being deferred for 6 months, as other firms are doing, and responds to clients' concerns regarding the billing rates of junion associates- so how is Drinker a pretend real firm?
8- Drinker Biddle has had very few layoffs (20 associates?), honors its commitment to incoming first years and pays them at a rate much higher than a $10k stipend for being deferred for 6 months, as other firms are doing, and responds to clients' concerns regarding the billing rates of junior associates- so how is Drinker a pretend real firm?
Gentlemen at the legal preparatory academy with which I was once affiliated, on certain occasions, found themselves to be employed by limited liability partnerships, the legal purpose of which was to engage in the practice of law, whereupon such partnerships elected to reduce the compensation paid to those of the gentlemen just entering upon the practice of law, so that the gentlemen might receive instruction from more experienced practioners, not only into substantive areas of the law and the practice thereof, but also into the nature of client relationships. Although this training caused financial strain to the aforementioned gentlemen in the short term, these actions were beneficial to the clients of the limited liability partnership undertaking the aforementioned training program, and the enterprise was considered to be rational, and perhaps even forward-thinking. The enterprise was, in fact, significant and worthy of further consideration and contemplation, despite whatever sneers of derision and other aspersions cast upon it.
this actually sounds like a firm with some brains
-1L
"So, here's the deal. To stay afloat, we need to slash associate compensation, far more drastically than other firms have done. In fact, we need to roll it back to 1999 levels. I have a great idea on how to get away with it without incurring the wrath of the blogosphere (and maybe even garnering some praise among some of the the more myopic commentators). This is what we'll do: we'll announce that the reduction is temporary and will be adjusted to some undisclosed level in the future -- let's call it "then prevalent market rates," which might allow us latitude to lower them even further if other firms follow our lead! Then, we'll stop referring to our first years as "associates," and instead encourage them to think of themselves as "apprentices." Yeah, that's it: apprentices, sort of like summer "clerks." And at the same time we'll make a lot of noise about training. I know it's a long shot, but the sheer audacity of this proposal might trick people into thinking that we're "re-thinking the entire first[-]year experience." In a way, I guess we are: we're "re-thinking" it by cutting salaries by something on the order of 40% with no firm assurance of what they'll go up to or even if they'll go up at all. What the hell, let's give it a shot!"
--Drinker Management Committee
This is actually a great idea. I would much rather make 105k till Spring than just 10k till January... and actually learn something in the mean time, besides how Jon cheated on Jon & Kate plus 8. Even if this model doesn't work, kudos to DB for thinking outside of the box and trying something besides just waiting.
This is what firms should do.
How many of these incoming first years will be fired before they get the opportunity to earn the spring 2010 market salary?
Scalia was right... maybe if law schools didn't offer courses like "Gender and the Law" law students and soon to be young attorneys would be forced to take things that, you know, might develop practical skills.
20 - Clearly this rubs your overly inflated sense of entitlement the wrong way.
What, besides spending 3 more years in school, have these first years accomplished to be worth more then, say, 80K per year, tops? They know precisely squat about the real business of law.
Here's the rub, as mentioned by others:
Will salaries actually increase? If they do raise salaries to "market" rates by next spring, this plan appears to be solid alternative to full year deferrals or flat out cuts. However, if there aren't increases in salary, then what?
On the surface it seems fair, but I am, admittedly, not the most nefarious person out there. This could work out to be a "test the waters" move before full scale salary cuts.
No one cares about a first year . . . but what happens when clients decide that 2nd years aren't worth it either?
First year lawyers DO NOT deserve to be paid 160K straight out of school. They add no real value to a deal. I think this is a good idea.
I'm with 25-- this is a clandestine way to drastically cut salaries. That is problematic. Why? The legal education system depends on these astronomical salaries because new lawyers who are headed to Biglaw frequently graduate with 6 figures in debt.
The bargain had been this: If you run up all this debt, we (i.e. the firm) will help you repay it. We can criticize that bargain, but it made sense for most associates (and if they hated Biglaw, they could take the money for long enough to retire their educational debt and then leave).
DBR has drastically altered this bargain. $105,000 sounds like a lot of money to most people, but Philly isn't a terribly cheap city, and some unlucky associates are looking at something on the order of 50% of their take-home pay going to loans. If DBR continues to generally treat associates like shit (as Biglaw generally does), I wonder whether $105,000 is sufficient incentive to get those associates in the door. If not, this is a bad idea.
19 said it. This is the UK model.. 2 years as a "trainee" during which time first and second years are paid 50% of associate salary.
Great move by DB's partners. Slash pay for incoming associates, train them to be lawyers, then pay them far less than you previously agreed to pay. Run these reductions up through the associate ranks, then watch the PPP skyrocket. Good move.
I did a Drinkle Biddle Princeton associate in her ass once.
Ballard Spahr associate
Law Schools should be two years with one year of on-site training at the firm.
smart
This makes a great deal of sense. Other firms should follow.
Isn't this just an implicit recognition that law school is a waste of time?
T10 graduating 3L with COA clerkship...so I'm not just being bitter.
The catch is that slashing first year rates is NOT new. First year attorneys have always been billed at lower rates than their more seasoned colleagues--rates reflective of the difference in experience. And on top of that, a substantial portion of first year time was often written off at many firms. Adding a battery of training opportunities is not new either--most firms have always had these things available to (or mandatory for) incoming associates. So DB is doing what they have been doing, except that now their incoming associates are getting their salaries drastically cut.
I understand these are tough times and starting on time with a reduced salary is much better than being substantially deferred or losing your job entirely. But Drinker Biddle made a deal with these young people headed to their firm. The incoming associates held up their end of the bargain, but DB is asking them to pay the price of the economic slowdown. The right thing would be for the firm to accept a small hit in its large profits so that they could honor their end of the bargain as well.
For a non-peer firm, DBR is thinking better (outside the box) than the management committees of peer firms that are clinging on to the antediluvian model of associate compensation. I congratulate Andy and Alfred for their visionary thinking and courage to take these salary reduction measures seriously. I only wish more of my younger partners can align themselves to this type of groundbreaking thought. I am very pleased with this type of news and hope more firms follow my hybrid tough love package in the months to follow in the wake of the abomination of Obama's nation.
33, there has never been such a "bargain." If it did exist, then all the T4 graduates with $150k in student loans would be getting $160k jobs.
You graduate with whatever debt you chose to take on. Some people get high paying jobs, including those with no debt. Others do not. Your salary has nothing to do with your student loan amount.
You might say that the lower salaries will deter people from going to school and taking on the high debt. No it will not, as the vast numbers of current TTT graduates will attest. It's laughable to expect a significant number of liberal arts or polisci majors to do a cost-benefit analysis of their next 15 years. Lawyers are bad at math, remember?
I'm a BigLaw first year and I think this program sounds awesome.
I started work the same day Lehman filed for bankruptcy and it has been a ridiculous roller-coaster ride ever since. Swinging between a crushing workload and utter boredom, partners all on edge because the clients are on their asses about our bills, senior associates hoarding projects, and all the while constant anxiety about billing hours and never feeling like I've learned a damn thing about practicing law.
Something like this would have been fantastic, both for my professional development and my sanity and I would gladly take a pay cut in exchange.
Finally some common sense. Who knew that the 1800s were right on when it came to lawyer training. An apprenticeship and some brains is all you need. As 29 said, Scalia is also write. Gender and the Law courses don't help anyone become a lawyer. They just pad the pockets of law schools. Shorten law school to two years, firms will expand programs like this and have 6 months to 1 year of an apprenticeship at reduced wages and billing rates (like med school) and you kill two birds with one stone - reduced debt for graduates and reduced attrition rates at the same time and clients get real lawyers instead of pretend lawyers (I guess that's 3 birds).
32,
Listen, I am not a first year. But when I was, and when I billed 2200 hours that year performing research and reviewing documents, I was worth it, because my bosses made 4 times that after the clients paid their bills.
There's no need to thank me, I was just doing my duty.
Mission accomplished.
33 - I hope you are trying to back your way into a promissory estoppel joke, because otherwise, your sense of entitlement is comical.
Law students are not owed jobs. And firms would love to be busy enough to be hiring scads of them at full freight. Drinker Biddle didn't coerce anyone to go to an expensive law school and rack up debt. Law firms can't be absolutely blind to the realities of their markets. What DB's market and clients are saying is that they can't afford to pay a full class of first year the market first year salary, nor that they have the work to support them. so, they tried a different way -- a way that actually gets these first years training while other recent grads will be sitting on their butts eating bonbons with their stipends or "helping charities" (ha! they're fresh out of school - this means getting coffee) for a few months. When the market picks up, these associates will be ahead of the curve. They'll have better lateral opportunities (if any exist) because of this training. And those exit opportunities may force DB to raise their salaries when they and other firms become busier.
But really, first years generally do not earn their $145 or 160k except in very limited circumstances. It is an apprenticeship, and everyone always knew it.
Just because a failing firm like Drinker Biddle is cutting salaries doesn't mean those of us at real firms have anything to worry about.
Fantastic Idea. Really, train your attys before you use them and cont charge the client a ton for their less experienced work. It makes complete sense
30 -
20 here. Not sure what overinflated sense of entitlement to which you are referring. I am a non-equity partner in a national AMLaw 50 law firm, and started my career in 1998.
In most metropolitian areas, $105k was barely enough to get an apartment, car, etc. with a family, and that was when people only had about $40k in student loan debt after law school. I don't think that amount would feed the bulldog today.
Let me explain something for those who don't know. Law firms make a ton of money, including money off of first year labor. Most large, national law firms have partners making in excess of $3M in total compensation every year. Rest assured that these are the same guys coming up with these cost-saving schemes, dressing them up as quality of life programs, and laughing all the way to the bank.
Sure, any job is better than none, but one should still be paid what is fair. If you want this model, great, be prepared to make around 15% of your collections when you hit your 7th year, instead of the 33% that is the historical norm for compensation of associate attorneys.
Customarily, new entrants to a profession make no money and work ungodly hours.
Doctors, accountants, pilots, etc. Name any occupation that has a licensing system, and you will see the same pattern. Apprentices make no meaningful dough, and work a long time to transition from apprentice to journeyman as it were. The money then follows.
The only profession that doesn't work that way? (and only one part of it?), big law. Why, because dumb clients pay for it.
And they are going to stop. First, right now they don't have any money. Second, the CEO asks the general counsel why he can't outsource to india like the CTO did. And the answer is, she can.
You folks think the bar associations will stop the law firms from outsourcing. But nothing stops the in house staff from outsourcing to india and passing the result off as their own work after a cursury review, just like the IT folks do.
I know of one very very big life insurance company that already specifies in its contracts with law firms that no apprentice, er, 1-3rd year associate can bill their matters. Notice I didn't say work on them, just bill them.
Medical interns and residents starve and work 24 hour shifts. Why do law students think they can avoid the fate of every other apprentice occupation. Because there was a silly moment in time when big corporations were dumb?
New lawyers should be paid and billed at new paralegal rates.
I like this program... you get decent training, no expectation to bill... not yet at least and you get to make 6 figures... can't beat it really. Sign me up!
Wow, they actually learn how to be lawyers rather than just how to do document review. They learn the whole client representation process.
So what if it is a reduced salary, bet they also get to go home at a decent hour. No more being told at 4 p.m. they are pulling an all nighter to get a memo out. Plus, I didn't see a mention of a billable hour requirements. So, they won't be killing themselves to get an arbitrary number of hours.
This is so brilliant. Which means no other firm will do it.
This is brilliant. DB puts to shame all those heavyweight firms who went different directions.
49,
That is correct. A sinking ship is nothing but a sorry, unfortunate spectacle for those on ships afloat.
There is a false panic (generated by failing firms like Drinker Biddle) putting downward pressure on salaries at firms that are solvent, with paying, solvent clients.
Law firm economics support $160k for first years, so long as the firm has successful corporate clients.
In this bad economy, some firms will fail, which can't be that far off for a firm like DBR.
To the people who wrote:
"The bargain had been this: If you run up all this debt, we (i.e. the firm) will help you repay it...."
and
"But Drinker Biddle made a deal with these young people headed to their firm. The incoming associates held up their end of the bargain, but DB is asking them to pay the price of the economic slowdown...."
I like the way you two are thinking. We could just be throwing things out there, but wouldn't it be possible that the now lower-paid first years could have a claim against DB on a claim of promissory estoppel? I mean, if they acted in reliance on what DB told them, Restatement section 90 might be applicable!
46: right, not "write", d-bag.
"Law firm economics support $160k for first years, so long as the firm has successful corporate clients. "
Apparently they couldn't realistically support such a salary, as at the first sign of trouble the entire system is in trouble. Sigh. I can't think of a single first year I've ever met who has been worth their salary. Or any biglaw attorney, for that matter.
DBR is not perfect, but generally treats its people pretty well. they are pretty open and honest w/ associates, esp when it comes to financials, and seem to make a serious effort to address associate concerns. there is no reason to think there is anything nefarious underlying this policy.
Hey idiots hailing the "european model," chew on this: university is subsidized, often entirely, in Europe. Law is studied as an undergraduate course in Europe. Students in Europe have nowhere near the levels of debt as their US counterparts. Finally, European attorneys all want to work for US firms because they hate making 30k pounds when their US counterparts are pulling down 75-80k pounds.
Jackasses.
as a woman, i can see both sides. But the reality is - you CANT have it all...and sacrifices on either end are going to have to be made. I dont think its right that I or anyone else should have to pick up the slack of someone else who decides to have a child. I think it is possible to abuse the system like the former partner mentioned and currently my friend knows of someone who is doing it INTENTIONALLY so she never has to work a full year and blatantly talks about it to anyone (outside) the office about it. Yup keeps getting pregnant but this is in gov position.
You want equal pay, equal respect, equal opportunity you should do equal the work. It is a fairness standard. If mommy track means reduced hours, reduced responsibility, and reduced work product and quality (and only if this is the case) then it should also mean reduced salary and reduced promotional opportunities. Not every woman wants to have children and I dont feel I or anyone else should have to pick up the extra slack for someone else and have them earn the same with the same promotional opportunities for less hours worked than what I or anyone else have given.
This goes for pregnant women AND anyother special characteristic you think should merit you extra protection. Saving some over others only breeds contempt and friction. Equally distributed - no one questions it.
Incoming DBR summer associate here. This sounds pretty awesome. I am planning on applying for clerkships in the fall anyway, but this training program sounds like a creative and potentially very effective way to meet client needs AND train better attorneys. I am proud of Drinker, and hope this works up to its potential. I also hope they are not being sneaky and dishonest about the "return to market" after 6 months. I would take the 6 month salary hit even AFTER a clerkship if they let me go through the training program, and then bumped me up to 2d year status.
I cannot help myself -- I continue to post, yet obviously have jumped the shark eons ago.
Please, somebody shoot me. Or else I might have to shoot myself, and then write a suicide comment that everyone will hate.
Stop me, please.
This is somewhat law schools fault too. Schools jack up tuition 10% a year because students will get big law jobs that will cover it. The euro model doesnt work here for that exact reason: people in europe graduate with next to nothing in law debt AND dont need to go to grad school. Being an apprentice IS their school. So yeah, they can afford making 50k a year when they have no debt from undergrad and no need for a grad degree.
This is just another TTT wannabe firm trying to dress up their salary deductions as pretty as possible. They had TTT clients that wouldn't pay first year bill rates (and first years CAN do real work, I'm sorry if you think otherwise. Most are slow and need some guidance, but if they work hard, overall end product will be good ). So the F what.
This is just an example of a firm that shouldn't have been paying at or near cravath rates. So what. The real firms aren't deferring, are doing reasonable layoffs (and aren't Lathaming about it), and likely won't do more than a minor salary deduction. Anyone doing more was clearly over their head.
48, 33 here. I don't think anyone is necessarily entitled to anything (nor did I say any such thing). But I do know this: associates will put up with significantly worse working conditions (including but not limited to hours) when they are making $160k than when they are making $105k.
The status quo effectively delivers the warm bodies that large firms need. I'm not sure whether the DBR system will do that. If DBR cannot get the bodies it needs in the door, then this program is a bad idea.
great, real world solution to the reality that clients won't want to pay for first years in 2009/2010. And in terms of experience, substantive training for associates beats sticking them with research/memo duty for the first 18 months of their careers by a huge margin.
Partners have been complaining for a few decades that first years don't know to do anything. They've also said that first years are overpaid. This is not news.
Clients are now refusing to pay for first years to do poor quality work slowly. This is *not* actually a surprise.
Lowering rates doesn't actually solve the problem of first years. Lowering their pay doesn't really solve the problem, either.
Yes, this approach -- lower rates, less work, lots of formal training and opportunities to observe -- is obvious. It is responsive to the real issues. Many of us have been calling for this kind of thing for quite a long time.
Yes, it is about time. I hope that the rest of big law follows suit immediately.
Too long. Didn't read.
Is the training really going to make them great lawyers?
33/66: At least acc. to the memo, the salary will be $105,000 for the first six months, when most of their time will be occupied by training. If they are working far less hours than first years were when salaries were increased, then I don't see this as some huge rip-off. Many firms are telling kids not to show up for months or ever. This firm will pay you at over 2/3 the full rate and train you and let you start on time! The only thing better is to not be at a firm that is having to adjust start dates, but these kids can't make that change now.
Yes, associates will put up worse conditions when they make more money. But you're missing two very important points: DB doesn't seem to have enough work to have any first year be miserable with their workload (the training will be most of their time, acc. to the memo) AND $105k is still better than not having any job at all or experience.
After six months, DB expects to bring them back up to prevailing compensation. Yes, some might not get raised fully, but they at least get a decent shot at it.
There are too many law schools and too many law students. DB should have no trouble finding associates to take them up on their arrangement for a good long time.
#61 is correct.
71, I'm working under the assumption that this is a (permanent) pay cut in disguise-- otherwise, why wouldn't they have announced a salary for the period after the "training period?"
73, I think they are leaving themselves the flexibility -- or being wimps, depending on perspective -- to see what "market" is in Spring 2010 and follow the pack on associate comp at that time. At least in Phila, it's not at all clear where the firms are going to settle on starting comp.
I'm having a hard time visualizing how this works prospectively -- although there could be real benefits if the training were practice area AND industry specific. (Send them to work at the client?)
Otherwise, your future DRB applicant has the choice between taking this "internal training" option which is, at best problematic OR going to a firm that pays more and provides real work.
I just can't imaging anyone accepting an offer that pays less if they have a viable option.
This is a great idea and all, but how much training can they possibly do?? There is not enough to fill up 8 hours a day for more than a couple weeks, best.
Hey 47 - I hope your kidneys fail....dumbass
Incoming DB Associate - I would rather get trained so that I develop skills that add value so that I get to keep my job in a year instead of getting 75k to do nothing for a year and then be worth nothing to clients b/c I still don't have a clue.
DB FTW
33, are you an idiot? Philadelphia is dirt cheap, especially compared with NY/DC.
Drinker is doing the right thing. Law Students who think they'll get those big firm jobs are overpaid morons with no practical experience to offer firms. Hell, start them all off at 65k, see how they do the first year, then increase hours and compensation accordingly.
BigLaw first years are the biggest bunch of whiny pussies there are.
Why couldn't my firm do something similar!!! This really is a win-win for both the incoming associates and the firm. Definitely a better deal than $10k to play video games for 6 months, only to be deferred again when the work doesn't pick up.
All firms should be paying attention to what Biddle did today. We incoming associates would happily take a pay cut -- even a drastic one -- in return for a secure start date.
This makes so much sense. It's not perfect, but it's a creative, logical approach that actually addresses the problems law firms are having in this economy by (1) cutting firm overhead in the short term, (2) addressing client concerns in order to protect existing business, and (3) positioning the firm to have a full slate of trained attorneys once the economy recovers.
I'm about to graduate with high honors from a (very) top-tier law school, with a federal COA clerkship to follow. If the firm I'm currently connected with pulls my offer, DB will be one of the first places I send my resume.
NLJ ran a story last week about why most NY firms WILL NOT cut salaries. Why didn't you cover that ATL?
82 - they won't cut salaries because they will be cutting the large majority of their incoming classes as we approach the mythical January start dates.
Drinker seems to have a good plan. And it may work for the next year or two. However, once the economy picks up, they're going to have a tough time recruiting top talent.
In Canada they call this articling. They've been doing it for a very long time.
61 is the jackass here. No one is forcing you to go to a private school and rack up hundreds of thousands in debt. Go to a state school and take advantage of in-state tuition. Work a few years before law school and save up money. Take a part-time job while in law school.
Trust me, when re-evaluating the associate compensation structure, not one firm will care about your debt. There will be plenty of candidates willing to accept this salary for a chance at BigLaw (and you can take your debt, prestige and disappointment and go hang your own shingle).
European Model Advocate.
A reliable source has indicated that this could tangentially affect Stevens K
84 - the economy will not pick up until 2012 at the earliest. I don't think people grasp just how bad the market is, and how bad it will continue to be for years to come.
People will just be happy to have ANY job as a lawyer.
19, 32, 48, etc. -
First years do not get paid $160k (well, back in day...) because they are "worth" $160k to clients, or because they are going to make $160k for the partners, or because of law school debt, or cost of living.
First years get paid $160k because they are the top talent coming out of schools and in a number of years those who remain at the firm (or some firm anyway) are the top talent who will be "worth" MORE than their then-salaries to clients, MORE than their then-salaries to the partners, and MORE to the firm generally. The starting salary is what's supposed to lure the best and brightest (of which, clearly, you are not). Do you need me to use less words? Do you really think not investing in the future will pay off in the now?? Are you the owner of the New York Rangers circa 1998 to 2006? Glen?
THEY DON'T PAY GET PAID WHAT THEY'RE WORTH TODAY, BUT WHAT THEY GONNA BE WORTH TOMORROW.
But I'm sure you didn't read all this because you're too busy driving the pathetic collection of rubble you work at into the ground with your heroic short-sightedness.
29 - Congrats on getting this far in law by using hornbooks and Google. At a certain level, you need to be able to THINK in order to make an argument. If you think law schools should be 3 years of watching "The Practice" and hanging out at your local small claims court, you can go be Scalia's clerk.
if they are being honest about returning to market levels after 6 months, this is only an approx. $25,000 paycut. Assuming this is a 9-5 gig with very little stress and possible upside of actually knowing what you are doing much better in 6 months, not bad. Especially if it allows DBR not to layoff more than the handful they did a few months ago, and not defer anyone or do any of that other nonsense all these others firms are doing
It amuses me that the only people who scoff at Drinker's plan are jews, the sons of criminals, or both.
Again, how about a column on the firms out there that are doing well in the current climate?
Again, how about a column on the firms out there that are doing well in the current climate?
Absolutely agree with 90. And if they don't return to market salary, there's always promissory estoppel.
The law is like nature, and young lawyers like the predators in the wild. The polar bear is the biggest badass, most powerful. The polar bear is also the most rigid. He must have a specific set of circumstances (thick pack ice over seal-filled oceans) in order to survive. The coyote is far less powerful. Not much of a badass. Kinda wimpy, really.
The polar bear is rigid, and now that circumstances are changed, he's soon to be extinct. The coyote, while less powerful is completely flexible - hunting anything, living anywhere, thriving no matter how circumstances change.
The question for young lawyers in this market: are you a polar bear or a coyote - dying or thriving - insisting on an entry level biglaw job that no longer exists in a metropolis that's overpopulated with your kind, or flexible to move location or change your expectations to survive in a changing world???
Let's cut the "apprenticeship" business. Law school does teach you something, and graduates have a set of skills -- researching, writing, and legal analysis generally -- that form the foundation of great lawyering. First years have a tremendous amount to learn, but to say they're completely untrained or worthy of a paralegal's rate and salary are gross exaggerations.
I'll preface my statement by saying that, in light of market conditions, DB's move seems fair and smart.
However, when I was a first year associate, not too long ago, we had lots of mandatory training seminars, none of which have been helpful in developing me professionally. Practicing is the only thing that makes a good lawyer. It sounds like DB is going to try and get the first years involved in real matters, but it will be difficult for senior lawyers to take a substantial interest in these young associates when they cannot expect to see a financial return on any of that time. It's a bit sad, but this will be a major problem.
In addition, first years are frequently under-utilized, often in part because they're attending so many training sessions, and they've never taken a 1/3 pay cut for it in the past.
I'd have mixed feelings if I were an incoming DB associate. It's nice that the firm seems to want to develop you, but at the same time, there are many questions: When will the "apprenticeship" period end? What will the increased salary be? Are there billable expectations for the first year? Will I be expected to work long, late hours for a reduced salary? How will I be reviewed if most of my work is attending training or mentoring time?
Granted, these questions may be more desirable than worrying whether a job will still exist in January 2011, but the DB situation is still less than ideal. I'd much rather take some cash, even if it's too little, get deferred 6-8 months, and start with a full salary under the normal set of expectations.
95 - You're an idiot. You could have made your point in one sentence. I hate you.
This firm is dogshit, but that could be said for every law firm in PHILLY.
"This starts by ensuring that our lawyers are trained early and well in the Drinker Biddle way. "
Piece of crap firm.
99 -- but what happens in 6-8 months when they defer you again or revoke your offer? At least here you know where you stand with the firm.
Also, and more importantly from an incoming associate perspective, DB is ahead of the curve with this move. They seem to be the only firm recognizing the new reality and changing their model to adapt. How the fuck is deferring for 6 months going to help anything?
95, you forgot the house cat? the one that shits in a box.
101 for the WIN!
Wow.
What's critical here is DB is saying "we are taking an interest in your professional development in the long term." Now who knows how the program will work, or if it will in practice. But mentoring relationships have always been critical in education, and at least here there is the semblance and attempt to foster that. I think this is a brilliant, refreshing approach. There's also a remarkable level of honesty in the statement. I will definitely apply to be a SA there.
98, no real billable hours expectation for the stub year (through 1/31, so most of the way through the six month training period).
101, I'm not at DBR, but I'd rather be an employed first year in Philadelphia than an unemployed/deferred one in NY or Philly or anywhere else.
89,
I reapeat 1st year lawyers are NOT worth 160K. Get over yourself! Why pay people that much money that don't know anything about lawyering and all they do is leave after 2-3yrs. You think 1st year attorneys should make more than Supreme Court justices? It is all a sham and YOU are too pathetic to realize this.
32
32/106, you are spot on. I have a PhD in Organic Chemistry and a JD. When I graduated with my doctorate, i had several offers: NIH. Glaxo, and some university post-docs. I went the pharma route (Glaxo) and only started at slightly above 90k, and this is after 5 years of solid research and 6 publications in graduate school! Newly minted attys. don't know dick. Sure they can write, research and perform basic, basic legal tasks, however, an undergraduate could perform those functions likely with similar proficiency with a little on-the-job training. They do not deserve their over inflated salaries. And the fact that some, i.e. 89, bitch above a pay cut for a salary that he/she doesn't deserve in the first place, is really irritating. it makes me hate this profession more and more...
This program is awesome. I'd take the pay cut for the better experience and no billable quota. I'd take the pay cut for a whole year if my firm offered it.
And when viewed against the backdrop of mass deferrals at supposed "top" firms this program is better for the firm, twice as good for the clients and three times as good for the first-years.
Instead of well-trained lawyers who got shafted on pay for a year, in March 2010 my firm is going to get a boatload of untrained rookies who've backslid over the course of a forced seven month vacation. They'll be worse than traditional first-years but they'll have even less time to learn.
I'm sold on the Drinker program.
Since 1984, I have gone through a run of former big-firm associates in my Silicon Valley startup boutique firm. Not a good experience. I now limit my colleagues to those having 15 years' experience or more with a proven record of handling real-world business law demands. Only in a surreal world would the billable time of such narrowly trained and inexperienced attorneys be passed on wholesale to clients. I can't imagine that world will continue without significant modification in today's stressed climate. The only thing that shocks me is how long it is taking large firms to make needed adjustments.
I'm senior associate, and I think the Biglaw model works plenty well. It's just that we can't afford to pay young associates who aren't busy, particularly with the added pressure from clients to avoid staffing them on cases.
But first year associates (and junior associates generally) learn by doing. Trial by fire. And the work product, after proper edits, is fine. No junior work products ever goes out to clients without editing. In my opinion, depending on the tasks, some of the best work product is produced at the cheapest cost comes on cases staffed only with junior associates, senior associates, and Partners. No midlevels. It's a shame many clients don't realize this.
I also don't believe that junior associates will learn more under Drinker Biddle's 'training program,' than they would by doing real work. These salary cuts and rate cuts will help the firm in the short term and will help clients.
If can help preserve jobs (no small feat in these times). But it isn't a better model in the longterm. It only benefits junior associates to the extent clients won't pay junior rates. Even though the work product they get when juniors are on the case is really just as good and in many cases cheaper than when midlevels do the first draft.
I love how quickly we seasoned attorneys turn on the younger ones coming out of law school. I'm sure I wasn't worth $125k in 2000 in the minds of the partners at my firm, but they had to suck it up and pay me anyways. These kids went to law school thinking that they would get jobs starting at $145k (which quickly jumped to $160k). Now, they are rightfully worried that they got themselves into serious debt for a profession that seems to be moving backwards. I think that some of us on this board need to get some fucking empathy and quit acting like know-it-all douchebags. If we were born a decade later, we'd be in the same boat.
111 -- from all of us, thank you!
This is a genius move for both DB and the incoming associates. A far better deal than these BS deferrals which only delay the inevitable. The firms simply don't have the ability to take on new associates right now at the current model. DB is recognizing this and adapting accordingly.
And DB incoming associates can study for the bar without worrying about whether they will have a job come January.
I agree with 110. Appropriate salaries are a function of billing rates and what clients will pay for services. Across-the-board, it's questionable whether all the billing rates are justified.
But as between junior associates and midlevels, I feel that the same quality of work can often be produced at less cost by having the juniors take the first cut. Depending on the task, of course.
These associates are screwed... is the firm going to tell all of the partners and other associates that these first years are clerks only, and not to be involved as regular associates? Catch 22, as then these first years get zip for real training during this time. However, if the firm gets them fully involved as regular associates, then these first years will end up doing a bunch of useless training classes AND end up billing and getting that memo assignment at 4 pm Friday - oh, and now that first year is earning a 1999 salary for that work. Yes, the firm is screwing these associates either way... and the decent associates will not stick around when the economy turns again, as it will.
This is a fantastic idea for the firm, incoming associates and clients (assuming the new associates really do get 145/160 after 6 months).
But what will the firm do when the legal market recovers? If they keep this program and comparable firms return to business as usual, Drinker can forget about recruiting. There's no way I'd take a job at Drinker over any market paying firm if it meant I'd have to spend 6 months in training purgatory before my real career began.
115 - don't worry about that. The legal market won't recover for another 10 years.
19 / 34 - Your point is incomplete. In the UK law school is NOT 3 additional years after "Uni" (ie college); law school there is a mere undergrad institution, that means no astronomical tuitionand no lost opportunity costs for 3 years, plus those socialist bastards get full free healthcare and other mandatory benefits, so
So... implying that US (NY) is finally heading in the right direction is misplaced and quite ridiculous because, young "lawyers" there -- who are mostly ignorant kids who couldn't run a deal or even a simple closing -- do not graduate with 6 figures worth of debt (and sometimes a family), which is very common in the US of A.
Restatement 90 might be of significants here.
This plus one year reduction in lawschool will be better: two years at school and one year of training.
Restatement 90 is a piece of shit.
83 - Very good! You can consider how two possibilities may interact. That's impressive!
The point is that ATL loves covering salary cuts and layoffs, for some reason, and refuses to cover good news.
117 - I hate to break it to you, but here in the US first year associates are mostly ignorant kids who couldn't run a deal or even a simple closing. US associates also need go through the trainee phase to learn substantive practice skills (the time for which should not be billed to a client). Consider this my PE-esque hybrid tough love package for associates -- less prestige and lower pay!
Every Euro/UK-model advocate: That's fine. Do a training period. But cut the length of law school to 2 years or 2.5 instead. Or make law an undergraduate program (like it is in Europe). If you think this truly makes sense, then it would require a total reorganization of the legal education model. (And we would be poorer for it.)
Also, if you cut salaries, you'll eventually have to cut hours. Let's be frank: it's a straightforward deal - you sell your life to biglaw in exchange for money. They take that life, make a good amount of money themselves, and give you what they think is sufficient to keep your life. If the price starts dropping, we will all begin rethinking the bargain.
you guys are retarded - firms are supposed to have been training their first years anyway - now they are just paying them less. they just put a nice package. oh wow, you get to follow around more senior lawyers and learn from them. I'm sure these lawyers will be just as happy as they were before to train you (sarcasm).
Please remove post 91.
It would have been down ages ago if "jews" had been repalced with "blacks."
They said "prevailing market rates" for 2 reasons:
1. The e-mail was sent to all incoming associates and DBR pays $160k in Washington and Chicago but $145 in Philly/NJ. So there are different prevailing rates in DBR's markets.
2. By using that language they are leaving themselves an out if the "prevailing rate" is less because other firms cut salaries.
Sure, I guess it's possible they'll never raise salaries at all but I really doubt it. How would they keep anyone once the economy turns around if they're paying that much less? I think it's far more likely that some of the smug idiots on here mocking this plan who have been deferred until January or later will never start.
-Incoming DBR 1st year
I agree with 36 100%
Even before the economic downturn, DBR has been very conservative. This is another very conservative move to keep the firm afloat and boost its reputation. Good for first years to at least make money and LEARN how to be a lawyer before they start charging the clients for hours of revising research memos. Sounds like an awesome business practice ahead of the curve! Congrats to DBR for thinking of it, someone there has their thinking cap on tight.
92 - the firms in philadelphia that are doing well right now are the small to mid-size firms who are also offering great legal minds and talent at a fraction of the big firm rates and starting their first years at 75K. at the end of the day, whether or not you got a 3.8 at villanova or a 3.4 may make a big difference re whether or not you get a summer associate position at a big law firm, but doesn't always make much of a difference in a court room.
giddy up!
Hey Latham, this would have been much better than firing half your first years
I wish I had taken Drinker Biddle over Latham.
Thanks Dave Gordon.
-Lathamed 1st year
what da hell is a drinker biddle, dats da dumbest name for a law firm i eva heard. Dese first years have been T-boned.