Elie just wanted to write "low balls" in the title.

first

How far up the (generally meaningless, yes I know) vault rankings will these pay cuts go?

Strange firms do all these weird things to accomplish what paying by the hour does perfectly. Guess that's too blue collar-ish (or contract attorney-ish?) to do.

Every kiss begins with Kaye.

Suck it, Mystal.

Typical KS screwing over its associates yet again.

I'm completely fine with law firms cutting low billers' salaries. It's about time that those who are working the hardest aren't restricted to a good bonus economy in order to see a difference in take-home pay. Notice that I said "good," and not "great," because in the latter, everyone gets the same bonus at the end of the day. I understand that there are several talented lawyers who just don't have the work because the work isn't there in their field, but they should be happy to take a pay cut while they coast until the next economy that needs there services.

Typical KS screwing over its associates yet again.

1600 hours? In a year? Wow, I need to go to KS.

Second 8.

7 - How is paying for performance screwing them over? You don't bill you shouldn't get paid. Simple.

Lucky for the KS people - thank your lucky stars. You could be at a firm like DLA. We cut everyone's salaries, including those who were massively under budget and those who were above budget. All DLA did was encourage overperformers to take their foot off of the gas. I now regret busting ass the first months of the year, so that I would get the same pay reduction as some a-hole who is 400 hours under budget.

But I'm not bitter.

This would never happen at Latham.

-LATHAM SECURE

Seriously, that's a 9-5 for a really good salary. I'll take a 20% pay cut to work 1600. (And I note that if you actually make 1600, you get full salary.)

If I'm a partner and have two associates, one of whom was on track to hit their hours and one who is getting the pay cut, explain to me why I should give any assignments to the one who got their pay cut.

16: Why would you care? The $16g is not really going to affect your bottom line.

Even though the information laying out the cuts is accurate, the spin presented appears to have come from a KS business development mouthpiece.
Here's one affected associate's take on how this all went down:

1. Even though the determining factor for salary cuts is hours, the admin partner who broke the news could not tell us the threshold number of hours (May 31 was the cutoff) nor by how many hours we fell short. All of my questions were met with mealy-mouthed non-answers.
2. First and second years, who have the least control of their work flow and the largest amount of debt, were hit the hardest. Total take home pay for a first year = $144K.
3. Pro bono does not count towards the 1600 hour threshold.
3a. Kaye Scholer's commitment to pro bono is lip-service. This is unfortunate for many reasons and in no way a reflection of the work put in by the firm's Pro Bono Coordinator - a consumate professional and a classy human being.
4. Rumblings that this was done to claw back some of the salaries from Real Estate and Corporate, two departments that have been slow since 2008.
5. Hey summers: if you are still seriously considering RE or corporate you should probably kick Barry Wilner in the sack right now and get your termination over with. The alternative is a long drawn out process that involves no work and lots of paranoia.
6. We all concede that this policy may save KS jobs in the short term.
7. Transparency is not the Kaye Scholer way. No warning was given to KS associates with low hours to pick it up or risk getting a salary cut.
8. Believe me, we will all hit 1600 hours. Hey clients, you might want to ignore the not-so-subtle implications of what I just wrote.
8a.. I swear on Evan Chesler's hairy ass, the billable hour is not dead. At least not on the associate side.
9. We just suffered the "forced attrition" of 30+ associates, layoffs of 2 first years in corporate, a retroactive bonus policy for 2008 that snatched $20K out of the pockets of at least 10 associates. Next up: no bonuses, salary freezes, salary cuts across the board, year-long delayed start dates, all of the above.

16 - because you don't care much about the $100?

16, not everyone is out to get you

Is this even legal?

This is terrible news for median Dozo kids.

I see this as an open invitation for the low billers to slack off until next year, not an incentive to make up hours between now and then. Sounds fine to me.

six figures for 30hours/wk, poor guys

Since the total hours threshold is based on a full annual basis (as opposed to a strictly going-forward basis), and is effectively putting a retroactive reduction of salary on the first half of the year's work if the 1600 is not met by the end of the year, does this in any way run afoul of any employment law(s), by virtue of the *effective* retoactive taking of salary already earned and paid? (i.e., it's not as if they're saying, "800 hours for the next six months, otherwise a 20% reduction" - this instead is 1600 over full year, half of which has passed, which effectively poses a retroactive effect without notice on the past six months' work and salary).

Yawn.

Man fuck this policy. I am on pace to bill over 2,000 hours this year and the same slacking douchebag that bills 1,600 will earn the same as me? No fucking way. I will just lay back for the rest of the year and bill the bare minimum and hoard the overlapping work in case a new round of layoffs commence.

Wow. For once Kaye Scholer is a leader on compensation issues. Most NYC firms will have similar reductions in place by year end.

I heard Cravath is reducing to 145k after the summers leave and before OCI starts. You heard it here first.

I could see that, 29. It probably needs to happen to get the rest of the V50 to move.

All of you that believe this is not a bad deal because it means you only need to work 9-5 to get a good paycheck must all be law students and should go elsewhere. If you were an attorney at a firm, or had half a brain, you would know that averaging 32 hours a week is not the same as averaging 32 billable hours in a week--you could bill 250 hours in one month and bill 50 the next month. You also act as if this was a career choice. If the work was available these attorneys would be billing far in excess of 1600 hours as they have in past years. The fact is Kaye Scholer does not have the work to support the number of attorneys it has.

This was not limited to associates. I've heard that they cut counsel salaries also.

27- Maybe you should be a team player and throw some of those hours to the guy in the next office

I cant believe Elie is still spouting Vault rankings BS. Where do Latham and White & Case fall?

31: I'm a 4th year on pace to BILL north of 2400, which is my average over prior years (high point was north of 2600). I know the difference.

1600 hours is part time work. For $144k? (Actually, $160k if you hit 1600.) Not a bad deal. And lots of time to do pro bono if you want experience. (Don't give me "it's not compensated"; the 1600 hour threshold is compensation enough.)

Serves you first years right...not producing enough billable work and all. Wait a second...

The OMG Slacker label is pretty tiring. There are plenty of us first and second years hounding our work assignment people, partners we know well, etc. for work. It isn't our fault our partners can't generate work.

Well, at least my salary hasn't been cut (yet).

YOU ARE ALL IDIOTS

STILL SKADDEN SECURE

Anyone who complains about getting paid $144k for billing less than 1600 hours is not cut out for their job. I'm a paralegal at a big law firm and billed over 2,000 hours last year. Have to pay your dues before you can sing the blues.

The wave of new policies, such as this one, that tie associate compensation at all ranks more directly to bottom-line profitability aligns the economic incentives of associates much more closely with the economic incentives of equity partners (although very very likely just to the downside).

That's a descriptive observation, not a normative judgment.

Whether you like it or not, think its moral or not, thinks its fair or not, I do believe that that's true.

Now, the big difference here is that associate policies are a one-way ratchet: down. No equity-like upside for solid, high-billing, high-quality associates if the economy were to rebound tomorrow. And that's a big damn difference, no doubt. BIG DAMN DIFFERENCE.

If you don't like that, though, get your own clients or switch to a game the rules of which you find more to your liking.

Sit down with a pad of paper, a pen and a brace of reality and assess your next-best option, all inclusive of comp and QOL, in light of your skill set, credentials, education, drive, connections, etc. If there's something better than law - go for it. I wish you the best of luck. I run this calculus pretty often. I've stuck with big law, so far, but I keep running the math because I don't know that I will forever.

(And as a (m)(p)aternalistic comment - I highly recommend that you save / pay down debt as quick as you can or can stand, as nothing else will change your math quicker. Take that advice or not; I don't care, as I don't have a dog in your fight. I think it's good advice, but I fully expect a bunch of "yoodontunnerstan" comments. I may or may not understand, but I definitely don't give enough of a s*** about your debt to do more than say: pay it down and save as quick as you can. )

In my opinion, the legal compensation / recruiting / education system is pretty screwed up and irrational. It doesn't make sense. The "apprenticeship" structure that some firms are moving to makes more sense to me, but only if it can force down law school tuition down the road. I don't think anyone knows how the "system" writ large will hash out down the road, but it needs to change. I do know, however, that a lot of particular, individual human beings will be crushed in the gears, metaphorically, as the transition takes place.

Reading comments on this site where people stridently rail that they deserve to keep the gains they've made in the past, and that partners who want to change that are immoral or greedy (or, God forbid, opening themselves up to promissory estoppel claims), makes me feel like I've wandered into a UAW union meeting circa 1980.

The arguments are short-sighted and untenable in the face of economic reality. Just like the labor arguments that put the auto industry where it is. It's your right to argue your points, of course, but it's a bit gauche to do it from atop a self-constructed moral high ground that doesn't have much basis in anything other than one's own self-interest and self-regard. I'm not saying that the partners you're, presumably, arguing with are on more solid ground, but I'd call their arguments gauche, too, if they tried to couch them as other than what they are.

For context for my comments, I'm an associate who's practiced about 6 years at a large firm.

35: I really hope you don't work at KS since I thought the firm actually did a pretty good job of not hiring douchebags. But I guess mistakes are made...

not in KS, but our firm is quietly doing the same thing (not announced just yet, but will be in a couple of days). i dont have any complaints about the low threshold (ours is 1750), but the problem is that our partners are slicing and dicing through our hours. our threshold is based on the number of hours billed out to the client (which is a royal screw job). i am on pace to bill around 2000 in a slow area, and i doubt that my hours will survive beyond 1700. partners are loading up the bills with useless review, second review and final review time, that is after a senior associate takes a look at it a couple of times. we lowly 2nd and 3rds get whatever hours are left. on one project, i billed over 50 hours, and just show my client bill report and low and behold, 8 hours were billed to the client. the rest was partner and senior hours. now, either i am way crappy or this is a load of shit. well, since i worked for the client all through law school and did this on the client side, i doubt that i am shitty. i might be, but my money is on the pathetic piece of shit partners that dont know how to find work and instead freeload hours off of associates.

oh fucking well. i have a paycheck. off the soap box and have turned off the whining machine.

to the paralegal that 'billed' over 2,000 hours last year: congrats, 90% of your time was probably written off. you should be proud, way to pay your dues.

BINGHAM SPREAD THELEN BUTTCHEEKS SO I CAN SMELLS THEM JUICY CRAVATHS!

I bought my white gold earings at Kaye Sholer. 14K Diamond Pendant, only $299

Any firm that uses its associates as downturn fodder is TTT. How much is this really saving partners? 2 grand on a half mil each? Douchebags.

Even PE must admit -- very few firms, and I mean VERY FEW firms have the Global Resources, reputation for quality, and Practice Diversity of Kaye Scholer LLP.

41: No, I work at a place with work. Of course, whenever there's bad news about my firm, my DB "friend" from lawschool at KSemails it to me, as if I didn't know. I'm not reciprocating because I'm above that.

At any rate, you're missing the point: If you're a KS associate who thinks you're being screwed, then you should get out now and go do something else because you won't make it in this business. Take the $144k, and use your spare time to make yourself more marketable down the road (i.e., write something industry-focused or take a pro bono case where you can get on your feet in front of a real judge in a real case with consequences). Those who do that will be running organizations (firms, non-profits, or governmental departments) in a generation. Those who don't will be former lawyers doing whatever they fell into after they washed out of BigLaw. There's no shame in the latter, but it's probably best if you recognize which you are now.

--35

(To the tune of Celebration)
Fun-Employment rocks To-Night!
Fun-Employment rocks To-Night!

(Deep voice) Its Fun-Employment, Fun-Employment to-night!

BigLaw Rocks! Thanks for the 3 month all-expense paid vacation. Working's for Suckas.

Kaye Scholar is never afraid to think outside of the box and set the pace. That's the kind of attornies you can expect from Kaye.

Bravo Kaye, Bravo.

13, I agree DLA has screwed the pooch. As a DLA associate well above pace, I feel as though the firm's management has let us down. I wish we would have adopted a policy like KS. Frankly, anyone not on a 1600 hour pace should have their pay cut. DLA should cut more corporate and transactional associates. I had the opportunity to jump to a smaller litigation orientated firm a little over a year ago. Wish I would have taken the opportunity. Most of the litigation associates have plenty of work but are discouraged, merely punching the clock and looking for exit strategies. Not sure why anyone would want to send big game litigation to a firm that cannot keep the people who will be doing the work happy. DLA simply sucks!

The Real Question is, which is ranked higher - the Howrey Acadamies or UPenn State-Philly Campus?

37 - Take a look at 43's comments. I am generating plenty of work, but not for first and second year attorneys who do not add value or are grossly inefficient. Multiple clients have asked me not to staff new matters with junior lawyers. Firms need to find a cost effective way to train you so that you can add value. That probably means a continued downward adjustment in salaries and smaller class sizes. It also means you need to invest a substantial amount of non-billable time on your own learning your craft. I spent 5 to 10 hour per week doing substantive reading in my area my first few years. It paid off. I frankly would like to see the junior attorneys I know spend less time planning expensive vacations and weddings and more time honing their craft.

Not all people billing less than 1600 hours are slackers (There's always an exception). If everyone in your group is billing 2500 hours and your billing 1000, you're either incmpetent or a slacker so I have no sympathy for you. When everyone around you is billing 500 and you are too, then it is a failure of the partners. I know of people at KS who billed over 2000 hours last year, but because they missed the hours cut-off by around 50 hours at the end of May got their pay cut, even though they've already reached the 1600 annualized amount.

The pay cut is for everyone, not just first and second years, although the cut for third years and above is only 15% (you all really need to learn how to do math - 20% reduction of 160000 leaves you with 128k, not 144). A bigger question that wasn't addressed was what happens to people whose salaries weren't cut because they made the cutoff, but then there numbers tank? Do they have to pay the firm back or do they keep the money, even if they end up billing less than someone who didn't initially make the cutoff? Of course none of us know because the firm was shady like always and didn't put anything in writing. Heck, they didn't even talk to the people who made the cutoff. The lack of transparency will come back to haunt them when the market turns around. People don't forget stuff like this.

And btw, stealth layoffs have been going on throughout the firm regularly in almost every department except perhaps bankruptcy.

Were all affected associates personally informed? Is this just in the NY office?

Outside of litigation, KS associate hours expectations have never been quite so demanding as a lot of high powered NY firms...

1600 billable hours? They have it good at KS

I think the 1600 hr mark is fair -- no way you're gonna make hours at that rate at this point in the year.

Cutting first year salaries by more than everyone else is bs though. First years have not had time to build a network of partners/sr assocs from which to get work. Very few of their contacts are old enough to be in positions to bring in the type of big business that will pay big law rates. I am positive they are show up for work and stress out just as much as any of the others. And they make the least amount of money. Is that extra 10K they're skimming off the top of first years' salaries really necessary to stay afloat? If so, this firm might as well dissolve now.

It's not just paycuts for associates and counsels, there are counsels being laid off right now, so the layoffs have not ended at Kaye Scholer. Ain't it wonderful to be in BigLaw.

55: Try again. A 20% cut for the back nine works out to 10% of the total (yes, 10 is half of 20). Still $144.

Thanks for playing.

40-- Union organizer here, just spectating the Biblical woe coming at you lawyers.

American unions and the auto industry would still be backbones of our economy if not for globalist elitist lawyers creating globalization.

The good karma for us union people is that law work is now being relentlessly outsourced overseas.

So, 40, do not sniffle when you have to move to Bangalore to keep your job. It is better than being beheaded, which is what American workers need to be doing to lawyers right now.

51: When the economy is in a boom transactional cycle again, are you going to willingly have your pay cut and suggest they cut litigation associates. You are part of a firm...you reap the benefits of the high billing transactional work in boom times, and have to carry more weight in down times. So is life. Otherwise, go to the litigation botique, but be forewarned, your pay will be below market when the transactional work returns.

42 - I have seen, and been appalled by, the practice of partners/billing attorneys stealing time from junior associates, even when the economy was strong. People are becoming more aggressive as the work slows and they need hours. Junior associates- avoid these people if you can. I know at least one junior asociate who was thrown under the bus and laid off, and I suspect part of em's selection for the lay off had to do with "efficiency."

to 37 and anyone that thinks like you:

I don't understand this "clients ask us to staff new matters without Jr. associates"

Why do clients give a flying rats ass about jr. associates being on matters? I don't understand it, it defies reason. Basically, even if a Jr. takes 50 hours to do a matter that should take 5, by the time the bill gets to the client, thats generally all the client sees anyway. Any billing partner worth his salt will avoid sacking to many hours for ANY project on a client, even if it meants 80% of your time wasn't billed.

The only explanation I can think of is a whole bunch of in house guys from TTT firms and schools are bitter people with halfway decent educations can command half their salaries and are giving their firms bad advice accordingly. Its one thing for a firm to bitch and moan if they have jr. hours making up 3x more of the bill than anything else and they should have taken less time. But for doc review or for simple due diligence review of filings, things that isn't worth 600 dollars an hour, they should not bitch about paying jr. associates fees.

Just retarded. In the many industries I've worked with outside of law, I've never seen clients ever bitch about who does the work, just the final bill. I swear...

64: Because clients aren't stupid.

"Multiple clients have asked me not to staff new matters with junior lawyers. "

Translation: This is how I justify hoarding work to junior associates.

What would bother me the most is actually making the 1600 mark come December and having gone without the money for half the year. Why should the firm have that money as an interest-free loan for six months? Ridiculous. At the very least, the firm should revisit hours in a few months rather than at year's end.

Also, in this economy I wouldn't trust any law firm as far as I could throw it to actually give the money back. Also, when exactly will the firm give back the money? They'll probably implement some new policy in the meantime that makes it more difficult to achieve the 1600 hours, too.

"In my opinion, the legal compensation / recruiting / education system is pretty screwed up and irrational. It doesn't make sense. The "apprenticeship" structure that some firms are moving to makes more sense to me, but only if it can force down law school tuition down the road. I don't think anyone knows how the "system" writ large will hash out down the road, but it needs to change. I do know, however, that a lot of particular, individual human beings will be crushed in the gears, metaphorically, as the transition takes place. "

Pretty much.

I accept that I'm a rat. I just wish to god I knew how to get the **** off the ship.

Many associates take a 20% pay cut to work part time and are expected to bill AT LEAST 1600.

The ship be sinking...

Result:

Phone: "Ring, ring."
Junior Associate: "Hello?"
Client: "Are we closed?"
Junior Associate: "Yes."
Client: "Thanks, bye. Click."

Junior Associate Time Entry:

"Conference call with client; research questions presented; attention to post-closing matters - 7.1 hours"

Junior associate well on his way to making 1600 and getting his money back.

Good result?

Most clients, including us, have magic new billing systems that allow us to control what attorneys are allowed to bill on the bill, and to cut time billed unilaterally. We make this part of the agreement up front. so the partners may not be lying.

Note the technology enabler is only part of it, historically there were many clients that wanted the name partner (eg Liman) and had to take all sorts of Paul Weiss wannabes to get Liman. That still goes on, but to a lesser extent. The Structured Finance and other deals -- people were oblivious, it was other peoples money and the legal fees were rounding errors. The big clients out there now are like us. We watch the timekeepers.

In general, we allow (if not encourage) more junior attorneys to bill on a file if 1) they are diverse and/or 2) we like them and are willing to pay to educate them in our business so they can be more useful in the future 3) they are brilliant.

While not all the less experienced attorneys on my approved list are in category 1 or 3, I have found no dearth of highly qualified diverse attorneys who also are in category 2. Many in 3.

The reason we do this is because the Board and the General Counsel actively encourage us to promote diversity in our hires.

I go to this trouble, because two or three years from now, when something comes back up i will have someone at the appropriate level, whom I trust and have worked with before who can take the matter without a lot of supervision.

on the other hand, it is not a meritocracy, for example -- we had one file where a BIGLAW firm billed $50000 for a memo by a supreme court clerk. It was a brilliant memo, best I have ever seen. worth every penny.

Our head of litigation (since departed under a cloud) went ballastic (it was not her former firm) fired the firm, hired her own firm, which ran up a huge out of control bill in the millions forcing settlement at enhanced nuisance value. The Supreme Court clerk is now an AUSA somewhere.

What was your argument again 39 ? Oh yeath, that's right. Now I know why you are a paralegal and not an attorney.

14: LOL. That was fucking hilarious.

14: LOL. That was fucking hilarious.

We're quite talented at bringing you last week's news.

Number 71 -

I’m truly inspired by your words. Amazing. As far as quotes go, number one in my heart is MLK’s words:

“I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character.”

********************

Number two in my heart, thanks to your wisdom and moral courage, are your words:

“In general, we allow (if not encourage) more junior attorneys to bill on a file if 1) they are diverse and/or 2) we like them and are willing to pay to educate them in our business so they can be more useful in the future 3) they are brilliant.”

I’m sure “content of their character” is part of your “diversity” cross-check.

********************

I look to wisdom where I find it, so, my number three all time fave quote, which I look to as a polestar for moral guidance is, again, your words (2 of the top 3 - you’re a hero of mine now!):

“The reason we do this is because the Board and the General Counsel actively encourage us to promote diversity in our hires.”

What moral courage, what spiritual fiber, it takes to take a position in favor of hiring “diverse” folks because your bosses tell you to!!!! You must of felt like you were the first person across that bridge in Selma when you drew the line with your GC and defiantly said, “I hired this guy because you actively encouraged me to.” WOW!

Speak truth to power you have, indeed. Chills up my spine from the sheer daring of it all on your part.

If your board and GC had encouraged you to barbecue live baby seals, I’m sure you would have taken a stand. Because that would be wrong.

********************

For the sake of providing a clear model to “clean livin’” for the rest of us, please identify yourself and your company, so that we can (1) put your photo next to that of the man in Tiananmen Square who stood down a column of tanks, and Nena, who just died in Iran, as defenders of freedom (surely your iron will to follow what your board and GC tell you to do, in the name of freedom, rank on par), and (2) see the living example that is your board (surely a diverse mix) and your GC (surely not a white male) (your board and GC, I trust, walk the walk they talk to front-line soldiers like you).

********************

I like diversity, too, so have taken the time to learn what the word “koan” means. Your words below are now my favorite koan:

“on the other hand, it is not a meritocracy, for example -- we had one file where a BIGLAW firm billed $50000 for a memo by a supreme court clerk. It was a brilliant memo, best I have ever seen. worth every penny.”

You illustrate the fact that your company does not award work on a meritocratic basis by giving an example of merit (“brilliant memo, best I have ever seen, worth every penny”) being rewarded.

That makes no sense whatsoever. I suspect that means that (1) you made this blog post without outside law firm support or, (2) you had outside law firm support, but you went with (your words) a “Category 1” preferred junior associate.

********************
To 71 - this whole thing has been snarky, but, you deserve some snark.

Compare MLK’s words against your own.

Can you square that circle?

Go back and read the “barbecue live baby seals” line and reflect on what you would or would not do at the command of your boss, because nothing in your post indicates that you have so far.

Regards.

The headline should be revised to "Kaye Scholer comes up with ridiculous retroactive policy based on a completely arbitrary determination as to which associates may not annualize 1600 hrs (we all know in this environment it's impossible to predict) and force these suckers to take bigger paycut so everyone else can be let off the hook". For the record, the discussions have always been about lowering all non-partner salaries not about penalizing lowballers. The spin on this is unbelievable.

77; so you would prefer an across-the-board 10% reduction in salaries? What the hell are you complaining about...if you are billing 1600+, your salary isn't reduced. If you are currently on pace for less than 1600, you can still make up the $ at the end of the year.

Every firm needs to save cash; the method by which they do so is what's important. If you'd be more comfortable with an across-the-board cut, then that's fine, but it strikes me as a bit odd. I don't see much "spin" here; the policy (from what I read in the WSJ) is pretty straightforward.

I am a legal secretary and I think you guys are all so pathetic. I am happy with my little salary and my conservative way of life. Most of all, l am thankful that I am not a slave to the billable hour.

I am a legal secretary and I think you guys are all so pathetic. I am happy with my little salary and my conservative lifestyle. Most of all, l am thankful that I am not a slave to the billable hour.