Profitable Law Firms Don’t Do Deferrals … For the Most Part
This isn’t going to come as a galloping shock to most people, but it turns out that the firms that are making the most profit aren’t feeling the need to defer their incoming first year associates. Am Law Daily reports:
The only top ten firm that is making deferrals mandatory this year is Schulte, Roth & Zabel, which is requiring all new associates to start in 2010.But the rest of the top ten most profitable partnerships are taking a different path. Wachtell, Lipton, Rosen and Katz; Quinn Emanuel Urquhart Oliver & Hedges; Boies, Schiller & Flexner; Sullivan & Cromwell; Paul, Weiss, Rifkind, Wharton & Garrison; Kirkland & Ellis; and Cleary Gottlieb Steen & Hamilton are starting all of their associates next fall as originally scheduled.
Congratulations to the incoming first years lucky enough to be heading one of these firms in the fall.
But it’s time to learn an important lesson about the difference between “revenue” and “profit.”
More after the jump.
If you look at the top ten firms in terms of gross revenue, the picture is very different:
When it comes to the top-grossing firms, the number of firms avoiding deferrals is far smaller. Of the top ten Am Law 100 firms by revenue, only Jones Day and Kirkland & Ellis will be starting all associates on time. Skadden, Arps, Slate, Meagher & Flom; Latham & Watkins; and Sidley Austin have offered optional paid yearlong leaves, and Baker & McKenzie, White & Case, Mayer Brown, and Greenberg Traurig have pushed back start dates until various dates in 2010.
Are rising 2Ls going to pay attention to such reports when they are making decisions on which law firms to summer at? That would assume that we are living in a world where law students are juggling multiple offers for the summer of 2010.
In the meantime, many incoming first years we’ve spoken with have moved on from second guessing their choice of firms. Instead, deferred associates are worried about whether they will have a job once their deferral period ends.
But people who have been deferred for a full year could be caught in a Biglaw backlog, unless more firms follow the new Cravath model and defers the class of 2010 until 2011.
Profit is good. Let’s hope for more of that.
Most Profitable Firms Are Resisting Deferrals [Am Law Daily]
Earlier: Cravath Offers Voluntary Deferral to Class of 2009 — and Delays Class of 2010 a Full Year
Prior ATL coverage of start dates
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Comments
Where is the Ass of Cravath? Where are Kash's ass lobsters?
15th!
But, but, but ... Pete Kalis of K&L Gates keeps touting how his firm has no debt and revenues were never better, so why all the austerity?
NY to 190!!
Isn't Cravath a top ten profitable firm?
Isn't STB more profitable than Cleary?
@4: 180
How will recruitment be with these firms this year for rising 3Ls?
Word going around is that Dewey & LeBoeuf NY is only giving offers to 60% of this year's summer class. Times are tough...
Word going around is that Dewey & LeBoeuf NY is only giving offers to 65% of this year's summer class. Times are tough...
How will recruitment be with these firms this year for rising 3Ls?
How will recruitment be with these firms this year for rising 3Ls?
8, remember how tough it was to get a good firm job as a 1L summer? It will be the same.
My advice is that you should try to be born black.
sucks for those working for big law that is deferring..i heard that both latham and white and case are deferring SAs..
I am an incoming Associate, deferred until mid-year. I am scared shitless that there will be no job mid-year.
Davis Polk didnt defer, right?
A DNA strand like me is a blueprint for building a living thing! And sometimes animals that went extinct millions of years ago, like dinosaurs, left their blueprints behind for us to find! We just had to know where to look!
A hundred million years ago, there were mosquitoes, just like today. And, just like today, they fed on the blood of animals. Even dinosaurs!
Sometimes, after biting a dinosaur, the mosquito would land on a branch of a tree, and get stuck in the sap!
After a long time, the tree sap would get hard and become fossilized, just like a dinosaur bone, preserving the mosquito inside!
If I am not mistaken, Kash's asslobster is summering in the Ass Cravath.
Using sophisticated techniques, they extract the preserved blood from the mosquito, and - - Bingo! Dino DNA!
A full DNA strand contains three billion genetic codes! If we looked at screens like these once a second for eight hours a day, it'd take two years to look at the entire strand! It's that long! And since it's so old, it's full of holes! That's where our geneticists take over!
Thinking Machine supercomputers and gene sequencers break down the strand in minutes - - and Virtual Reality displays show our geneticists the gaps in the DNA sequence! Since most animal DNA is ninety percent identical, we use the complete DNA of a frog - - to fill in the - - holes and - -complete - - the - - code! Whew!
Now we can make a baby dinosaur!
All summer associates be warned...Law firms lie through their teeth and a promised start date means absolutely nothing, even if in writing. As it does not look as though the expected economic recovery is going to occur anytime soon, it is likely that most firms will be facing an even greater drop in demand for their services in Jan. 2010, particularly from the transational side. Start developing Plan B!
sidley and skadden....VOLUNTARY deferrals? right. sure.
Kash should be proud: http://www.google.com/#hl=en&q=%22ass+lobster%22&aq=f&oq=&aqi=&fp=wrDLO71THl4
She's number 1!
What do they mean "starting as originally scheduled" in the fall? Associates may not have been deferred to January, but got deferred nonetheless at several of those firms. S&C deferred from planned start date of 9/15 to 11/2. That's not nothing.
17, 19
You are making things way too complicated, like most lawyers.
Make a wormhole to the past and kidnap dinosaurs.
Problem solved.
Are you saying that if a firm deferred SAs a year (which is what they told us would happen) that this isn't reliable? In other words, that there may not be a job waiting for us in a year?
What type of plan Bs are people coming up with??
"Congratulations to the incoming first years lucky enough to be heading one of these firms in the fall."
LOL. Congratulations to those with low draft numbers who get to head out to the killing fields first.
Serious props for voluntarily enlisting in unbelievable hours, extremely high pressure, horrible environments of competitiveness, and pay which, while high, is slight compared to many in corporate America who have more money, better hours, better prospects, and better environments.
You gotta love BigLaw.
Nuh Uh uH... whats the magic word.
Nuh uh uh ... whats the magic word.
26 -
No one said it was going to be easy. You don't make 3x what the average American family brings home for light hours, low pressure, and a general climate of cooperation.
- Thrilled to be a lucky one
Elie, this post is idiotic.
There are only two types of firms right now: (1) those that are hurting and admitting it and (2) those that are not admitting it
NY TO 190
NY TO 190
NY TO 190
NY TO 190
COME ON POPPA SIMPSON.... !!!!! IF YOU CAN'T DO IT NO ONE CAN.... !!!!!!!
DO IT
DO IT
DO IT
DO IT
"Make a wormhole to the past and kidnap dinosaurs."
I actually laughed at this. I now feel terrible about myself.
What species is this?
Uh - it's a Velociraptor.
You bred raptors?!
Amen, 26.
Elie, this post is idiotic.
There are only two types of firms right now: (1) those that are hurting and admitting it and (2) those that are not admitting it
Jurassic Park quotes are about as funny as Texas Face AIDS.
I can already tell its going to suck first year, just seeing how competitive, complicated and honestly crazy some of the FAs are..when does it get any better? after a few years? partner? never?
Cleary is doing stealth layoffs.
24
Alternatively, become an initiate of the Logrus and reach out through Shadow with tendrils of force and summon dinosaurs like velociraptors.
Problem is velociraptors breed like rabbits in the southern California sunshine. Fun and hilarity is certain to follow.
Will Weil gross the highest revenue in 2009?
Sometimes when you bring the thunder, you get lost in the storm.
Will Phallus Phalanxes become more common this summer?
Amber references are TTT and about as funny as gay Texan jokes.
20 is right. it does not matter what is said, you are an at will employee and can be let go anytime with zero severance. you are not special despite what Recruiting tells you - you are a tool for partners to make as much money as possible. if their profits slip to 1.9 million from 2 million you will be let go, even if you work hard.
41
No, but I foresee a lot of sodomy in your future.
I was lucky enough to have stumbled into an offer from one of these places as a 1L, and I am thrilled at the prospect of working awful hours in a competitive environment. No, I'm not being sardonic. It's a hell of a lot better than being unemployed and missing rent/loan payments. It's not like I went to law school because I thought it would be a free ride culminating in parties and the good life. I would have gone to b-school for that.
I am constantly being ordered to participate in elephant walks with all of the other male summers, should I complain about this to HR?
Um, Boies is in the top ten only b/c of a settlement that resulted from a 4+ year case, not because of 2008 billing. My friend has been telling me that they've been slow for ages, they spun off the NJ office, and have been laying off, but I guess if they haven't announced deferred start dates they are booming according to ATL. Amazing what qualifies as news on this site.
I am constantly being ordered to work for a fat cougar female partner that likes to dress in a muumuu and flaunt her (heavy) assets in my face. Her gardenia perfume chokes me and I am turned off by fatties, but she is a major league rainmaker so I'm being indirectly told to do anything to please her.
Apparently she hunts male associates every summer. Their careers have prospered.
Should I.... I can't even bring myself to describe it? How desperate am I?
Or should I be a man and report this to HR?
Flat is the new UP.
43- when you say you can be let go at any time despite hardwork, i'm assuming this applies more to people that have been deferred and haven't started yet or even first years? I was always under the impression that the real uncertainty is the deferral and the time period before you start work - but after you secure the position, begin working, as long as you produce excellent work and give it your all you should be fine. Whereas that same principle doesnt apply to summers?? Or are first/second years under constant threat as well?
48-
This is a no-brainer. I wouldn't even hesitate given those circumstances and her track record. Give it to her good and watch your offer come rolling in at the end of the summer (assuming you're a summer).
By the way, I think I know who you're talking about. Is said person in bankruptcy?
This is not quite correct with regard to Kirkland: K & E deferred till 11/16 or 11/30.
Typical Kirkland. The start date is November 30--the Monday after Thanksgiving--and they make a point that everyone is starting in November. In previous years, almost everyone started by mid-October.
Also, this will mean almost no bonus for almost all first years at Kirkland--the review year starts 9/1, and I guarantee they don't gross-up hours for the missing three months. If you're 'lucky' enough to bill 2300 in 9 months, you'll get a big bonus, but the typical 1900 in 9 months will probably get them $5k.
Typical Kirkland. The start date is November 30--the Monday after Thanksgiving--and they make a point that everyone is starting in November. In previous years, almost everyone started by mid-October.
Also, this will mean almost no bonus for almost all first years at Kirkland--the review year starts 9/1, and I guarantee they don't gross-up hours for the missing three months. If you're 'lucky' enough to bill 2300 in 9 months, you'll get a big bonus, but the typical 1900 in 9 months will probably get them $5k.
All the elite Harvard grads running the show at
CravaTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTh
couldn't keep the ship from sinking
Time for CHANGE
I don't get the asslobster schtick. Is there a backstory or something? Why do people keep posting it?
43: Agree except that I would say "likely to be let go". It's a business, no longer a profession. If a partner or associate doesn't produce, he or she is finished. Loyalty is long dead.
Actually the AmLaw profitability numbers are always pretty random. Controlled leaks, educated guesswork -- very few GAAP audits conducted.
Just like your standard AmLaw article, never let facts get in the way of a good hook . . . .
Kash is the one who refuses to talk about her ass lobster, 56. If you want info, get Lat to make her talk.
Lat, did you get a rejection from DPW? you never mention them....
Also on Skadden, did you get a job offer from them? The sidebar, everyone knows, was mandatory and partners asked associates with no families to take it..... finally, correct me if I am wrong, these associate do not have a full guarantee of getting back their jobs in 1 year. You don't seem to that.
I think it better that in times like these
A poet’s mouth be silent, for in truth
We have no gift to set a statesman right;
He has had enough of meddling who can please
A young girl in the indolence of her youth,
Or an old man upon a winter’s night.
__ Binky the Polar Bear
I think you should check your facts again. A few months ago Sullivan & Cromwell pushed the start date from September to November and it might push it further. Adk anyone from their 2009 class.
The rumors around Kirkland is that associate layoffs are coming after the summer associates leave.
I think you should check your facts again. A few months ago Sullivan & Cromwell pushed the start date from September to November and it might push it further. Ask anyone from their 2009 class and they will verify that.
Um, 53, VERY few associates are going to have 1900 hours by review time. That's an average of MORE than 200 hours per month. The only associates who could possibly pull that off are 1) bankruptcy associates and 2) IP associates who are on a case that's going to trial.
53,
Recent events have made clear that past performance is no guaranty of future results, but Kirkland has conistently pro-rated first year hours for bonus purposes to take into acocunt late start dates. I would be very surprised if they did not do the same for the class of 2009.
YOu people mocking Cravath are seriously retarded. Do you think any of this drama affects the firm's sterling reputation with clients? No, it doesn't. It is, was, and always will be the top American law firm, if not at least one of the very top in skill and respect.
What happened at Cravath is simpld. They overhired. By a lot. 2 years ina row. They have more than enough money to go around. They just don't want associates doing nothing. So they need to rectify the situation. Hence, asking half the class to defer this year, at their option, with a great deal, and mandatorily deferring their summers this year. Now, Cravath has an incoming class of about 80-100, an incoming class next year of about 80-100, and then an incoming class in 2011 of about 120 (since you know damn well they arent hiring more than 20 for next summer). And there you go, problem solved.
If you think that any one of the other most profitable firms wouldnt have done the same thing in the same situation, you are an idiot. Every other most profitable firm has a manageable starting class and manageable summer this year. Cravath did not. And part of the reason is because when Cravath gives out offers, you TAKE it, because save for maybe Wachtell, it is the place everyone wants to work.
Idiots
51
Given that you've made a very good guess, I might actually work next to you. Want to take my position?
48
Elie don't try to teach us about "revenue and profit" or anything else. Just report whatever bits of news you can dig up! Idiot.
67-
spoken like a true douche
67, sorry about your $100/sq.ft./year lease for the next 15-years in a soon-to-be half-empty building, bro.
And your assertion that Cravath's offers are desirable is laughable. Their 2007 summer yield was so bad that they had to fill the class with newly-hired LLMs. Their class of 2009 is full of middling grads from TTTs like Fordham and they got mostly transfers from the higher-ranked schools. They did not overhire because of high offer acceptances (use your brain and think about how they could have adjusted for this ex ante). They deliberated hired a lot because they projected their business would expand even more and they could fill the newly acquired floors. Oops. Two years in a row.
Who wants to work at one of these places? Really! There's no future, only long hours of boring crap that used to be done by paralegals. Yes, the pay is great, but it won't last, and then you'll have to find something real to do with your life. New York sucks, as do the people who live work there. Only a complete fool would expose themselves to such a totally shitty place.
"Latham is well diversified."
- Bob Dell
in his email announcing mass layoffs, particularly in NY where 45% of associates have been laid off this year
Of the top 10, only Latham has laid off massive numbers of first years. They laid off more than half the first years in NY after months of reassuring them about their job security. Aye!
Kirkland & Ellis is starting their fall associates one month before 2010 begins.
63, I thought Kirkland had like 17 rounds of layoffs already, as reported by ATL. Can they afford one more?
Kirkland & Ellis is starting their fall associates one month before 2010 begins.
On the Kirkland "November" front, they've had start dates that fluctuate from September to November in recent years. Obviously, in better years, it's closer to September. In worse years, it's closer to November. Not a big deal. Just more travel time after the bar with your summer stipend.
What does this say about firms that kill off 1/3 of their incoming 1st years before they even start?
- 3L formerly associated with Fish & Richardson
#9 - Dewey is not going to no-offer 40% of summers unless they're positive their "peers" will do the same. They are followers to the core and petrified of looking bad. However, you can pretty much bet they aren't going to hire anyone for 2010 summer from NYLS and some of the other schools they usually hit up.
72 - well its not like there is a plethora of options. if not nyc, where else?
Here is the cold truth: very few incoming associates who have been deferred until January will actually start. The firms just picked an arbitrary date in order to delay the inevitable -- revoking offers. Expect calls in early September deferring the start date even further and/or revoking offers.
Firms simply cannot handle new blood right now, and January coming around will not magically make things better.
As others have mentioned, make a plan B, because you can no longer rely on starting in January.
New York to 225K!!!!!
63 & 76 -- Kirkland & Ellis is really slow. I believe they can definitely push another load out through the revolving door.
OCEANS RISE
CITIES FALL
I THOUGHT I TOLD YOU ASSHOLES THAT QUINN REMAINS
48, haha knew it! She is a dick troll!
-51
75
I guess Kirkland's gotta make room for the newbies by booting a few dozen associates.
Won't firms starting in November or later (basically, all of them) wait to do more layoffs until after bar results come out? Failing the bar is a really quick and easy way for firms to rescind offers for a fairly legitimate reason. They should wait to see how many first-years they actually have to take on before firing current associates.
71- they did want to increase their classes for firm size considerations, but FAR overshot that number. they are not shy about hiding that fact. And no they didn't hire TTT's just look at their stats. An OVERWHELMING percentage of their recruits are all from top 10 schools, which is far more than I can say about ANY other firm save for Wachtell and Sullcrom.
Fact is, students will continue to drool over getting a job there, and that's it.
Yeah and you are right about the oops. It was a big oops. Twice. And now they need to rectify it. And are doing so pretty responsibly.
Once again, you are kidding yourself if you think any other firm who overshot their hiring by almost 50+ people over two years wouldnt be doing the same thing.
74--Just for the record, Proskauer also laid off most of its first years, sooner (within 8--10 weeks) and with less severance than Latham. Although it may not be in the same league as Latham, it still is a BigLaw firm.
Come on 74, there just isn't any evidence that Latham laid off anywhere near that many first-years.
Quinn Emanual as a top firm!!??? Are you freaking serious!!! Good luck to all their first years in the LA office who get to watch the mail lady with her ass literally hanging out. Nice environment to start your career as a professional!
Haha for the most part.