Sham WOW!!

Funny how the NY Market seemed to be hit the hardest, yet the majority of NY firms have handed out respectable offer numbers. Absolutely cannot say the same for Philadelphia -- Morgan, Pepper, Dechert -- when such firms were supposedly doing well. For shame.

Another nail in the coffin for MLB

Either Morgan is hurting badly or its being smarter than other peer firms. Perhaps this economic downturn will affect the legal industry even harder than most seem to expect and impact a larger group rather just the classes of 09, 10 and 11.

Former Thelen and current Orrick partner The Glass Cock here, waiting for that shitbird of a drag on PPP Partner Emeritus to make an inane comment about peer firms. What is peer to a Depends diaper, you old fool?

heard about this a while ago. old news by now. glad you guys finally managed to put it up. i guess this is no longer the place to come for breaking or current news.

ELIE-get on Pepper!

2- More like Slap Chop!

Morgan Lewis has pulled a McDermott Will. Ouch!

A little advice:

1Ls drop out now

2Ls consider dropping out and asking for a tuition refund from your school

3Ls, kill thyself

As ATL grows in influence (ie, firms providing statements to ATL when they lay off associates) it moves toward nurturing its symbiotic relationship with firms. Part of this process is waiting to report tips to avoid angering firms.

How you like me now?

Is Morgan Lewis going to cut all their untalented and inexperienced junior associates/doc review monkeys? You would think they have to be next- no way a client wants to pay high rates for their work. I think it takes about 3 years before they learn what a Complaint is.

How you like me now?

12 - Or perhaps, contrary to the MSM, they verify before reporting.

12=racist. Please moderate.

Trading Places is still one of the greatest movies ever. Present-Day Elie, how about you and I trade places? I'm unemployed and homeless, and you're employed ad home...full. Please?

17-Please stop defaming other posters

11

What about recent graduates burdened by loads of debt and deferred by craptastic firms?

For those with longer memories, Morgan Lewis was one of the very few firms to pull back offers during the 2001-02 recession. A leopard doesn't change its spots, it seems.

I like leopards.

Hopefully, these people will be able to drop out of law school and not be charged with any fall semester tuition. DO NOT CONTINUE. With a worthless "letter of explanation" explaining your failure to secure an offer, your career is absolutely finished. It doesn't matter what school you went to, you will essentially be on the same level as an unemployed BLS grad who pulls tricks to make her monthly Sallie Mae payment.

Any word on Bingham offers?

Sounds like this firm is the next one to go out of business...

Dear 10 (Morgan Lewis v. MWE) -- You, my friend, are an idiot. You quite evidently have no insight into McDermott's hiring intentions this year, and probably are a no-offered troll from McDermott past. Oh yeah, you're also fat.

Dear 18 ("I am future Ellie") -- You too are an idiot. But a funny idiot, nonetheless.

What happened to the summers at Saul Ewing?

has anyone ever thought to call the firm "morgan lewis & buttkiss"? also, 26, please don't refer to people as fat ... it offends me.

thanks for your time,
guadelope.

5 offers out of 23 in NY office.

6 out of 17 in DC

im absolutely sure "Marianna" is a male 1L at Georgetown who thinks they're cool because they were a paralegal at dewey & leboeuf before they went to law school

Tracy Morgan Lewis = EPIC FAIL

DOJ SECURE

Are firms who have yet to make their offer/no-offer announcements simply waiting to see if their revenue streams change in the interim? You would think if they were simply waiting for other firms to set the lowest possible bar for offer rates, the Morgan Lewis debacle would have then led to a cascade of firms no-offering the vast majority of their summer class. Or maybe the cascade is shortly forthcoming.

Is Kash single?

You no-offered 74 2Ls? Seriously? You were oversubscribed by 300%? What kind of monkeys are running this zoo?

31 - "Marianna" is a washed up thirty year old BLS grad with 150K in debt who has dabbled in the porn industry, and has worked as both a legal secretary and file clerk. You my dear have no idea of the hell that awaits you after graduation if you are no offered.

31 - Marianna is a washed up thirty year old BLS grad with 150K in debt who has dabbled in the porn industry, and has worked as both a legal secretary and file clerk. You my dear have no idea of the hell that awaits you after graduation if you are no offered.

Hey, Elie, why did you delete the "Taxing Stupid People" comment thread?

I predict MLB will follow in Heller's footsteps.

In 10 years, BigLaw will only be contract attorneys doing scutwork; attorneys with 4-8 years experience doing substantive associate level work; and a few partners at the top. No summer associates, no 1st - 3d years. (Maybe some off-shore outsourcing, too.)

Money formerly wasted on summers and 1st years will be thrown at laterals, culled from boutiques or Medium law.

Recent grads of the future will be screwed, having missed the BigLaw gravy train.

Book it.

hmmm, so nice of them to think about hiring those summers who were not extended offers. I wonder if they will reach out to the attorneys they laid off - HA!

Hey- I don't know if I am coming out of leftfield on this one, but does anyone else think the ship be sinking?

I got on the Biglaw gravy train before the crash, even though I had no business being on it!!

Regards,

Katten NYC pussy pass Associate

The Partner Emeritus hybrid tough love program strikes again! I choose to emphasize the "love" over the "tough" part though.

anyone know what law firm mlb has hired to defend itself in the section 90 class action litigation? or did they make the summers sign liability waivers in exchange for receiving the letters of explanation?

Really! Why do you motherfuckers keep pretending to be real attorneys or law students seeking a real job. You're all losers. The easy money is over. Now, you get to work for living. Bend over and take it up the ass like the punks you are.

10: McDermott sucks.
23: Nice boobs.
26: See above response to 10.
28: Yes the the first sentence.
36: See above response to 23.
37: See above response to 36.
42: This ship be sunk.

13, are you also responsible for the firms that are letting their associates start early?

What is the word on Pepper and Cozen? - rumors are that they are following Blank Rome-50% offers, 50% polite no-offers (i.e. 'waitlists' or deferments).

Is Cozen still suing al quaeda for 9-11 or did they give up on the idea that "the insurance companies were the true victims of 9-11."

That is just disgusting!!! Law firms do not give a plain shit about ruining or fucking up the careers of powerless law students and associates. All they care about is protecting their own asses and profits.

I don't know about you guys, but I want my law firm to actually turn a profit. Those "powerless law students" were -- or should have been -- among the top in their classes, and they could've chosen a job outside of big law. They all took a gamble. Only a few "won." The odds stink, but what can you do?

I always thought 43's pussy-pass meme was moronic, but a look though the NY female associates at Katten reveals a few that are, at least, lawyer hot.

Pepper offers went out yesterday. Several no-offers in a class it had already cut in half from the year before. Unsure of exact numbers yet.

49 is right, Pepper no-offered half the class

54 - They lied to the summers.

54-56: anyone know the exact numbers?

this is the same shiTTT firm that took on whole practice groups from TTThelen. connection anyone?

Regarding D.C. A reliable source (girlfriend of one of the Summers) has told me that the only offers that went out (1-3) were to prior clerks. There were a total of 3 prior clerks that were also summers.

ANY IDEA WHEN MCDERMOTT WILL BE OFFERING/NO OFFERING SUMMERS?

what does this mean for skaddendc?

61- It means B Klubes, A Sandler and J Randall are getting the last laugh

Things are as they should be. No more than one quarter to one third of a summer associate class should ever be offered. It may seem cruel, but doing so will ensure that everyone works their butt off instead of living it up at the firm’s expense. Those who were not offered can always be hired back as contract attorneys and paid a market rate compensation for what the clueless get paid.

You wanna be an associate at a big law firm? Prove that you really, really, really deserve it or better yet come attached with revenue. There is nothing like the promise of some family or friend promising to swing significant business your way if you get hired. In this economic climate, revenue trumps merit. The merely talented will slave in windowless fire hazards while their intellectual inferiors lord over them because money always wins.

NEVER FORGET THE MORGAN LEWIS 74

The 74 Morgan Lewis no offer losers will not only be forgotten, they will be ostracized after graduation.

No Job
= No Money
= No Way to Join their Yuppie Peers in Upper Middle Class Conspicuous Consumption

Sorry about your shit-paying job, 65. It sounds as if you find it very rewarding.

59: not true.

Look to your left. Then look to your right. Then look at yourself. None of you will have an offer after summer. Bye!

MLB no offer here. They completely f*d us and lied through their teeth about it all summer long.

The firm was too stupid to reduce their summer class size and after they found out what they'd done, they weren't willing to pay $60k/yr (no benefits for this TTT firm) to keep their good name and reward hardworking summers. Does anyone actually think they'll hire a no-offered summer in fall 2010? It's an unpaid deferment program that gives Morgan the option to pick you out of the gutter they're responsible for throwing you into in the first place.

Offers went out in the fall and everyone accepted them immediately, leading to huge summer classes. Fast forward to March 9, Morgan Lewis fired 216 people and deferred the 2008 summer class. At this point they tell the 2009 summers that it will be okay your class will get deferred too and "nothing is going to change this summer." But they knew at the beginning of the summer program that they were going to screw 70% of us over. "The economy" is just a excuse for the firm's poor planning and disloyalty to law students.

I am sorry to hear that 69.

I for one will NEVER FORGET what MLB did to those 74 summers.

The truth of the matter is that first years are selling a product that no one wants to buy. Clients are just not willing pay for first year time and they hate the fact that people right out of law school make $160K a year with no experience and that firms are trying to pass the cost off to them. Clients are hurting and corporate counsel just cannot justify paying for first year time. Sadly we shot ourselves in the foot when salaries went to 160 (and this coming from a person who benefited from that hike). At least MLB is honest and not giving offers to people they know they will not be able to bring on as associates. What's worse being up front and not giving out offers at the outset or giving offers and later saying "sorry but we can't bring you on at this time--keep waiting, we will be in touch."

Hey what's happening?!?!

It's BUSH'S FAULT!

http://www.rasmussenreports.com/public_content/politics/obama_administration/daily_presidential_tracking_poll

@ Dubya - You're a fucking ignorant buffoon - and you're also an irrelevant moron!

GO AWAY - YOU'RE TIME IS OVER!

It's Barry's economy now dipshit - deal with it

LOL!

73 -

Your and you're are two different words. Look them up.

...agree that Dubya needs to get a life tho.

Welcome to the toilet.

okay, maybe if we continue to pound Lat (not in the fudge way, but verbally) that he doesnt know what it is like to be successful at biglaw, doesnt know what it is like to try to find a job in this market, and doesnt know the stress us attorneys are feeling right now that he will SHUT THE FUCK UP AND QUIT BEING A USELESS PRICK AT SEMINARS!! Lat, we dont give a flying fuck what you saw. its all worthless. my friends in nyc thought your bar seminar was a complete waste of time. get an f-ing grip, you are a third rate blogger for a blog that sucks donkey dick.

Morgan, Dechert, Pepper, Blank = Philly's Hall of Shame

Morgan Lewis proceeds to further fuck over the 3/4 of its summers it screwed over by overstating the percentage of offers it gave out this summer in the so-called letter to future employers. They did NOT offer 30% firmwide, and in most offices, it was closer to 20% than 30%. The firm should duly be ashamed of itself for trying to save face at this stage by outright lieing to the legal community.

For all of you law students out there a lesson in law firm economics:

74 new associates X 160K salary =$11,840,000

74 new associates X 15K benefits =$1,110,000

74 new associates X 30K overhead expense = $2,220,000

Total cost of 74 new associates = $15,170,000.00 per year

How to pay for that $15 million?

(1) pass the cost off to clients: they have grown wise to this strategy and won’t pay.

(2) pass the cost off to partners: this is the universal ATL answer for those who don’t realize that firms rely on partners to survive, cut partner pay—partners leave, partners leave—firm goes under (ala Thelen).

(3) Layoff other employees

These numbers are made up (of course) but that does not change the fact that this is the kind of math that every company (firms included) is forced to perform these days. CEOs, Heads of Firms, and I would love to hear your solutions to this problem.

79 - Spurious premise. Seventy-four associates add SOME value, even if they are still an overall and immediate loss to the firm. Nowhere near a $15 million dollar loss.

Also, I don't know if you noticed, but Morgan has been doing your option #3 for quite some time now.

With the personality you've displayed in your post, I'm sure you won't care about this last consideration - but the work atmosphere at MLB must be pretty toxic right now. And that affects work at the firm, whether you care to admit it or not.

This has to be among the best non-peer hybrid tough love yet!

This place is sooooooo going under. I'm betting money that they can't make their fourth quarter debt obligations without either tapping the partners for more capital since they either didn't bill enough to clients or couldn't recoup enough from clients as a result of already completed billing work. Insane. Wow.

80-according to your reasoning a company should operate at a loss because excess labor adds "SOME value." Of course first years add some value, both in terms of billiable time and because they are the future of the organization who will grow with experience to make tremendous amounts of money for the firm. That is the reason why firms have accepted taking a loss on first years. Your reasoning ignores economic reality, what organization can absorb these costs in this economy. If you think that people enjoy laying off employees or not giving offers to summers you are wrong. It is a horrible thing to do and I am sure it hurts morale, but somtimes you have to make difficult and unpleasant decisions. I have no insight in to MLB's thinking but you have to believe that they did this because they had to, not because they wanted to.

79

79 - I was just pointing out how simplistic and incomplete your "lesson in law firm economics" was - and surprisingly so, for someone who apparently isn't in law school.

Based on the inconsistent quality of your two posts, we are unable to offer you the opportunity to post here further. Best of luck on other blogs.

80

Philly tallies:
dechert, blank rome, pepper in at 50%
morgan at 20-30%
does anyone know the numbers for Cozen, Duane Morris, Ballard Spahr and Drinker Biddle?
A penn state student told me that Duane Morris screwed over most of its summers? Are there any confirmations out there?

83- firms other than Morgan Lewis has oversubscribed summer classes, yet they didn't engage in the systematic destruction of the legal careers of 75% of its summers; summers who had enough faith to chose Morgan Lewis over offers from other firms after apparently drinking the mandarin colored Kool-Aid. Classy stuff.

76- Lat graduated from Yale, worked at Wachtell, and is a hot burning chunk of Filipino meat. Not impressed with your anonymous ad hominem attacks.

69 here, still sans offer.

I think 79 is generally right about the numbers, but misses the point of why Morgan Lewis f*cked up so bad. Everyone knows that entry level associates aren't worth their salaries and it's said they don't start making the firm money until third year. So if this is well known, why do firms act irresponsibly and take on such large summer classes in the middle of a recession?

I understand being no offered now is better than being no offered after a deferral year, or fired as a first year associate, but it's a really unfortunate when people with other summer offers choose Morgan Lewis. If Morgan's employment practice is so good, recruiters would have extended enough offers to employ less summers than the year before. I would think LESS summers are needed in a recESSion. From the post, both NY and PH had 23 summer associates, which according to Nalp is MORE than the previous year.

Less offers extended would mean I would have accepted another SA offer, and might have a job right now. Instead, I was told all summer I was doing great work, and now I'm writing this comment on ATL.

Everyone who says the firm is going under is an idiot. Morgan is well managed, but managed by accountants who too easily give in to whiny clients, instead of by managers who understand their main asset is human capital.

Morgan is busy in their labor and litigation practice areas and the business and finance group is picking up. They will need young associates to leverage in 2010. The point is they don't need ME. Simply put, the firm doesn't want to pay 74 x $60k deferment "stipend" = $4.4 million to prevent negative press or keep good on their implied promise not to f*k 70% of their summer class.

Let's face it, I'm expendable and they were just the first firm to figure out how far they could go. They're good at being first too (March 9 - first big firm to defer summer associates; July 14 - first big firm to cancel their 2010 summer program).

Remember: It's about the people.

Morgan Lewis is not going under. They are just trying to make their PPP numbers look good and are being extremely short cited about their business. They have apparently forgotten that people are their greatest asset. In the past 6 months, they have laid off associates with plenty of work, basically told their incoming associates and potential new associates that they don't give a sh!t about them, and are now working their existing associates to death while contemplating significant pay cuts. Other than getting a nice paycheck (for the time being), it can't be a good place to work right now.

ML probably is going under. They've been bidding some pretty amazing numbers in their pitches.

Slaves to accountants as the prior commenter would say.

79 (aka Dipshit Moron) -

You like simple math, here is some simple math. To recoup that $15 million, a firm would have to bill and collect, assuming $300 per hour, wait for it...

about 675 hours from each associate. 1,000 per associate would net a tidy $7 million profit in your scenario. Feel free to play with the equation (74 x [rate] x [hours] = revenue) as you see fit. Then tie a plastic bag on your head and just breath for a while. Thanks.

79 - with MLB's new compensation scheme, the salary expense for new associates may only be 2/3 of the 160k per associate you quote

91 you must be right and law firms everywhere must be wrong and are laying off associates and deferring/denying offers because they just don't have enough room in their bank accounts for all of that money that the new law school grads can earn them.

Clearly you know nothing about law firms. It is well known that firms generally do not break even until an associate reasches her 3-4 year.

83:

a huge part of the reason firms do not break even until the 3rd or 4th year is because of all the expenses incurred to recruit the associate: the entire recruitment process (e.g. recruiters, OCIs, callbacks), and the summer associate program.

in MLB's case this year, those were all sunk costs

*93

-94

I'm not defending MLB's practice, just trying to interject some rational arguments for why they and other firms have done what they did.

Sorry I just stick to what you are used to:

First [x 10]
the ship be sinking
How you like me now?
[insert law firm name] fucked [insert pissed off group] over.
__TTT__

It never gets old.

-79

hey the classics never get old

Well the fact is no other big firm conducted such a blood bath. Every other big firm, including firms with larger summer classes, acted somewhat decently and humanely towards the summers who had enough faith in them to accept summer positions there. Why does MLB deserve a reprieve while other firms are willing to take a chance on their summers?

"Why does MLB deserve a reprieve while other firms are willing to take a chance on their summers?"

Fair enough,

-79

Morgan Lewis has mislead its summers every step of the way the last 6 months. After being the first firm to defer incoming associates for a year, the summers were assured that the summer program would be run as usual, indicating that offer levels would be somewhat commensurate with that of previous years. At the firmwide SA kickoff held in Baltimore in May, while the tone of the week was somewhat more subdued, the summers left Baltimore, after being constantly bombarded by over-the-top firm propaganda and excessive 'toasts to the firm', feeling that so long as they worked hard this summer and contributed meaningfully to the firm, the firm would turn around and take care of them. Then, during the summer, when pressed about offer rates for the summers, firm management remained very evasive, only intimating that while business has not gotten back to normal, maneuvers the firm was undergoing (such as canceling the 2010 summer program, doing away with lockstep) would permit the firm to be loyal to those it had already made commitments to, i.e. the SAs. Rather than indicate in some way that 3 out of 4 summers would ultimately not be receiving offers, and advising the summer class that they ought to start looking at permanent placement elsewhere, the firm continued to paint a rosy picture of how the summers would be handled. Finally, more than a month after the program ended for most SAs, and after dozens of so-called peer firms extended significant numbers of offers to their summer classes, Morgan Lewis proceeds to ruin the legal careers of 75% of its summer associates. This whole fiasco has been wrought with deception, lies, double-talk, and lame attempts to publicly save face. Shame on Morgan Lewis.

The problem with MLB, at least in their NY office, is that they have some partners in leadership positions that have no business of their own.

While we ALL agree that no-offering roughly 70% is an attrocity, many MLB associates feel as though the summer associates are lucky to have been spared the experience of being an MLB associate for several reasons:

1. While the firm laid off several associates in my practice group (Business and Finance), the majority of the remainder of the group works 200+ hour months. Don't get me wrong - we would rather bill more than less hours in this economy. And many of the Business and Finance associates will bill well over 2000 hours this year (and I note that more than a few billed over 2300, 2400... etc., last year), yet they experienced a salary freeze last year, half-bonuses and now are facing the prospects of this new "merit-based compensation system." Let's face it, the new "merit-based compensation system" is a way for the firm to anonymously slash salaries on an associate-by-associate basis and screw us over even more so. We're not stupid. Many, MANY of my peers have already interviewed and those fortunate to have lateralled-in have received calls from former employers asking if they would like to go back to their old firms. Those of us that started our legal careers at Morgan Lewis are regretting that decision.

2. This place gives you NO incentive to do good work or to do a lot of work. See #1, above.

3. As you can imagine, the morale around here SUCKS. As you've noticed, NO FIRM FOLLOWED MORGAN LEWIS' LEAD AFTER ITS MERIT-BASED COMPENSATION ANNOUNCEMENT LAST WEEK. In fact, several firms have announced that they are asking first-years to start early and others have announced that they are hiring! Maybe every other BigLaw firm in America is doing something wrong... but soon enough, we'll be doing it right. NOT.

4. If laying off over 200 staff and attorneys + freezing salaries + halving bonuses still requires additional measures (i.e. the new "merit-based compensation system"), THE FIRM HAS SERIOUS PROBLEMS. Per recent announcements, profits were only down 8% despite the challenging economic times.... So why the CONTINUED need to screw over its hardest working, most profitable associates? Sure, they can continue to take advantage of us, but how will they compensate when THERE IS NO MERIT LEFT IN THIS SHITHOLE?

91 (aka Moronic Dipshit),

Try to bill anyone $300/hour for a first year associate’s work and tell us how far you get. People fresh out of law school and at their first job to boot are unlikely to produce work that is worthy of $30/hour much less your fanciful figure of $300/hour. You sound like a no offer SA so feel free to go around telling potential clients that you will proofread documents for them in return for $300/hour compensation. This little social experiment is guaranteed to end with you tying a plastic bag over your head with a loaded handgun by your side just in case. Now fuck off!

To 102,

Not everyone feels that no-offering 70% of a summer associate class is an atrocity. Some of us believe that this is as it should be. It is a law firm and thus a business, not some kind of secret communist utopia.

I seem to remember a time when law firms gave offers to 90+ percent of summer associates. The times, they are a-changing.

Duane Morris offered 4/12, i.e. 33%

94

That's just not true, recruiting is expensive but it is not the reason firms lose money on first years.

To 104, any thoughts on the rest of 102's post? The majority of the post related not to summer associates.

Morgan Lewis "engage in the systematic destruction of the legal careers of 75% of its summers"

Come on, really?

RIGHT ON #102. COULDN'T AGREE WITH YOU MORE.

Marianna = Lat

I interviewed at MLB and didn't accept the offer - I'd rather give my 2400+ hours to a firm that will actually compensate me for my work. Seems like I made the right decision.

I am not 102, and I am not sure at which office 102 works.

Also, like 104, I believe that the extensive no-offers were fine. However, everyone here has rehashed that plenty.

As for the rest of 102's post, it is completely correct IMO. Morale in my office is terrible. Incentive to do work and do it well is nonexistent. People are seeking other opportunities like crazy, and at least in my group, recruiters continue to call daily. MLB is quickly taking steps that will result in an absolute loss of their best talent.

Perhaps that is what management wants. Maybe they think that all of these steps will help generate some voluntary attrrition, which is the end-goal. However, the people that will leave are those that can generate new employment at market salaries. Contrary to MLB's belief, market salaries are NOT 40%, 30%, 20% or even 15% below the 160 pay scale that exists in firms presently. Some firms have cut by 10%. Most firms have not.

Yesterday a very good friend accepted a new job at a competing firm. Another friend accepted a job at a non-peer, but more prestigious employer. I don't know what MLB is thinking strategically. However, I hope they have some sort of plan. They will realize in 1 year that the best talent has fled, and new talent is not incoming (due to the cancelled programs and no-offers). Who exactly is going to practice the law around here?

So is McDermott planning to extend offers (or no-offers, as the case may be) anytime in the near future?

113- I think MLB is realizing that you can't really judge talent too well out of law school. In the real world, people grow up and mature and there are a lot of things you can't tell just by looking at how well someone issued-spotted on a 1st-year civil procedure exam as a student in their 20s.

I have been out a while and being a lawyer at a firm is a series of stages- the best partners at my place come from all sorts of schools and I am sure many of them did not hit their stride until they were in their mid-to-late 30s. When times are tough it does not make good economic sense to tie up a lot of money investing in young, unproven law students regardless of their pedigree because it is too much of a crap-shoot.

113, 104 here.

Most people tend to over rate their importance. If you are not bringing in revenue, then it does not matter whether or not you stay or leave. This is true across all professional services firms and not just at law firms. Finding ‘talented’ people to get the job done is easy, but getting the business that keeps the staff busy is not. Now that business has fallen off a cliff, it is important to reduce fixed costs because that is how a firm ensures its survival. When the good times return, Morgan Lewis may have to pay more to attract good people, but at least it will be in the position to take advantage of the opportunity by virtue of not going under. In this regard, it is actually in Morgan Lewis’s interest to encourage defectors to make clear their position and to leave the firm. Also, variable wages will mean that poor performers (read: people who are not tied to important revenue streams) will be forced to accept slave wages or else leave the firm on their own accord. Layoffs are expensive especially when senior associates are involved so it is always better if they quit on their own.

Not everyone at Morgan Lewis will be feeling depressed. I am certain that some people will be very happy with the new arrangement. Whilst most associates will see a drastic cut in compensation, there will be those who will watch their pay packet skyrocket. Aside from matching costs with revenue, such a system will also properly reward the top performers while building in a natural feedback loop that gets rid of the underperforming ones. Such a system will also truly be meritocratic as silly ideas like diversity gets subsumed by tangible and measurable metrics like revenue and profits. Everyone should remember that if you do not make money for the firm then there is no reason why you should be there. And finally, the number of hours that you work and bill mean very little in today’s environment where clients insist on seeing results. People who think in terms of hourly rates and total number of hours billed need to grow up. The practice of law will never be so smooth and easy again.

104/116

I agree with you. The biggest problem with a new compensation system that backloads pay incentives into an end-of-year bonus is that it relies on the assumption that associates will and should trust the system. However, what reason do any associates have to trust the system? Logically, every dollar given to an associate in the form of a bonus is a dollar that is directly withheld from a partner's pocket. So, to an extent, it is a bit of a stretch for partners to say to associates: "Trust us. If you do well and provide lots of value, you will be taken care of at the end of the year." It works in other industries because the bonus money given out is money that is not otherwise distributed to shareholders as opposed to management. In law, management constitutes the shareholders.

While I agree that the system could be better, I am not sure that many others see it that way. Put it this way: a senior associate that is extremely valued by partners will be faced with two options: (a) remain in the new compensation system and trust the firm will take care of you; (b) go elsewhere where certainty regarding your salary exists.

Why would any business take care of its employees? The straight forward answer is that people are always the most important assets. Any distribution between the partners and the other members of the firm is a zero sum game; so there is an incentive to prey on employees. But if you do not pay the market rate, then as you have said, good people will walk. The net result is self-cannibalization as the firm is in effect being destroyed to bolster short term profits. If the partners are intelligent people who care about enterprise value, they will naturally look to future profitability and understand that in order to make money in the future they must have good assets to deploy. In this sense, the worry over compensation is misguided as Morgan Lewis must take care of its people if the equity partners wish to take care of themselves. Otherwise who would do the work?

I do not expect Morgan Lewis to pay their top performers less than before and in fact believe that they will actually pay more. It is the underperformers – the contract attorneys masquerading as big law firm associates – who will really feel the effects of pay for performance reforms. Most associates at a big law firm actually have no business being there. They neither have the connections to bring in business nor the intellectual gifts to really master the all the elements of a lucrative specialty. These people belong to the ranks of contract attorneys. In this much despised position, they are paid the market wage for the monkey see and monkey do labor that they provide. I expect law firms across the board to greatly expand their use of contract attorneys even if the market miraculously recover and sharply reduce their hiring of career associates because this is the arrangement that makes most sense. Why on earth would anyone pay a 20 something $160,000 a year to basically catch spelling mistakes? Only the very cream will be allowed to function as associates.

Other law firms will follow. There is no need to worry about losing ‘talented’ people as the market for very qualified and talented lawyers is over-flowingly abundant. Even if Morgan Lewis shit canned half of its associates and reduced the salaries of the other half by 50%, they would still be submerged with resumes if it was made known that they were hiring.

The realities are tough. Pay off your debts, save money and prepare for the worst.

Philadelphia = Detroit, with a worse hockey team

what are the numbers from the west coast offices?

117 is dead on. A year ago MLB might have been able to get away with lowering base salaries with a promise of a higher bonus, as top performers would believe they would be rewarded.

Unfortunately, the management has tried to soften the blow of bad news by promising that worse events were being avoided, only to revoke those promises later too many times this year.

(1) associate salary freeze, but commitment to "one firm" and no layoffs, but layoffs followed as soon as other firms' layoffs provided sufficient cover.

(2) promise of no staff salary freeze, followed by cowardly staff salary freeze communicated by mass voicemail to staff

(3) canceling of OCI, damaging firm reputation, on the premise that the firm wanted to take care of current summer associates / associates, and then giving less than 30% offers.

Reputation and trust, once lost, are very hard to regain. No associate believes a word a partner says about what is going to happen in the future - including re any merit bonuses.

They may want some associates to depart voluntarily, but they won't lose the ones they want to lose. The 2nd & 3rd year associates that aren't busy and aren't trusted don't have anywhere better to go - they hate their jobs and plan to hang out for a paycheck as long as possible. It's the strong, busy & profitable 4-7th years that are being told that they have a shot at partnership that are reevaluating their options, including options at other firms. All these lateral partner hires, including here in DC those from government with no existing book of business, seem to be making partnership prospects dimmer while cuts to pay make it less worthwhile to hang on to see what happens. Plus, the fact that the firm leadership is clearly focused on short-term gain rather than long term prospects for the firm makes becoming a partner there now much less attractive. The firm was once a grand estate, and the brass ring of partnership a key to the front door. The current senior partners have traded that estate for a fleet of depreciating rental cars, and they are pocketing the rents personally. Sure, it's great for their income, but how will future partners make money off the 20 year old cars in 2029?

I know at least 4 people in my office that would never have considered going to another firm 2 years ago that are looking into the possibility. A lower paying small firm that is doing well financially, with happy, valued associates is a MUCH more attractive prospect than it would have been a year ago. The pay difference is smaller than it was, and the feeling that you are working for someone that is not going to screw you over has real value.

MLB may receive resumes of hundreds of thousands of qualified candidates, but CAN IT SEAL THE DEAL? My colleagues have met several of these qualified candidates over the past few weeks and months, NONE OF WHOM ACCEPTED MLB'S OFFER. Post #112 above affirms this. So brag all you want about those pieces of paper you receive in the mail, but do us all a favor and drop them in the recycling bin....and post back here once someone actually accepts your offer. LET'S FACE IT, THE LAST QUALIFIED CANDIDATES MLB WAS ABLE TO ATTRACT JOINED BACK WHEN MLB WAS PAYING MARKET. Good luck going forward! We, the associates of MLB, sincerely extend our well-wishes that your track record shapes up.

You know what gets me? Morgan Lewis repeatedly says "other firms will follow this compensation system." What evidence does it have of this? Other firms get rid of underachievers and first years that it won't profit off of, and rewards the overachievers. The difference between Morgan Lewis and those other BigLaw firms is that when a BigLaw firm rewards the overachievers, it rewards them with a salary commensurate with what all other BigLaw overachievers are making.... it doesn't "reward" them by slashing base salaries and PROMISING to pay a bonus at the end of the next year. Thanks but no thanks.

123 is dead on. Best case, MLB attracts associates who have been laid off by other firms. Worst case, and most likely, those laid off associates join other firms that won't screw them over like MLB will.

Final tally- 18% offers given out in NY!!!