Associate Salaries, Biglaw, Money

NY To $180K, The Bad News -- Who WON'T Be Matching?

Update: More Biglaw compensation bad news. What firms will not be matching the Cravath compensation scale?

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bonus money low bonuses poor empty pockets sad upset lawyer businessmanThe New York legal market is making its way to a base salary of $180,000 for first-year associates as the standard. We’ve waited nine-plus years for a move on salary, and now that it’s here there is much joy and excitement, but also speculation. For example, we keep hearing Kirkland & Ellis is going to match, but, as of yet, we haven’t seen the memo.

But there is also the flip side: what associates won’t be seeing a bigger payday? When the news first broke, there was immediate chatter that this firm was too cheap to match or that one was too highly leveraged to match. As of publication time, only a handful of Biglaw firms, and a pair of boutiques, have gotten on board with the program — and now we are hearing some firms definitely will not be playing ball.

American Lawyer broke the bad news to associates at Kelley Drye, whose initial plans seem to be prioritizing clients’ money concerns:

“With [Monday’s] announcement some big law firms demonstrate that they do not listen to what their clients have been saying over the past decade about the price of legal services,” said Kelley Drye & Warren chair James Carr, who assumed leadership of his firm last year. “While we continue to monitor the compensation market, in our view, sophisticated purchasers realize that they can obtain equal or better legal services at Kelley Drye for a fraction of the cost.”

We have also heard from a partner at an Am Law and Vault 100 firm not headquartered in New York who said no way would their firm be matching. And highly placed sources at other firms have speculated that junior partners at some sizable firms make less than the top of the Cravath scale, so they won’t be playing the matching game either.

With Weil Gotshal & Manges and Milbank making the pay raises effective for all U.S. offices, there is also added pressure on non-New York markets to make a move. But that doesn’t mean they are eager to make the jump:

The Philadelphia firm leader, who requested anonymity in order to speak freely, added that he continued to be “blown away at the short memories of law firm leaders.” He said it’s possible the high-end legal services industry is heading into another downturn. In that type of climate, he added, firms are raising salaries only to then “chop the heads off their associates.”
…
“We certainly took note,” said Fox Rothschild managing partner Mark Silow of the salary increases. “[But] we don’t view Cravath as one of our competitors. It’s really in a different segment of the market.”

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And folks are getting antsy, we got this message from a tipster who feels underappreciated:

Interesting news out of Boies Schiller And Flexner: Silence. Our pay is now significantly below market. Base is below market and bonuses for most associates (even in the 2300-2400 hr range) is less than market, particularly for midlevel associates.

So what about the other firms out there? Do you know of any Biglaw players that are sitting this round out? If so, please drop us a line — text (646-820-8477) or email — when you know of other firms making a compensation move or refusing to do so.

UPDATE (2:21 p.m.): Oof. More bad news. Lesson learned: even if your firm “matches” in New York, you might not be getting a raise. Covington & Burling’s email to associates letting them know the 500+ attorneys in their D.C. office won’t be seeing a compensation bump was brutal. You can read all the details here.

Big Firms Move to Match Cravath Associate Pay Boost [American Lawyer]

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Kathryn Rubino is an editor at Above the Law. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).

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