McDermott, Will & Emery has come up with a more creative way to deal with soaring associate salaries. The firm has announced that it will be creating a "second tier" of associates to deal solely with low-level tasks like, e.g., document review.

As Cal Law points out, hiring cheaper lawyers to do this type of work is nothing new; this type of stuff is the staple of contract attorneys in most biglaw firms these days. The new part is making these contract attorneys a lower class of associates, essentially making them "permanent contract attorneys", as Cal Law puts it:

While some firms quietly turn to contract attorneys, or even ship grunt work overseas, McDermott, Will & Emery plans to create a new tier of attorneys — think of them as permanent contract associates — to handle lower-end tasks at lower billing rates.

...

First-year associates at big firms now earn $160,000. Meanwhile, electronic discovery has dramatically increased the amount of basic work that usually goes to those high-priced associates.

"This is a topic of great importance, since the cost of document review has become intolerable for everyone," said David Balabanian, the head of Bingham McCutchen's litigation group.

While hiring contract attorneys is nothing new, creating a second class of full-timers is.

[The Recorder via Cal Law]

Is this a good or bad thing? On the one hand, it increases the competition even more for the "real associate" positions and institutionalizes to an even greater extent the law school tier system into biglaw law firms.

On the other hand, it may be beneficial to those attorneys now doing the contract work. It will establish them as associates in the firm, even if not on the same level as the top tier associates. They will likely receive things like benefits. The top tier associates will likely do more substantive work sooner. And the clients won't find themselves paying top tier prices for stuff like document review, as still occasionally happens.

So what do you guys think? Will other firms adopt this model? Once again, it makes sense to us.

And hey, L2L, maybe you should apply.

Related:
Firm to Fill Cheap Seats [The Recorder via Cal Law]
McDermott To Create a New Class of BigLaw Attorneys [WSJ Law Blog]

Consider the Paul Weiss rumor from earlier this afternoon CONFIRMED.

1. We've spoken on the phone with Madelaine Miller, communications manager for Paul Weiss. She confirmed that the firm just announced bonuses ranging from $30,000 for the class of 2006 to $65,000 for the most senior classes.

2. We have the Paul Weiss memo, which includes both 2006 bonus and 2007 base salary information. Check it out, after the jump.

In light of the recent debut of Skaddenfreude, ATL's column chronicling attorney compensation, it's a neat coincidence that the New York Times has an entire article discussing compensation for first-year associates at major law firms.

We'll get to that article in just a second. First, though, a brief amendment to our prior Skaddenfreude request. We received this thoughtful email from a reader:

is it too late to add a line for hours billed? that would add more of an element of schadenfreude too, don't you think? this is more like freudenskadden -- feeling sick about how much more money they make.

Good point. We stand corrected! So yes, in your Skaddenfreude submissions -- we've received a bunch already, thanks, keep 'em coming -- please include your annual billable hours (either an estimate of this year's or last year's actual).

If you're not a law firm attorney, feel free to include an estimate of how many hours you work in a year. If you're a legal academic, throw in some bragging about how you make six-figures, or close to it, for only nine months of work.

Okay, that's the Skaddenfreude amendment. Now, on to discussion of the Times piece -- after the jump.

Time for your daily dose of stuff-you-already-knew about lawyer compensation.

From the New York Law Journal, which every now and then publishes something you actually care about:

Salary increases for associates and non-equity partners have cut into equity partners' pay, a survey by law firm consultancy Altman Weil has found.

The survey of 200 firms nationwide found that median associate pay had increased 5.7 percent to $118,475 in 2005, while non-equity partner's compensation had increased 6.3 percent to $187,000.

Meanwhile median profits per partner at the firms surveyed by Altman Weil increased by a more modest 2.9 percent to $297,899.

So there you have it. Law firm associates aren't starving -- except in New York, where low six-figures can't get you Kobe beef. But law firm partners are living off the fat of the land.

Associates of the world, unite! You have nothing to lose but your Blackberries.

Survey: Associate Salary Hikes Cut Equity Partner Pay [New York Law Journal]