Biglaw

Notes from the Breadline Roxana St Thomas.jpgEd. note: Welcome to “Notes from the Breadline,” a new column by a laid-off lawyer in New York. Some details have been changed to protect the author’s identity (and job prospects) — she’s still searching for work, as will be covered in future columns — but her story is true in its essentials.

This week the column will appear today and Thursday, and then each Tuesday in subsequent weeks. You can reach Roxana — perhaps to offer her a job? — at roxanastthomas at gmail dot com.

How quickly things change. This morning I had to stop for a moment to ask myself what month it is. January? No. February? I think so. In fact, I’m pretty sure that it is February-something, although it’s hard to say when tumbleweeds blow through the Outlook calendar that remains on your BlackBerry, prepared to accept the appointments you do not have and the meetings you will not schedule. Is it Thursday? Friday? Tuesday? That’s even tougher. Those are all days on which one might have a conference call, or a motion due, or a litigation department dinner to sit through while rolling your eyes and emailing a friend across the room (like sixth graders disguised in business attire and outfitted with less crinkly note-writing tools).

But none of those things happened yesterday, or will happen today, and I am wearing the same thing I slept in and, for that matter, wore to the gym. And I haven’t washed my hair since whatever day was three days ago, which I couldn’t tell you the name of.

I should explain, as a preliminary matter, that I did not engage in this mental exchange after suffering a concussion, or upon waking from a bender. I’m just having a hard time believing that, a few short months ago, I was saving to buy a house. That I set up a bank account from which to make extra payments toward my student loans. That my 401(k) actually increased in value from one month to the next. Or, better yet, that I reveled (albeit somewhat sheepishly) in the ability to treat myself to sushi a couple of times a week, or to pay what women pay for a haircut in New York, or to buy gas at the height of the summer price explosion. I am not talking about a life of profligacy, Manolos, or the newest new iPhone, my friends: I’m talking about what it was like to have a job, which I am suddenly without.

It seems that it should have taken longer to go from that state of being to this one — that I should have seen it coming, or had a chance to prepare for life in the breadline. If depicted in a movie, it should have happened over the course of a montage, in which scenes involving a giant beach ball would give way to a long view of people diving into the leaf pile, wearing mufflers, and then pulling the Christmas tree home in lightly falling snow. Calendar pages would be shown, tearing off and floating away. It would not have happened in the sudden, execution-style fashion now favored by firms. If depicted in a cartoon, this disturbingly popular approach would involve an Acme catapult.

But, I have to admit, as much as I still wake up feeling stunned by this sudden reversal of fortune, I wasn’t deeply shocked when my turn came. We — meaning I and every lawyer (and, for that matter, non-lawyer) I know, at my firm and others — had been predicting catastrophe for some time. If you’ve been through it, you know that there is, in fact, a difference. The knowledge that your head might be on the chopping block protects you from pure, unadulterated shock, but it doesn’t spare you from the stunned realization that you’ve finally been fed into the wood chipper.

Check back in on Thursday, when we’ll revisit the Palin-esque scene of my own “termination,” as they say in the trade.

Update: Future posts in this series will be collected here.

pay freeze salary freeze pay cut law firm.jpgAnother month, another round of freeze announcements. Here are the latest firms to announce the withholding of class year raises in 2009:

  • Baker & McKenzie (“Slurpee” freeze– will be revisited on June 30)
  • Cooley Godward
  • Patton Boggs
  • Seyfarth Shaw

    Jenner & Block is not freezing salaries, but it is giving smaller raises to New York associates. The salary scale will no longer match the market in New York, reports one ATL reader:

    Jenner & Block just announced that they are not matching NY market for salaries. Instead, they are going to pay equal salaries across their offices, meaning their NY office associates will make at least $10k less than other associates at tier one firms in NY. From what I hear, people are pretty angry, particularly because a) Jenner also does not cover bar fees or court admission fees (as nearly all other firms do, particularly in NY); b) Jenner does not count all pro bono hours one-for-one with billable hours towards their 2000 hour requirement (unlike many firms); and c) Jenner’s profits went up last year.

    Since Jenner is essentially doing a salary raise cut (rather than a freeze), it has avoided being added to our list of firms that have frozen. To see Cooley’s 2009 salary levels, Seyfarth’s freeze memo, and the growing list of firms that are keeping 2009 salaries at 2008 levels, you have to jump.

    double red triangle arrows Continue reading “The February Freeze Round-up: New Firms on Ice (and smaller raises at Jenner & Block NYC)”

  • We linked to this article from the National Law Journal in the Morning Docket yesterday, but we think it warrants a deeper treatment.

    Karen Sloan of the National Law Journal digested a recent survey [PDF] of legal market trends by Hildebrandt and Citi. A lot of it we all know already– things were bad in 2008, and will be nastier in 2009, with average profits-per-partner predicted to decline by 5 percent to 15 percent. Survey says: Expect more layoffs, smaller bonuses, and more salary freezes.

    What caught our eye was the analysts’ suggestion for generating profits in 2009:

    [Firms will need to] reconsider changes to several key aspects of their business model. That includes everything from adjusting associate compensation structures and being more flexible with professional staff to offering alternatives to the billable hour model.

    Biglaw to… competency-based models?

    [F]irms should move away from lockstep associate compensation models and instead consider competency-based models, the advisory suggests. Jones said that instead of increasing compensation by class year, an alternative model is to separate associates into three or four levels, determined by their specific skill sets. Associates then would move up the next level only after they acquired certain skills. Rising to the next level would trigger an increase in compensation.

    The report also suggests upping the number of contract attorneys hired. A commenter on yesterday’s Morning Docket was not pleased by the suggestions:

    The suggestions they make for firms to change their promotion policies and use more staff attorneys would turn practices into f***ing Walmarts.

    Well, Walmart is one of the few businesses doing well in the downturn. We’re just saying.

    Continued Decline in Law Firm Profits Seen for ’09 [National Law Journal]

    British aristocrat lawyer.JPGDespite the difficult state of the legal industry, a British research group has found that the profession is still an elite profession that attracts blue-blooded talent. The results of the Centre for Market and Public Organisation elitism research are published in The Lawyer:

    Research conducted for The Lawyer by the Centre for Market and Public Organisation (CMPO) at Bristol University, taking wealth to be an indicator of social standing, compared the average monthly family income for lawyers born in 1958 with those born in 1970.

    Family income isn’t the only measure of being “elite.” For instance, the study doesn’t take into account the serf to family member ratio of young future lawyers, or if one can put the writings of Dostoyevsky in the proper historical context.

    Nonetheless, the results from across the pond are pretty striking, and makes one wonder if there are any class barriers that American lawyers must overcome.

    More details after the jump.

    double red triangle arrows Continue reading “British Biglaw: Home for ‘Elites’”

    wall street bull backside.jpgCutbacks are hitting every level of Biglaw. Firms have gotten very creative in their attempts to wither cut or control costs. Because of all these rollbacks, weathering the global economic crisis is more challenging than simply holding on to your job — though that is hard enough.

    How is the economic crisis affecting people day-to-day? We received an interesting story from a Biglaw staffer that really brings home the daily struggle to make it through this recession:

    Last year Dechert sent out that retroactive memo about taking a certain percentage from the attorneys’ bonuses if they didn’t enter their time on time. Well, now they are saying that they are going to do it to the paralegals as well, BUT since most paralegals don’t get bonuses, they are threatening to take five percent from our vacation pay if we don’t qualify for a bonus and if we are late entering our time. I only make about $120 a day (in New York City!), so if the partners, who are making millions, want to take $6.00 from a struggling paralegal, that is just disgusting. …

    Do any other firms treat their staff [like this]?

    Dechert aside (and for the record, we don’t know if this story is an accurate reflection of Dechert’s policies on this specific issue), what other kinds of everyday, “standard of living” sacrifices are people having to make in these difficult times? Contrary to the popular belief, bonuses and pay raises don’t really go into the “coke and prostitutes” fund.

    Are associates reorganizing their debt repayment plans? Are paralegals putting off plans to go back to school, or accelerating those plans? Beyond the dollars and statistics, there is a very real cost to all of the bad economic news.

    How is it going out there?

    Earlier: Biglaw: Welcome to the Credit Crunch

    start date.jpgLast summer, we started an official Nationwide Start Date Watch as a few firms decided to trim costs by delaying the start dates for incoming associates. Why bring in new kids at $160,000 a pop when there’s no work to give them?

    In 2008, Powell Goldstein, Thelen, Thacher, and Heller pushed their start dates back to January ’09 (though it was not enough to save the latter three firms); Seyfarth Shaw, K&L Gates, Shearman, and DLA Piper pushed their start dates back from September to October; Pillsbury pushed back to October, with bonus incentives offered to those who were willing to start even later; and Sonnenschein and WolfBlock asked associates to start in November.

    This summer, firms may not have to “delay” start dates. Based on reports from a few 3Ls, it looks like late fall may be the new norm for start dates.

    Start dates are in late October for new associates at Clifford Chance and Milbank Tweed, and November for new associates at Morrison & Foerster. (Though with Wednesday’s layoff news, MoFo-bound law grads are just happy to have start dates.)

    Later start dates are good news for those who want to take nice, long bar trips, and bad news for those who want to start building their bank accounts as soon as possible. We’re wondering how widespread this trend is. If you’re a 3L with an offer letter in hand, please take this poll about when you’ll be officially entering Biglawdom.

    Check out the results of the poll.

    Earlier: Previous ATL coverage of Start Dates

    pyramid scheme capstone small.jpgJonathan Glater’s article in the New York Times this morning is just further evidence that the pyramid scheme of major law firms is starting to show its age. Yesterday, the New York Lawyer (subscription) took more direct aim at the weak foundation of the Biglaw business model:

    Over the last couple decades, high leverage–the practice of having each equity partner supported by three or more associates or income partners–was accepted as a basic tenet of profitability. A firm billed out these junior lawyers at significantly more than it paid them, often getting billings that were triple the lawyer’s salary. It seemed like a sure-fire way to make money. But high turnover and rocketing salaries ate into profit margins. Now, the whole pyramid model is looking fragile.

    And it shouldn’t come as a shock that the pressure weighing down on the business model is coming from partners desperate to hang on to every penny of profit. It is clients that ultimately control the purse strings.

    More detail after the jump.

    double red triangle arrows Continue reading “The Leaning Tower of Biglaw”

    Fish Richardson logo.jpgFish & Richardson is conducting layoffs, another indication that IP work is not a safe haven during the economic storm.

    The firm would not respond to our requests for comment, but a firm wide email sent to Fish associates confirmed that 30 support staffers were let go this week:

    Today, Fish & Richardson is reducing the size of our staff by notifying 30 support staff that they will no longer be employed by the firm. Affected employees are in eight of our U.S. offices and in several administrative departments.

    We thank all of these employees for their service to the firm. We know that this will be a difficult time for them, and we will assist them through this transition with a severance program. Our people are our greatest asset, and so we take these steps only after thoughtful consideration.

    The firm wide memo did not mention anything about associate layoffs. That may be because the firm is also conducting stealth layoffs of associates.

    More details from tipsters after the jump.

    double red triangle arrows Continue reading “Nationwide Layoff Watch: Fish & Richardson Cuts 30 Staff: Unknown Number of Associates”

    salary pay raise.jpgWe still don’t think Biglaw firms giving out normal raises is news. But judging from the number of e-mails and comments we’ve received begging for this list, many ATL readers judge this post-worthy.

    In case you’re somehow unfamiliar with the practice, Biglaw firms tend to have a tiered salary system keyed to associates’ class years. In the new year, when an associate moves up a class, they move to the next level on the pay scale. An example of such a scale, from Cleary Gottlieb’s 2009 salary memo (posted in full after the jump):

    Class Salary

    2008 and participants in the International Lawyer Program – $160,000

    2007 – $170,000

    2006 – $185,000

    2005 – $210,000

    2004 – $230,000

    2003 – $250,000

    2002 – $265,000

    2001 – $280,000

    Some 32 firms (that we know of) are responding to economic pressures by freezing salaries: capping pay scales at last year’s rates.

    But a number of firms are giving their associates the usual $10,000 – $25,000 raise. This is an open thread for those getting the pay bump to brag about it. A list of nearly 50 firms conducting business as usual with raises, after the jump.

    double red triangle arrows Continue reading “Open Thread: Business as Usual, or The Firms That Have Not Frozen Salaries”

    John Grisham sat down with us this morning for an exclusive blog interview to discuss his new book, The Associate. The book’s main character, Kyle McAvoy, is a Biglaw associate with a mysterious past and intriguing future.

    In his previous books, Grisham has explored emotional and ethical costs of practicing the law in various forms. But his latest book takes dead aim at the life, and lifestyle, of junior associates at top Manhattan law firms.

    A lot of Kyle McAvoy’s Biglaw experience will ring true to most readers of Above the Law. We found out that Grisham’s depictions of Biglaw life are so accurate because typical associates told him the truth:

    I found some wonderful blogs where associates post anonymously their stories. Beautiful stories….

    But my best research was done by a research assistant that spent one year in the law…. He knew a ton of lawyers in the big law firms in New York. He told them up front what he was doing [researching for Grisham's new book] and that their stories would be kept anonymous, and they just unloaded on him…. Most of it went into the book.

    The book contains scenes that are easily recognizable to most Biglaw associates, from the mind-numbing experience of document review, to the attorney who literally passes out due to exhaustion.

    But we wanted to know if Grisham modeled the book’s central firm, Scully & Pershing, on any individual real-life firm. Grisham said that he unequivocally did not:

    I was prepared to go to a big law firm and get inside and walk around and kick the tires. But I didn’t want to do that because I knew the portrayal would be unflattering and I didn’t want to embarrass any particular firm.

    In fact, Grisham thought about changing the name of the fictional Scully to avoid any possibility of confusion with Skadden.

    Why is the take on life in Biglaw so “unflattering”? Grisham explains that the wasted potential he explores in The Associate mirrors what he sees in the corridors of the nation’s top law firms.

    More details, after the jump.

    double red triangle arrows Continue reading “John Grisham: The Associate
    An ATL Exclusive Interview With John Grisham About His Latest Book”

    Page 326 of 4541...322323324325326327328329330...454