Biglaw

mayer brown logo.JPGOn Christmas Eve, Mayer Brown announced its bonuses for associates in the New York office. They matched the market– no surprises there. But our tipster noted that associates at the firm are unsettled by rumors making the rounds of layoffs coming in 2009. Mayer already laid off 33 attorneys, as well as administrative staff in November.

One sentence in the bonus memo has an ominous tone that’s making Mayer associates uneasy. The memo says that bonuses will be paid January 16, 2009 but “only to associates in good standing who are employed by the firm on the date the bonus is actually paid.” From a Mayer tipster:

People are upset about the language, (“All bonuses will be paid only to associates in good standing who are employed by the Firm on the date the bonus is actually paid.”) believing it to reinforce the idea that layoffs are happening come January 5th.

Are Mayer associates overreacting to the memo language?

Firm spokesperson Bob Harris says this is the “same language that has been used for several bonus seasons.” We looked back at last year’s memo though and didn’t see a similar sentence.

UPDATE: Associates are overreacting. Harris points us to a different 2007 memo that does employ the same language.

Harris was emphatic in saying that there are “no plans whatsoever for additional layoffs” at Mayer Brown.

Rumor mongers suggest otherwise. Predictions on the practice groups to be hit with layoffs, after the jump.

double red triangle arrows Continue reading “Nationwide Layoff Watch: What will 2009 bring for Mayer Brown?”

law firm associate bonus watch 2008 biglaw bonuses.jpgUpdate (3:30 PM): Please note that this post has been revised in various respects since its original publication. The situation is fluid and we are investigating further. Thanks.

It’s moving day. Time for the elite firms to separate themselves from everybody else.

Multiple tipsters inform us that O’Melveny & Myers associates, in California and in Washington, DC, received voicemails today confirming that first year associate bonuses would be… $27,500. The bonus scale for OMM, in CA and DC, is believed to look like this:

2007 – 27,500
2006 – 30,000
2005 – 32,500
2004 – 35,000
2003 – 37,500
2002 – 40,000
2001 and 2000 – 45,000

A tipster adds, “Everyone is also eligible for additional bonus amounts on top of that based on hours and performance.”

We understand that OMM traditionally makes these announcements over voicemail. Bonuses will be paid on December 31st, with an official memo following in January. Oh, and just for good measure, class appropriate pay raises will proceed as planned. Eat your heart out, Latham.

Update (3:30 PM): It appears that these California and D.C. bonus levels are subject to a minimum hours requirement of 1950. In addition, it seems that O’Melveny’s New York office is on the Cravath scale.

Update (3:45 PM): Associate editor Kashmir Hill just spoke by phone with an O’Melveny spokesperson. The spokesperson confirmed that OMM’s California and DC offices are paying bonuses to associates that are higher than OMM in New York.

“For some time, we have set bonus levels at a competitive rate for local markets,” she said. And as ATL readers know, this year the local market in New York is weak in terms of bonuses. The OMM rep pointed out that last year New York bonuses were higher than non-NYC bonuses.

In addition, the spokesperson added, the California and DC bonus scales are subject to a minimum hours requirement of 1950. Bonuses in New York are not subject to such a minimum (although “hours and merit are taken into account,” according to OMM).

More after the jump.

double red triangle arrows Continue reading “Associate Bonus Watch: O’Melveny Makes It Rain, Baby
(At least outside New York. For 1950+ hours.)”

partnership announcements.JPGIn today’s National Law Journal, Leigh Jones reports that non-equity partners at major law firms are also worried about the future. With all of the frightening career news floating around, it seems reasonable that either you are bringing in business, or you are terrified.

The upshot is that some law firms — especially those that have maintained armies of nonequity lawyers primarily to service accounts — are rethinking their business model, and some nonequity partners likely are reassessing their careers.

“Some firms are going to have to take a hard look,” said Brad Hildebrandt, chairman of Hildebrandt International, a law firm consultancy.

In good times, non-equity partners are a nice luxury for firms looking to use experienced people who generate great fees:

K&L Gates Chairman Peter Kalis said he is “very” comfortable with the equity-to-nonequity ratio at his law firm. He said the business model at K&L Gates is akin to a diamond, with the widest portion of the structure representing a group of nonequity partners who have created a more attractive service model for clients.

“Clients have little or no interest in paying for credit card-waving first- and second-year associates to fly around the country and run up bills,” he said. “What clients are interested in is paying for appropriately priced people who have both skills and substantive knowledge and who add value.”

The nonequity tier at K&L Gates, said Kalis, comprises attorneys with a wide variety of career goals — some with definite plans for full partnership and others who have less desire to develop business.

But these are not good times.

The bloated “inner tube” of non-equity partners, after the jump.

double red triangle arrows Continue reading “Non-Equity Partners, Trying to Hang On”

Secretary.jpgLast week, we posted an open thread to discuss end-of-the-year gift giving to your secretary and/or paralegal. We’ve waded through the many comments to fish out some points of consensus.

  • A few secretaries appeared on the thread to urge associates to give cash or an AmEx/Visa gift card equivalent, and not a gift card to a specific restaurant, bookstore or department store. As one secretary says, “if you decide on giving gift certificates/store cards – I sincerely hope your next bonus will be paid in the same currency.”
  • New York appears to have its own scale. Even with the bonus slash, many associates are still giving their secretaries $100 per each year the associate has worked at the firm.
  • For those outside of New York, your little gift bundle of holiday joy can stay in the $100-250 range, with junior associates giving about $100, mid-levels giving about $150, and senior associates giving $200+.
  • In case comments are not indicative of general trends, here are some polls to see what your peers are doing. New York is its own world, and gets its own poll:

    And what about the trend across the rest of the country?

    One commenter says that even if you have a bad secretary, “one of those ‘can’t make a copy’ people,” associates should still give a small gift, but should not feel obligated to give a hefty cash bonus.

    More polls — about who you are giving to, and how to handle gift-giving if you’ve changed secretaries — after the jump.

    double red triangle arrows Continue reading “Further Thoughts: The Time for Giving (to your Secretary/Administrative Staff)”

    Cravath screws associates on bonus CSM.jpgLast year, we reported on a nice perk for Cravath associates abroad: a hefty cost of living allowance, which had junior associates in London making over $300,000.

    It looks like the half-Skadden mentality has made its way across the Atlantic. From a tipster:

    Cravath Swaine & Moore cuts its COLA in the London office from $110,000 to $60,000 as of January 1, 2009. [A]ll the associates, one after one, where called into the office of a partner, Philip Boeckman, to receive the news. The reason mentioned for the cut is the evolution of the dollar-pound exchange rate.

    The COLA is the same for all associates in London regardless of the level of seniority. The COLA gets paid together with the base salary on a bi-weekly basis.

    That’s a big cut for the 20 associates in the London office. Before the COLA was raised to $110,000 last year, it was at $85,000.

    RollOnFriday is not overly sympathetic:

    Clearly the firm’s partners have now got wise. This week associates were hauled in one by one and told that the COLA would be reduced by $50k from 1st January, in response to weakness of Sterling. One associate complained to RollOnFriday that this comes on top of bonuses being halved and the ski weekend being cancelled, and says that these measures “pretty badly affect associate morale”. OK, no one likes to get less wedge – but low morale because of only getting £40k to live in London, when everyone else is being made redundant? Bring out the violins.

    The other side of the pond just got a lot less attractive.

    Earlier: Biglaw Perk Watch: Working Abroad

    Cravath London associates lose £34k bonus [RollOnFriday]

    economy freezes over.JPGMcDermott Will & Emery has already announced that associates will be eligible for their bonus “advances” that they were already promised. We reported that MWE associates can expect $10K to $20K now, while the final numbers will be released in March. At the time we said:

    The other wrinkle here is that MWE is leaving the door open on what their “final” bonus package will look like. They could match last year’s market, or not. There is a lot of time to read the market between now and March.

    Having already announced this good news, it was a little weird yesterday when McDermott announced the same news again. The same numbers, the same plan, the same “final decision in March” language. Did MWE management simply forget that they had said all of this before?

    Not quite. Buried in the third paragraph of this “new” announcement was the line:

    In addition to the final bonus determinations, Associate base salaries for 2009 will be determined and announced in March at the conclusion of the 2008 compensation process. Until then, current base salaries will remain in effect

    No raises until March (if at all)? Is MWE really hurting or just really, really cheap?

    After the jump, the freezing future.

    double red triangle arrows Continue reading “The Next Wave of Cost Cutting: The Pay Freeze”

    Secretary.jpgWith the holidays two weeks away, many are starting to think about the frantic search for gifts for loved ones… and loved support staff. A Consumer Reports survey indicates that 76% of Americans will cut back on gift giving this year. Surprise, surprise. But what does it mean for planning your gift for your secretary and/or paralegal?

    Writes one ATL reader:

    I’m a NYC 4th year and for three years have given my secretary $100 per year I’ve been at my firm (plus a small — $25 — physical gift as well). If I follow that pattern, I’d give her $400 cash in a few weeks.

    My secretary is great and I would like to show my appreciation. But this year, with my job hardly safe and my bonus likely to be at Half-Skadden levels (if I even survive long enough to get a bonus), does the $100 per year rule still apply in NYC?

    I think we need a full post on this. It’s not 2007 anymore.

    $400 seems high, even for New York. We thought $150-200 was the going rate.

    For the uninitiated, it’s customary for associates at large law firms to give a cash gift to their administrative assistants, often along with a card or small gift. Not everyone opts for cold, hard cash– some do AmEx or Visa gift cards. (If you do choose to go with bills, please make sure they are not of the soiled, dog-eared variety.)

    One secretary wrote to us this year to voice opposition to the inter-office gift giving (and she’s not the only one):

    How should a legal secretary ask her lawyers to not give her gifts? I don’t think Christmas has any place at work, and, though I respect and appreciate my lawyers, I don’t want them giving me gifts. I find it awkward and embarrassing on many different levels. I’ve been at my current job 5 years and tried at first simply not reciprocating. But they never got the message. I’m dreading this year’s ordeal like the plague. They make a little ceremony of calling me into an office as if I were in trouble. Please ask your readers what I might say that would stop the gifts without offending my guys. Thanks!

    So, here’s an open thread to discuss your gift-giving plans in the current economic environment. Are you scaling back this year due to a diminished bonus? What’s the scale in your town? Does your paralegal get to sit on Santa’s lap as well? And if your secretary wants no part in the 12 days of Christmas, how should she let you know?

    NYLJ top 100 logo.JPGAs we’ve explained before, overall head count numbers can be misleading. In these days of layoffs, acknowledged and stealth, firms could still be cutting associates while putting up big head count numbers.

    But it’s always fun to gawk at the huge Manhattan behemoths. Today, the New York Law Journal Magazine released their annual report on on the largest firms in New York:

    The NYLJ 100 ranks the 100 largest private law offices as of Sept. 30, irrespective of where a firm is headquartered, whether it claims a home office or in what state or country it originated or has the majority of its lawyers. The exception this year is that in a few cases numbers are as of October, to better reflect late-breaking events.

    The top fifteen biggest firms (numbers show attorneys in New York) are not surprising:

    1. Skadden, Arps, Slate, Meagher & Flom: 910
    2. Weil, Gotshal & Manges: 679
    3. Dewey & LeBoeuf: 663
    4. Simpson Thacher & Bartlett: 657
    5. Paul, Weiss, Rifkind, Wharton & Garrison: 644
    6. Davis Polk & Wardwell: 607
    7. Debevoise & Plimpton: 535
    8. Cravath, Swaine & Moore: 529
    9. Sullivan & Cromwell: 499
    10. Sidley Austin: 469
    11. Schulte Roth & Zabel: 459
    12. Cleary Gottlieb Steen & Hamilton: 450
    13. Proskauer Rose: 448
    14. White & Case: 443
    15. Willkie Farr & Gallagher: 435

    You can read the full list here. Behold the magnificence of size.

    New York Law Journal Magazine [NYLJ]

    axiom (2).jpgFor those attorneys back on the market, we’d like to note other firm options beyond those with ampersands. A recent issue of Fortune Magazine profiles web-based law firm Axiom. Founded in 2000 by Biglaw refugees, it appears the high-end legal temp agency has been steadily growing.

    Back in December 2006, the Wall Street Journal profiled the firm–then with 150 attorneys and offices in New York and San Francisco–noting that its associates make salaries in the high-$100,000s and mid-$200,000s, work 40 hours per week, and offer legal services up to 50% lower than top law firms. It got attention again last year, when it opened a new office in London, and added more attorneys taking its count up to nearly 200.

    It looks like this baby is still growing. Its office count is now up to five, with additional offices in L.A. and Chicago, and the attorney count is up to 216. Its website brags of “law redefined” and has bios for its support staff giving them nicknames, like “Last of the Faux-Hicans,” “The Hammer,” and “Jazz Hands.”

    A venture capitalist tells Fortune that Axiom is “almost like an online dating service for the legal profession.” (Ed. note: No, that would be ATL Courtship Connections.) Beyond the online component, a big difference from a traditional law firm is that Axiom is a corporation instead of a partnership, and having been funded by venture capitalists, will actually have to go public at some point.

    The WSJ law blog notes that some fear the idea of being consigned to “temping hell.” But in a gallery of testimonials, a San Francisco Axiom attorney praises the life-work balance at Axiom, saying, “I will passionately find creative solutions to your company’s thorniest legal issues, but I will also find time to passionately ride my dirt bike in my hot pink riding gear.”

    Well, if that’s not an advertisement for temping, what is? What do you think? Ready to send your resume to Axiom?

    Legal eagles set free [Fortune]

    Axiom: A Different Kind of Legal Practice? [WSJ Law Blog]

    Finding Happiness On the Slow(er) Track [Wall Street Journal]

    Take the law into your own hands [Financial Times]

    pyramid scheme capstone small.jpgAmerican Lawyer released their annual survey of managing partners at top law firms. Despite a high level of uncertainty, managing partners still remain optimistic about the future.

    Really.

    You’d think all of the layoff news, dissolution rumors, half-bonuses, and the terrible American economy would make Biglaw chieftains more than a little worried about the future of the industry. But no! Everything’s going to be fine. Pay no attention to the man behind the curtain:

    But managing partners are still reluctant to throw away their head cheerleader pompoms. Even as uncertainty clouded the responses of the 112 firm leaders who answered this year’s survey, they remained surprisingly upbeat about their firm’s prospects. Make no mistake: Firm leaders know the boom has busted; most of them responded to the survey after September 15, the day that Lehman Brothers Holdings Inc. filed for bankruptcy and Merrill Lynch & Co., Inc., was sold. Few, however, were willing to say–at least for now–that their business will be dramatically different as a result. Even in a time of financial turmoil, they’re counting on clients to continue to demand high-end legal services.

    The results are really not that surprising at all, once you become accustomed to the never ending flow of BS that law firm managers spout right up until profits per partner take a significant hit.

    But it is always funny to see the disassociation between a firm’s public statements and their internal machinations. Obviously, all of this public backslapping is for the benefit of clients who are not paying enough attention:

    Still, one aspect of firm management may never change. In one of the most interesting responses, law firm leaders reported that they are still planning to raise billing rates in 2009. Ninety-eight percent of respondents to our survey said that their rates will be higher next year, though 63 percent said the rise will be 5 percent or less. (By contrast, 62 percent reported in 2007 that they’d raise rates by more than 5 percent.) It may seem counterintuitive to raise rates when clients are hurting, but in interviews, managing partners insist that, for most clients, value trumps rates.

    That makes perfect sense. Charge more + Pay less (bonuses) = Stable PPP notwithstanding an economic crisis of global proportions. “I love this plan! I’m excited to be a part of it!”

    After the jump, let’s bring out the Stay Puft “Straw” Man.

    double red triangle arrows Continue reading “Managing Partners Expect Associate Head Count To Remain Stable:
    ATL Expects Associate Head Count to be a Useless and Misleading Statistic”

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