Last week, Kramer Levin announced its bonuses. The firm is paying bonuses on the Cravath scale, to associates “in good standing.” So it looks on the surface like a market match.
But the memo contains the following language worth noting:
As has been our practice, eligibility to receive the Year-End Bonus will be based on merit and achievement of hours thresholds (which are expected to be the same as the last couple of years); associates who do not satisfy these components may be eligible to receive Year-End Bonuses in lesser amounts.
Do these merit and hours requirements keep a significant number of associates from receiving the full bonus? We don’t have enough data points to say; feel free to discuss in the comments. Also note that bonuses won’t be paid for a while — not until February 15, 2010.
The full memo appears after the jump.
Last week, we surveyed Above The Law readers about their billable hours for 2009. Over 16% of respondents will be billing less than 1600 hours, and the majority of them are billing less than 1500 hours.
Assuming a stingy two weeks of vacation, that means these folks are billing 30 hours per week. Those are not the kind of hours you want to be racking up in Biglaw. But 2009 was slow, and there wasn’t a lot of work to go around.
How did you spend those unbillable hours? We hope a decent percentage of them were spent here at ATL doing “trade media review.” We hope you weren’t spending your time playing Facebook Mafia Wars and getting tricked into opposing health care reform.
We talked to legal recruiter Dan Binstock about what associates should be doing during their unbillable time. He offers advice to low-billers (and anyone gunning for partnership) after the jump.
Over the summer, we asked you how your hours were looking for 2009. Survey respondents indicated 2009 billable hours looked to be as scarce as Zhu Zhu hamsters. Almost 20% of respondents said they would have less than 1600 hours this year.
See those results with pretty colors here.
But that survey was in August, so it was speculative. Now we’re nearing the end of the year. Is the 2009 billables outlook still bleak? Or have you been spending this fall racking up the hours?
New survey after the jump.
Ed. note: Welcome to ATL’s first foray into serial fiction. “My Job Is Murder,” a mystery set in a D.C. appellate boutique, will appear one chapter at a time, M-W-F, over the next few weeks. Prior installments appear here; please read them first.
The author, a former appellate lawyer, wishes to emphasize that any resemblance to any actual person, living or dead, is purely coincidental. Except for the geeky stuff. Appellate lawyers really are that geeky.
Susanna Dokupil can be reached by email at email@example.com or on Facebook.
Back at the office, Tyler reached for his case file. A yellow Post-It note on top read “Drinks at 5 p.m. Solstice. K.”
Tyler instantly e-mailed Katarina one word: Yes.
Then he noticed an e-mail from the managing partner announcing cuts in the recruiting budget. No reimbursements for associate lunches with summers. The firm has, however, negotiated a deal with Solstice such that all recruiting meals eaten there and paid for by corporate credit card are still fully reimbursable up to $7.00 per person. Tyler groaned audibly. Having to eat well-presented-yet-unflavored food every day was his personal hell.
An e-mail from Katarina appeared! His heart pounded as he read her reply: “?” He read it again and mentally administered severe self-flagellation for a divination attempt gone badly awry! Tyler wished vainly for a time reversal spell to recall that e-mail. Seeing none, he instead replied, “What is the answer to which the question is ‘dinner tonight?’” He crossed his fingers.
So, Baker Botts – Houston (should be firmwide, though I don’t have have all the details) is adopting a form of the Reed Smith pay structure. …
My understanding may be imperfect, but the notion is that it’s something like a three part system of junior associates, mid level associates, and senior associates, with pay discrepancies laid out among the three. No more lockstep. Unclear what the bonus structure is beyond the nebulous “merit” nonsense.
The Reed Smith structure has received a lot of attention. Last month, we mentioned that Reed Smith will categorize associates as junior, mid-level, or senior associates. But those classifications won’t necessarily be tied to how long an associate has been out of law school. So you could see a fourth-year classified as a senior associate making significantly more than a sixth-year classified as a midlevel associate.
Today, the Legal Intelligencer reports that the Reed Smith plan will also include a cut in associate salaries and billing rates:
Reed Smith has cut starting salaries by about 20 percent for the 51 first-year associates set to start in January and, in turn, is cutting their billing rates by the same margin.
You can read the full Reed Smith memo about its salary and billing rate reductions after the jump.
Will the Reed Smith system become the template for associate compensation at other firms? Let’s take a look at what Baker Botts is planning.
When ex-associates sue their former firms, a fun time is had by all — with the possible exception of the litigants. Dirty laundry is aired, often for the amusement of onlookers. Here are some classics:
Charlene Morisseau v. DLA Piper (African-American female associate filed $250 million lawsuit against her former firm; firm accused plaintiff of rudeness and insubordination, e.g., throwing a partner out of her office).
Today’s Lawsuit of the Day, Alan Levy v. Sedgwick Detert Moran Arnold LLP (PDF), is a similar suit. Alan Levy (pictured), a former associate at Sedgwick, alleges that his employment was terminated on the basis of disability — to wit, severe depression and a breakdown, brought on in part by the abusive treatment he received at the hands of a partner, Scott Haworth.
So, what was the alleged abuse inflicted upon Levy by Haworth?
Last week’s Career Center survey asked whether you think there will be enough work for the class of incoming associates at your firm. The good news is that, despite the all the hype about some firms indefinitely deferring new associates, the vast majority — 91% — of new associates are starting at their firms in Fall 2009 or are scheduled to start in the first half of 2010. The bad news is that a majority of respondents think there won’t be enough work for all this new blood, at least not in the practice areas they want to work in.
Check out the full survey results after the jump, and visit the Career Center, powered by Lateral Link , for more on which firm unexpectedly pushed up start dates, the latest firm to offer new associates "walk-away" money, and a firm that has made major changes to their lock-step compensation structure.
Survey results, after the jump.
In an environment where hours are scarce, a new report shows that white attorneys are coming out on top. A new survey suggests that African-American attorneys — and minority attorneys in general — are experiencing a greater pinch for hours than their white counterparts. The Minority Law Journal reports:
[M]inority lawyers surveyed said they posted fewer billable hours on average last year than their white counterparts. The average hours billed figure in 2008 was 1,862 for black midlevels, 1,925 for Asian Americans, 1,965 for Hispanics, and 1,976 for whites. And minority lawyers are unlikely to boost their relative output much in 2009. Projected billables for this year were just under 1,825 hours for Asian Americans and African Americans, about 1,840 for Hispanics, and roughly 1,890 for whites.
Hours are low all over, but these numbers indicate the pain is not being shared equally.
Are minority attorneys being “out-hustled” for work, or are these numbers just another manifestation of the old boys’ network?
More numbers from the report after the jump.
Are billing disputes between law firms and their clients on the rise in the recession? We feel like we’ve seen a lot of them lately.
The most recent disagreement involves Bingham McCutchen. A Boston-area investment company, Tuckerbrook Alternative Investments, has sued Bingham, claiming it was overcharged for legal services provided in connection with preparing an SEC registration statement.
The case isn’t that exciting — it seems like a garden-variety fee dispute — but this aspect struck us as interesting. From Massachusetts Lawyers Weekly (subscription):
The Sept. 16 complaint accuses Bingham of stacking the case with young associates who had “inadequate” experience. “The billing statements reflect that these junior lawyers in essence were enjoying the benefits of on-the-job-training at Tuckerbrook’s expense,” the complaint states.
So the allegation is that young lawyers were being trained on the client’s dime. But is that an indictment of Bingham McCutchen, or of the billable hour? Grumpy in-house lawyers regularly complain about paying for the training of Biglaw’s junior associates. This is why some corporate counsel explicitly refuse to pay for first- and second-year associates (and provide for that in their retainer agreements; presumably Tuckerbrook could have done that here).
More news about Bingham, including its summer associate offer rate and its real estate needs in New York, after the jump.
Do you have any friends who used to work with you at your Biglaw firm before moving on to a sweet in-house position? Do you complain to them about the financial problems at your firm?
If so, you should probably stop — because your colleagues turned clients really do not care about your problems. Bisnow hosted a conference about the future of the billable hour (gavel bang: ABA Journal). Washingtonian reports:
Michael Helfer, general counsel of CitiGroup and a panelist at the Bisnow event, put it bluntly when he said CitiGroup’s inhouse legal department has been reduced during the past few years by nearly 300 employees, many of whom were laid off. The lawyers who are left have had their compensation slashed by as much as 60 percent. Helfer says he’s consequently lost his patience for paying his company’s outside lawyers premium fees. “The amount of sympathy I have for the argument that $1,000 an hour is a reasonable rate . . . is nil.”
This is why firms like O’Melveny are putting together five-year strategic plans that contemplate alternative billing structures. But will these new fee arrangements still lead to enormous profits? Some D.C. details, after the jump.
The holiday season is upon us, and yet again, you have no idea what to get for the fickle lawyer in your life. We’re here to help. Even if your bonus check hasn’t arrived yet, any one of the gifts we’ve highlighted here could be a worthy substitute until your employer decides to make it rain.
We’ve got an eclectic selection for you to choose from, so settle in by that stack of documents yet to be reviewed and dig in…
Ed. note: The Asia Chronicles column is authored by Kinney Recruiting. Kinney has made more placements of U.S. associates, counsels and partners in Asia than any other recruiting firm in each of the past six years. You can reach them by email: firstname.lastname@example.org.
We currently have a very exciting and rare type of in-house opening in China at one of the world’s leading internet and social media companies. Our client is looking for an IP Transactional / TMT / Licensing attorney with 2 to 6 years experience. The new hire will be based in Shenzhen or Shanghai. Mandarin is not required (deal documentation will be in English) but is preferred. A solid reason to be in China and a commitment to that market is required of course. This new hire will likely be US qualified (but could also be qualified in UK or other jurisdictions) and with experience and training at a top law firm’s IP transactional / TMT practice and could be currently at a law firm or in-house. Qualified candidates currently Asia based, Europe based or US based will be considered. The new hire’s supervisors in this technology transactions in-house team are very well regarded US trained IP transactional lawyers, with substantial experience at Silicon Valley firms. The culture and atmosphere in this in-house group and the company in general is entrepreneurial, team oriented, and the work is cutting edge, even for a cutting edge industry. The upside of being in an important strategic in-house position in this fast growing and world leading internet company is of the “sky is the limit” variety. Its a very exciting place to be in China for a rising IP transactional lawyer in our opinion, for many reasons beyond the basic info we can share here in this ad / post. This is a special A+ opportunity.
If your firm is in ‘go’ mode when it comes to recruiting lateral partners with loyal clients, then take this quiz to see how well you measure up. Keep track of your ‘yes’ and ‘no’ responses.
1. Does your firm have a clearly defined strategy of practice groups that are priorities of growth for your office? Nothing gets done by random chance, but with a clear vision for the future. Identify the top practice areas for which you wish to add lateral partners. Seek input from practice group leaders and get specifics on needs, outcomes, and ideal target profiles.
2. In addition to clarifying your firm’s growth strategy, are you still open to the hire of a partner outside of your plan? I’ve made several placements that fit this category. The partner’s practice was not within the strategic growth plan of my client, but once the two parties started talking with each other, we all saw how it could indeed be a seamless fit. Be open to “Opportunistic Hires.” You never know where your next producing partner might come from, so you have to be open to it. I will be the first to admit that there is a quirky element of randomness in recruiting.
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