Fried Frank

Associate Bonus Watch: Fried Frank’s Black Box of Bonuses

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2009 Associate bonus watch above the law.JPGThis morning brings associate bonus news from Fried Frank. The firm’s bonus announcement reflects the broader Biglaw trend of moving away from a lockstep compensation system.
Last year, Fried Frank employed a standard bonus schedule, along Cravath lines, with bonuses paid out in accordance with seniority. This year, the firm has ditched the traditional class-year bonus schedule, instead paying “year-end bonuses to New York associates in varying amounts up to $35,000.”
So the firm is doling out bonuses “in varying amounts,” up to $35,000 — the top of this year’s Sullivan & Cromwell bonus schedule. But Fried Frank provides no information as to distribution of bonuses, mean or median amounts, etc. (unlike, say, Latham, which does provide such distributional info about bonuses).
What determines the amount of your bonus at Fried Frank? Several factors, including “seniority, levels of activity, quality of and hours worked, client service and contributions to pro bono activities.” Translation: the firm reserves complete and total discretion with respect to bonuses. There isn’t even a bonus guarantee based on hitting certain billable-hours targets.
The full memo appears after the jump. If you’re at Fried Frank, feel free to compare notes about your bonuses in the comments. Is this opacity a way for Fried Frank to get away with paying out less in bonuses? Or is the firm paying out basically the same as under a lockstep system, but just rewarding the high performers and punishing the laggards?
As always, please send us law firm bonus news to us by email (subject line: “[Firm Name] Bonus News”). Thanks.
P.S. The Fried Frank bonus announcement is for New York. We don’t know what FFHSJ plans to do for its D.C. or international associates.

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Do Jon Mechanic and Fried Frank Have the ‘Un-Midas’ Touch?

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Fried Frank logo.jpgWhat role do lawyers have in advising their clients on business matters? Some might say: None.
“The client decides on the business objective, and the lawyer helps the client reach that objective, as long as it’s legal,” this line of thinking goes. “And why would you want lawyers giving business advice anyway? They have no business training — and judging from how large law firms have fared in the Great Recession, they don’t seem to be particularly good at business either.”
On the other hand, one thing we commonly hear from the in-house lawyers we speak with is that they do give a combination of legal and business advice (not surprising, given that they have one client, which they want to see prosper). And some top law firm lawyers also get involved in the business side of things; they’re dealmakers in their own right, not just the folks who “paper up” the deals dreamed up by investment bankers. E.g, H. Rodgin Cohen of Sullivan & Cromwell, who played a major role in various bank M&A deals last fall.
Jonathan Mechanic Jonathan L Mechanic Jon Mechanic Fried Frank real estate.jpgFried Frank partner Jonathan Mechanic (pictured) — chair of that firm’s high-powered real estate group, with a top ranking from Chambers and Partners — is arguably the real estate world’s answer to Rodge Cohen. In the New York Observer, Dana Rubinstein began an August 2008 interview with Mechanic by citing a study declaring him to be “the best-connected and most powerful real estate lawyer in the world.”
But at least one ATL reader holds the opinion — a minority opinion, it should be noted — that Jon Mechanic’s track record isn’t so stellar.
The bill of particulars against Jon Mechanic and Fried Frank, after the jump.

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Fall Recruiting Open Thread: Vault 31 – 40 (2010)

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comparing.jpgAs we roll through the next segment of the 2010 Vault rankings, we get into some firms that have been caught testing the stealth layoff waters. To refresh your memory, here is the next list of firms:

31. Milbank Tweed Hadley & McCloy
32. Paul Hastings Janofsky & Walker
33. Akin Gump Strauss Hauer & Feld
34. Fried Frank Harris Shriver & Jacobson
35. Winston & Strawn
36. Allen & Overy
37. Willkie Farr & Gallagher
38. Freshfields Bruckhaus Deringer
39. Baker Botts
40. Munger Tolles & Olson

Check out the big move by Munger. It’s up 11 spots on this year’s list. And let’s not forget about the firm’s #1 A-List ranking by Am Law earlier this year. Munger’s managed to do all of this without laying off a massive number of associates. Hopefully other Biglaw firms (and current 2Ls) will take note.
We know people have strong opinions about some of the firms on this list. Let’s get into them after the jump.

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Nationwide Layoff Watch: Fried Frank Public(!) Layoffs

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Fried Frank logo.jpgLate last week, we told you that bad things were coming down the pipe at Fried Frank. This morning, the firm announced that 99 people will be let go:

Effective today, we are implementing changes that will result in an overall reduction of 41 associates and 58 administrative staff from our U.S. workforce. This decision is one we worked very hard to avoid. But we must respond responsibly to the current environment. We would like to express our appreciation to everyone impacted by these decisions for all they have done for our Firm and our clients.

The economy is so bad that even firms that “don’t do lawyer layoffs” are having to do lawyer layoffs.

It’s not even surprising anymore that the firm is deferring all incoming first-year associates to January 2010. Fried Frank is also following the trend of asking associates to defer until the fall of 2010:

Additional steps announced today pertain to our fall 2009 class and our 2009 summer associate programs in the U.S. The start date of our fall 2009 class has been deferred to January 28, 2010. All incoming associates whose start date is deferred until January 2010 will receive a $10,000 stipend. We are also offering an opportunity for members of the fall 2009 class to defer until the fall 2010. We are encouraging those associates to develop their legal skills by pursuing a public interest or government position or by volunteering with a legal, political or community-based organization. Those who elect this deferral will receive a stipend of $70,000 plus health benefits.

And Fried Frank is cutting its summer program from 12 weeks down to 10.

Ninety-nine layoffs. Shortening of summer programs. Deferral of incoming associates:

I don’t like,
I don’t like,
I don’t like Mondays.

Read the full memo after the jump.

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Fried Frank Promotes Renewed Emphasis on Billing Policies (And cuts back on some perks.)

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Fried Frank logo.jpgAs many of you know, part of the problem firms are facing during these challenging times is that clients won’t pay their bills. Lawyers can’t get paid unless clients pay.

Whether or not clients are willing or able to pay, it certainly won’t happen unless they are billed. Hence, as most associates already know, the days of delinquent time entry are at an end.

But Fried Frank is taking it to a whole new level. Instead of making sure your time is up to date every month or every couple of weeks, Fried Frank wants attorneys to accurately close out their time every single day. This is from a firm-wide memo that went out last week:

The importance of accurately billing and recording time – both from an economic and an ethical standpoint – cannot be overemphasized. Accuracy is essential both for the Firm and its clients. To ensure accuracy, it is Firm policy that attorney time must be entered and released on a daily basis. This memorandum covers the Firm’s current client billing policies and guidelines.

Most of Fried Frank’s billing policy is pretty standard and common sense stuff (you can download the full policy after the jump). But there are some significant changes.

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Associate Bonus Watch: Fried Frank Wades Into Half-Skadden Pool

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After stealthily laying off at least 30 associates, the Fried Frank bonus announcement should come as no surprise:

FF bonus memo.jpg

law firm associate bonus watch 2008 biglaw bonuses.jpgNobody expected Fried Frank to break into Skadden territory on bonuses. But at least there is a nod towards the reason for paying the low-end bonuses championed by Cravath:

Current global economic conditions have presented new challenges for our clients and your contributions play an important role in our ability to work together to meet these challenges.

Let’s close off the Fried Frank loop after the jump.

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Nationwide Layoff Watch: Fried Frank Stealth Layoff Update

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Fried Frank Harris Shriver Jacobson LLP Abovethelaw Above the Law blog.jpg… And now back to our regularly scheduled programing …

We are now able to report that at least 15 litigation associates at Fried Frank have been laid off in the past week.

At least 15 litigation associates, but the numbers could be higher. Multiple tipsters report that there are many “skeletons” in the Fried Frank closet right now.

Over a week ago, we reported that 15 corporate associates had been let go. At that time, we also said that the number of corporate layoffs could be higher than 15. We’ve received information since then that more than 15 corporate associates were laid off, but we can’t get a handle on the true number. So, conservatively speaking, we’re reporting 30 associates that have been let go from Fried Frank over the past two weeks.

More about Fried Frank’s layoffs after the jump.

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Nationwide Layoff Watch: Stealth Layoffs at Fried Frank

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Fried Frank Harris Shriver Jacobson LLP Abovethelaw Above the Law blog.jpgWe’ve gotten credible information that Fried Frank has laid off at least 15 associates from their corporate department, including 6 in the real estate practice group. A tipster collects the information in a clear way:

They are veiled as performance-based reviews, but virtually everyone is getting a negative review (mostly, it seems, to justify in a paper-trail [a decision] to not give bonuses)….

There has been no formal review process announced, and no one knows what directive came from management last weekend at the partner retreat, but it seems that each group was told to make cuts. People were completely taken off guard when they started getting calls earlier in the week calling them in for their reviews, some of which dredged up years-old information to use as justification for lay-offs, and many of which lasted only 5 minutes or so. Most of the layoffs have been mid-level associates and up, but most junior associates have not yet been reviewed.

The axe is expected to fall on the litigation side of the firm today.

The firm has not responded to voice messages or emails left earlier today. The number of layoffs could be higher than what we are reporting, but right now the best number is 15.

We understand that a three-month severance package has been offered.

Every single tipster (and there are a lot of them) said that the laid-off attorneys were told that they were being let go for performance reasons.

But that’s not all they were told. Read the rest, after the jump.

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Fried Frank Turns Holiday Party into a Robin Hood Affair

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Fried Frank Harris Shriver Jacobson LLP Abovethelaw Above the Law blog.jpgGiven the list of associate “perks” firms could be cutting back on during these tough economic times, the latest news from Fried Frank seems very reasonable. Associates at Fried Frank were told today:

Dear All,

In light of continued turmoil in the financial markets and the wider economy, and the effect it is having on so many we know, we think it is not appropriate to host Firm holiday parties this year.

The Firm has a strong platform and business with which to succeed in this very demanding business environment and continues to be involved in many interesting and challenging matters for our clients. Instead of the parties, the Firm will be making charitable contributions to certain organizations who rely on donations during the holiday season to accomplish their purpose during this time of year and which are feeling the effects of the slowdown in the economy.

Thanks very much.

Valerie Jacob and Justin Spendlove

Despite the success of last year’s bash at Cipriani on Wall Street, this would seem to help associates in two ways. It saves the firm money — without firing anybody. That is an unqualified good.

But also: who enjoys the firm holiday party anyway? It’s just an opportunity for associates to get too drunk and do something colossally stupid that will no doubt end up on Above the Law. (Please don’t cancel the holiday party Mr. Fried and Mr. Frank!)

Seriously though, saving a bit of cash is a good thing for associates. And not for nothing, but giving some extra money to charities during what is sure to be a terrible season for charitable donations is really a great thing to do. During times of economic recession people tend to give less, precisely at times when charities need more.

But it might not be all Salvation Santas at Fried Frank this winter. More after the jump.

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Fall Recruiting Open Thread: Vault 31-40 (2009)

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comparing.jpgWelcome to another post in the 2009 Vault 100 open thread series. You all seem to like having the law firms listed in groups of ten, so we’ll keep it up. Here are the thirty-something firms from the Vault 100, with prestige scores in parentheses:

31. Fried, Frank, Harris, Shriver & Jacobson LLP (6.461)
32. Freshfields Bruckhaus Deringer LLP (6.327)
33. Akin Gump Strauss Hauer & Feld LLP (6.313)
34. Winston & Strawn LLP (6.275)
35. Quinn Emanuel Urquhart Oliver & Hedges LLP (6.235)
36. Willkie Farr & Gallagher LLP (6.174)
37. Orrick, Herrington & Sutcliffe (6.173)
38. Allen & Overy LLP (6.147)
39. Cadwalader, Wickersham & Taft (6.131)
40. Proskauer Rose LLP (6.102)

Fried Frank and Cadwalader have been on the ATL radar of late. We broke news of staff layoffs at Fried Frank earlier this week, and news of the attorney bloodletting at Cadwalader last month. As noted in Cadwalader’s notable perks: “ouch, layoffs.” (Speaking of, in going through the Vault 100 list, we’ve discovered that Vault’s definition of “perk” is very different from ours.)
In the comments, the curious can pose questions, and the insiders can share insights. More threads to come.
Earlier: Vault 100 Open Threads – 2009

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