What do you do when the demand for legal services falls into the gutter? Did you answer: make up a new, unnecessary service to artificially drum up business? Then congratulations, you’re well on your way to making partner!
A Biglaw firm is pitching a “second opinion” service, asking clients to throw a couple of bucks their way to confirm or reject the conclusions of the client’s primary lawyers. Lawyers love being second-guessed, so this practice makes firms and clients alike more than a little nervous.
However, it’s all about how you pitch it, and with the right spin this just might be the best idea anyone’s had to shore up some business in a while….
Alan Salpeter, currently with Kaye Scholer, is the man behind this new strategy. Salpeter is a refugee from the Dewey & LeBoeuf debacle, and prior to that he served as the litigation department chair for Mayer Brown — rendering him a passing character in The New Republic’s indictment of Biglaw, which was really just an indictment of Mayer Brown. David thought the article made Salpeter sound like an old man yelling at the kids to get off his lawn, so inventing a new line of business is not what we’d expected to see from him.
Mr. Salpeter, a former co-chair of Mayer Brown LLP’s litigation department, believes his firm can overcome potential hangups and help would-be clients, relatively cheaply, decide whether to go to trial or settle high-stakes cases or appeal adverse verdicts.
On offer are free one-day consultations and flat-fee engagements ranging from $100,000 to about $500,000, he says. His second selling point is the blended perspective of the three principals: Mr. Salpeter’s decades of trial experience, appellate lawyer Steven Rosenthal’s input from Washington, and a former judge’s viewpoint from James Catterson, who recently joined the firm in New York.
“We all look at litigation through a different lens,” said Mr. Salpeter, 66, who at Mayer Brown defended Oracle Corp. CEO Larry Ellison against insider trading charges and won a $50 million settlement on behalf of litigation consultant Lexecon Inc.
If you think no one would pay half a million to get a rubber stamp, you don’t have the appropriate contempt for your clients. Unfortunately for Salpeter, it looks like clients aren’t buying it.
Some general counsels remain cool to the process. After hiring a top-tier law firm, they are reluctant to second-guess their own judgment and wonder what a contrary second opinion gains them.
“I just don’t see it catching on among highly competitive firms, which is essentially all of them,” said Chicago-based legal industry consultant Joel Henning. “Most law firms and lawyers will be reluctant to get into this game for fear of retaliation.”
That makes sense. Biglaw firms will mostly resent second-guessing, but there is a way to position this service to take advantage of market realities. Instead of casting this business as a second opinion for other, similarly situated firms, Kaye Scholer should sell this as insurance and peace of mind for clients increasingly turning toward lower-profile firms. A reasonably priced second opinion from a Biglaw firm allows general counsel to employ the smaller, less prestigious firm they already hire while still signaling to management that the work product has the blessing of a traditional, established firm. Sure some Biglaw firms will balk at anything that gives clients cover for hiring smaller firms, but it’s time for a reality check: they’re already doing it.
The Biglaw on-campus recruiting season is a subject of decreasing relevance for most aspiring lawyers, as illustrated by this grim infographic. We are all familiar with the parade of horribles that is the law firm recruitment market, at least from the student point of view. Since the halcyon days of 2007, summer associate class sizes are down at the overwhelming majority of large law firms, often by fifty percent or more. And of course nobody is seriously arguing that class sizes will ever rebound to their pre-recession levels. But 50 percent is not 100 percent; there are still 2Ls who have just made their way through the OCI cattle call.
About a month back, we asked our readers to share their experiences of the OCI process. We wanted to learn where student priorities fall during this era of “New Normal.” For those of you fortunate enough to be in a position to choose among employers, what are the factors driving your decisions? What, if anything, is likely to make you reject an offer? And what, in this unbalanced buyers’ market for legal talent, is the actual interview experience like?
For Biglaw aspirants, apparently “culture” is the paramount consideration, followed by “practice strength.” When asked to “rank the three most important factors you consider before accepting a firm’s offer,” our survey respondents put forth the following hierarchy of variables:
Even if Biglaw firms have not scaled back their (rhetorical, at least) commitments to diversity and pro bono, these factors appear to be marginal concerns for candidates.
When is comes to the luxury problem of rejecting a firm’s offer, a similar emphasis on cultural factors applies:
So “culture” cuts both ways: it can be the most or least attractive aspect of a potential employer. Runner-up among the “reject factors” is “Professionalism and friendliness of firm members.” This is not surprising, as this is probably the factor mostly closely synonymous to “culture.” So how did these two factors manifest themselves in the 20-minute speed dating context of OCI?
Clearly impressions of OCI are highly subjective and prone to the distortions of individual personalities on both sides of the transaction. Yet, reading through the comments from the 2Ls, the experiences appear to have been roughly one-third positive or neutral and two-thirds negative. In the former, less common scenario, the firms appear to have sent friendly, engaged firm representatives who were capable of at least feigning interest in the interviewees. In the majority of accounts, however, the students encountered anything from indifference to awkwardness to rudeness. In other words, the reality of the “buyers’ market” was not just a subtext of the process, it was explicit. Considering all the market realities, one can hardly gainsay the words of Skadden’s director of attorney recruiting when she said (at the 2013 NALP Conference), “These days we’re looking for any reason not to hire a summer associate.” But does it have to be so obvious?
Therefore, as a service to the hardworking folks in Biglaw recruiting, we offer here a few OCI prescriptive takeaways gleaned from our survey responses, each accompanied by an illustrative quote or two.
Please pretend to care.
My [FIRM] interviewers were very disengaged — interviewed with one partner, who was out of the room on a conference call for most of the interview and came back most of the way through and then asked to wrap it up.
Interviewer was really dismissive — and went on some long lecture about how the economy was worse when he graduated law school than it is now. Cool story, bro.
[Interviewer] took a client call for the first fifteen minutes after introductions and then asked if I had questions.
Please stop asking “why?”
Q. “Why New York?” Me: I get asking “Why DC,” “Why Boston,” “Why SF.” But, really? Why NY? Because I don’t mind the smell of urine and I want a job.
I didn’t have a good answer to “why [FIRM]” (the answer: why not?), so I wasn’t surprised to get the ding.
Please don’t get political.
Rude interviewer. Didn’t like a conservative political group I was involved in and most of the interview revolved around that.
[The interviewer] looked at my (liberal) résumé and then decided they didn’t have any questions for me, before asking if I had questions for them (and I thought they weren’t allowed to discriminate on the basis of political affiliation…)
Please don’t be a socially awkward weirdo.
Interviewer literally sat there and stared at me. There were multiple instances of a good 30 seconds of silence while he either stared at me or my résumé until I said something.
The partner from [FIRM] was reciting questions as if a robot.
Interview was like talking to a brick wall.
Finally, let’s end on a happy, congratulatory note. Here are the firms that received the highest student ratings for their performance during OCI (on a scale of 1 to 4, with 4 the highest rating):
Kudos to all these firms on a job well done. And good luck to all law students everywhere in their job searches.
* It looks like it’s time for yet another rousing game of Biglaw musical chairs. This time, 11 of Bingham McCutchen’s securities enforcement partners are hightailing it over to Sidley Austin en masse. [DealBook / New York Times]
* This week in on-shore outsourcing: there may be a job waiting for you at Kaye Scholer’s new operations center (so new we bet you didn’t know about it), so hurry up and apply, because the interviews are soon. [Tallahassee Democrat]
* “We’re trained in the law and persuasion, not firearms.” But maybe you should be? After the targeted killing of attorneys in Texas, prosecutors are now on high alert. [New York Times]
* When looking at the current law school model, Paul Caron of TaxProf Blog urges law deans to take advice from Jimmy McMillan because “law school tuition is simply too damn high.” [Businessweek]
* Change our admissions practices amid the worst legal economy we’ve seen in decades? “Ain’t nobody got time for that,” scoffed Sarah Zearfoss, director of admissions at Michigan Law. [AnnArbor.com]
* Drexel Law will accept applications for its two-year law degree program in May 2014. The higher-ups at the ABA are scheduled to laugh their asses off on or about the same date. [Philadelphia Inquirer]
* “[F]or James Eagan Holmes, justice is death.” In a move that shocked absolutely no one, the prosecution in the Aurora, Colorado movie theater massacre case is seeking the death penalty. [CNN]
At Kaye Scholer, high billers get something extra stuffed in their stockings. How much are we talking about?
We haven’t seen the Kaye Scholer bonus memo yet, but here’s a report from Am Law Daily:
Associates who pass the 2,200-hour threshold will receive added payments starting at $10,000 (for first-years) and topping out at $20,000 (for eighth years and those with more seniority) that will be tacked on to the standard $10,000–$60,000 bonus scale set by Cravath. High-billing third-year associates, for instance, will receive $35,000 apiece, compared to the so-called Cravath scale’s $20,000, while fifth-years will get $49,000 each rather than $34,000.
In a statement, Kaye Scholer managing partner Michael Solow explained why the New York–based firm is employing a two-tiered bonus system for the third consecutive year.
“A law firm is only as strong as its people, and bonuses are designed to recognize those who not only meet, but regularly exceed expectations,” Solow said. “Every year there are some associates whose performance is truly outstanding, sacrificing from their personal lives to serve Kaye Scholer and our clients. We therefore only think it appropriate that those associates deserve a little extra at bonus time.”
One could argue about whether the extra money is worth the extra billable hours, especially since 2200 hours is a lot of hours. At the same time, many associates don’t have great control over their hours (which is one of the toughest parts about toiling in Biglaw). So if you have to work a ton of hours, due to deals or trials or whatnot, you might as well get paid for it, right?
Congratulations to the Kaye Scholer associates, especially the high-billing ones, on the nice bonuses.
(If you have a copy of the Kaye Scholer bonus memo, feel free to shoot us a copy. We’ll update this post to add the memo if we receive it. Thanks.)
As we reported over the weekend, it’s looking like Dewey & LeBoeuf will soon find itself in bankruptcy (perhaps voluntarily, perhaps not). The specter of bankruptcy raises a question for the many former partners of Dewey: dude, where’s my car capital contribution?
Let’s find out — and get the latest dispatches on the Dewey death spiral, including news of a new home for former vice chair Ralph Ferrara….
In the Wall Street Journal (sub. req.), Jennifer Smith has an interesting story on what happens to partner capital when a firm goes under. She introduces the piece with the tale of Andrew Ness, a current Jones Day partner who hasn’t had the best of luck with his capital contributions — or, for that matter, his choices in firms. Check out where he has been:
Early on, the small boutique firm where Mr. Ness was first made partner dissolved, taking his money with it. Later Mr. Ness joined Thelen LLP and then Howrey LLP, two now-defunct firms that entered bankruptcy in 2009 and 2011, respectively.
Yikes. It seems like Andy Ness is trying to compete with Henry Bunsow for the “Angel of Death” title. It’s a good thing he’s at Jones Day; JD might not be the sexiest firm, but it certainly is stable and well-run (unlike so many other firms, it didn’t resort to mass layoffs during the recession).
“I did not see a dime of capital returned and don’t expect to see a dime,” Mr. Ness said.
To be sure, partners at big law firms are typically in a better position — and have a more ample financial cushion — than the legions of secretaries and associate attorneys who lose their jobs when such firms fail.
But partners who flee failing law firms such as Dewey & LeBoeuf LLP, which is heavily indebted and winding down its affairs after a rocky five-month run of partner exits, face a dilemma most job seekers don’t. When those lawyers land a new gig, they have to pony up money to join the partnership, often without any guarantee that they will recoup their capital stakes from the previous firm.
Can you say “first world problems”? Or “rich people problems”? If you enjoy a seven-figure or even high six-figure income as a law firm partner, having to kick in some fraction of your compensation, amounting to a few hundred grand, shouldn’t be that big a deal.
And if your firm’s capital contribution squeezes you financially, perhaps you need to live a less extravagant lifestyle? In this day and age, any Biglaw partner worth his or her salt should have a lot of cash or cash equivalents on hand, in case a move is necessary.
For folks not familiar with law firm finances, the WSJ piece contains a short primer:
Like large medical practices or accounting firms, big law firms are jointly owned by partners. Each has a stake in the business: They invest money into the firm to help it operate, and take in a share of the profit.
Depending on the firm, capital requirements might range from 20% to as much as 60% of what a partner expects to earn in a given year. A young partner could be on the hook for $100,000 to $200,000.
The partner capital, along with money borrowed through a revolving credit facility (if the firm has one), is used to run the firm. Over the course of the year, as the firm earns and collects fees from its clients, it pays down the revolver and distributes profits to its partners. As the year winds down, partners start getting increasingly delicious distributions, checks for six- or seven-figure sums. It’s pretty sweet.
Of course, the bigger a partner’s share of the profits, the more she generally has to put up as capital:
[A] seasoned lateral hire from another law firm who pulls in $1 million to $2 million a year might be asked to put in as much as half of what he or she expects to earn in a year. Often, the money is due upfront.
To smooth the path, many firms offer loan programs that allow partners to borrow money at attractive rates while they wait for their old firms to pay back their capital. Repayment can take anywhere from one to five years, depending on a firm’s partnership agreement.
So what’s going on with the Dewey partnership? It’s not looking good:
Dewey & LeBoeuf has yet to pay return capital owed to dozens of partners who left Dewey Ballantine LLP before it merged with LeBoeuf, Lamb, Greene & MacCrae LLP in 2007, according to those former partners. Those who took out loans from Barclays Bank PLC’s corporate-banking division say Dewey began skipping bank payments in 2008 and 2010, citing a lack of funds, then set up a new payment schedule that further delayed the return of capital.
Say what??? Legacy Dewey Ballantine hasn’t paid back former partners who left before the ill-fated merger with LeBoeuf Lamb? That’s pretty amazing, actually.
In 2011, Dewey sent those partners quarterly statements indicating that money was being deducted from the firm’s capital account and paid back to the bank. But a former partner who contacted Barclays earlier this year was told that no payments on the loan principal had been made in 2011. In a February email shared with an online group of former partners, Dewey’s general counsel, Janis Meyer, said the mix-up was because the statements didn’t provide enough room to explain the situation, and promised to pay interest on the missed payments.
An offer from Dewey of repayment with interest is like a proposal from your gay lover in North Carolina: it’s a nice gesture, but it ain’t gonna happen. If you believe that it is, well, you probably also think that Steve DiCarmine’s tan is natural.
In other Dewey news, we have some significant partner moves to report….
In the world of Biglaw, the subject of bonuses is a hot-button issue. People will disagree, often vehemently, on whether the bonuses paid by a particular firm are generous or cheap. To paraphrase an old joke, if you ask two people about bonuses, you’ll get three opinions.
Given these frequent differences of opinion, whenever we publish an Associate Bonus Watch post, we’re eager to get opinions and additional information from you, our readers. As you can see from looking back at our prior bonus coverage, we often update our bonus posts to add new information or another point of view. You can send us reactions to your firm’s bonuses — or news of bonuses we have not yet covered — by email or by text message (646-820-8477 / 646-820-TIPS).
[Cravath has "practice area attorneys" or "specialist attorneys" who] run complex portions of deals (e.g., derivatives, real estate, UCC, etc.), where it’s not as economical to have too many partners…. [These non-partnership-track lawyers] aren’t paid bonuses on the same scale as associates, so while they may technically be older than class of 2003, their comp isn’t on that scale.
The Cravath bonus memo itself also expressly states that “[b]onuses for senior attorneys, specialist attorneys, discovery specialist attorneys and foreign associate attorneys will be determined on an individual basis.”
In other words, there are some non-partner lawyers at Cravath, from the class of 2003 and more senior, who probably received bonuses equal to or greater than the $42,500 that is the top bonus at S&C and several other firms (e.g., Dewey, Cadwalader, Paul Weiss, Davis Polk, Debevoise, Cleary, and Simpson). So it may not be perfectly accurate, in the most technical sense, to refer to the CSM bonus scale as “lower” than the S&C bonus scale (although it is a convenient shorthand, which we may continue to use for that reason).
In his discussion of the Kaye Scholer bonus announcement, Elie sounded some critical notes. But a number of KS sources came forward, in the comments and by email, to defend their firm. They made the following points:
(a) High-billing associates at Kaye Scholer — i.e., associates with over 2400 hours — did significantly better than their Cravath counterparts. And according to one commenter, “Kaye hours include pro bono and business development,” so “almost everyone gets 2400.”
UPDATE (3 PM): From a different Kaye Scholer source, disagreeing with point (a) above: “Pro bono / client development is CAPPED at 150 hours for bonus purposes. Most associates do NOT hit 2400. Only a handful hit it each year, and this year is no different. Many parts of the firm are slow and a large number of associates didn’t even get 1950 this year.”
(Kaye Scholer folks, I love you guys, but that’s it for the updates. If you have a point you want to make about your bonuses or compensation, please put it in the comments to this post or the prior post. Thanks.)
(b) Members of the class of 2011 have been informed “that they’re ALL getting a pro-rated full ‘Tier One’ bonus, regardless of whether those associates have billed the pro-rated hours. So, that’s an hours-independent bonus prorated off $7,500 $2,500 2011 ‘spring bonus’ (and yes they’re even giving credit for the spring bonus that happened before the new class started).”
(c) Kaye Scholer’s “true up” with respect to 2011 spring bonuses, which Elie criticized as tardy, could have a salutary effect. According to one source, it “may encourage some firms that did not pay spring bonuses to make up for it like KS did.”
So, if you thought that the prior Kaye Scholer report was unduly harsh, please consider these positive observations.
Last night, Kaye Scholer announced a match of the Cravath bonus scale from this season. And a match of the Cravath spring bonus from last season. But that has nothing to do with 2012 spring bonuses, which Sullivan & Cromwell alluded to last night. So even as Kaye Scholer associates are being “made whole” from the firm’s cheap stance on the last bonus season, it looks like they’re already starting this bonus season in the hole.
Keeping you updated about the latest bonus shenanigans is what Above the Law is here for….
Last spring, Kaye Scholer took a lot of heat for refusing to match spring bonuses. Eventually, the firm promised to offer a “make whole” bonus at the end of the year, but clearly Kaye Scholer partners were reluctant to stay near the top of the New York associate compensation market.
Perhaps Kaye Scholer partners were reluctant for good reason. The firm made our list of firms that are paying the most (as a percentage of profits per partner) to keep up with Cravath. That doesn’t mean that Kaye can’t afford to pay a market-level bonus; it just means that it hurts them a little more to do so. In a rational world — one in which law firms paid bonuses based on their own financials, as opposed to following what Cravath does — Kaye Scholer bonuses would probably be a little bit less than Cravath bonuses.
Of course, in a rational world, Cravath bonuses would probably be much larger to begin with, and lawyers wouldn’t be working 80-hour weeks just to keep up. Just because rational people work in Biglaw doesn’t mean that the business operates reasonably.
But it is difficult to pull a fast one on groups of trained attorneys. If you look too quickly, the bonus chart Kaye Scholer circulated internally yesterday makes it look like the firm is paying spring bonuses for this year’s cycle. Kaye Scholer has two “tiers” of associates. One is on a 1950-hour scale, the other is on a whopping 2400-hour scale. Here’s how the bonuses for the two tiers are expressed in the Kaye Scholer memo:
You can see the conceit here. Kaye is putting together last spring and this fall’s bonuses into one payment, but that’s not what really happened. What really happened is that Kaye withheld the spring bonus from last spring until now, matched Cravath’s low-ball, year-end bonus, and makes no promises about paying a spring bonus this spring when S&C (and most other firms) most likely will make an additional reward.
I warned you in September that some firms would probably try to pull this. The people at Kaye Scholer know exactly how much they are getting paid relative to their Biglaw colleagues, and when. But if putting it like this can confuse some media types who aren’t paying attention, or new recruits, so be it.
At least Kaye Scholer did keep its word. When the firm came out with this wacky spring bonus withholding program, many associates thought the firm would be too cheap to even follow through on the promise. Kaye Scholer is also paying a stub year bonus for the class of 2011. So, there’s that.
But I wouldn’t expect Kaye Scholer to be a timely follower of spring bonuses for this cycle. Maybe they just can’t afford it?
Click ahead to the next page to view Kaye Scholer’s full bonus memo (or just click here).
Agreeing on this point is former Kirkland & Ellis partner Steven Harper (whose apparent pro-associate stance may make him a sort of Biglaw apostate). As Harper points out, “equity partner profit trees have resumed their growth to the sky. As the economy struggled, Cravath’s average partner profits increased to $2.7 million in 2009 and to $3.17 million in 2010 … That’s not ‘treading water.’ It’s returning to 2007 profit levels — the height of ‘amazing’ boom years that most observers had declared gone forever. Watch for 2011 profits to be even higher.”
And yet associate bonuses remain stagnant at 2009 levels. Furthermore, as ATL commenter “The Cravath Cut” is so fond of noting, when viewed as a percentage of profits, bonuses appear especially measly, at least from the associate p.o.v. (The current $7,500 market rate for first-years is just 0.23% of Cravath’s profits per partner. Back in 2007, first-year bonuses equalled 1.36%.) Despite these numbers, if history has taught us anything, it is that you can kill anyone Biglaw’s rank and file will follow Cravath’s lead.
Cravath is among the most profitable firms in the world. We thought it would be interesting to see what the implications of matching Cravath are for those firms with much lower profit margins. Which firms’ partners willingly take the biggest hit by keeping up? Are these firms arguably more “generous”? After the jump, check out those firms that pay the largest percentage of PPP in bonuses.
Please note that we considered only those firms with transparent lockstep (or nearly so) bonus scales. We’ve left out many firms with merit-based (or simply opaque) compensation formulas. The “score” is simply last year’s first-year bonus amount (including the 2011 spring bonuses) expressed as a percentage of the firm’s PPP. Also, obviously, we’ve made the assumption that the firms will repeat their behavior from last year and again pay “market” bonuses.
There are at least two ways of looking at this group. The partners are (a) willing to share the wealth with the associates and/or (b) so keen on retaining membership (or the appearance of membership) among Biglaw’s elite that they make dubious business decisions. Are these interpretations mutually exclusive?
In any event, here are the Top 10 in our “Partner Generosity Rankings” (or, alternatively, the “Irrational Wannabe Rankings”):
Partners are usually best remembered for behaving badly, or worse, treating associates badly. But not the partners who made our “Top Partners to Work For” list.
Last week, we asked you to nominate the best Biglaw partners you work for, tell us why they are the best, and rate them in six categories: expertise within the practice area, quality of work given to associates, hands-on training given to associates, provision of feedback on associate work, respect for associates’ schedules, and professionalism with associates.
Over the next several weeks, we will reveal who these exceptional partners are in a multi-part Career Center survey results series, sponsored by Lateral Link. We kick off the series this week with the New York partners, and then we’ll make our way around the country.
Let’s get to know the first eight partners and find out why associates say they are the best to work for….
Stewart Aaron. An associate praises Aaron, an Arnold & Porter litigation partner, for “set[ting] the example of the kind of lawyer I want to be. He is quietly expert. He sets and keeps reasonable deadlines. He stands by his team.”
Arthur Burke. A Davis Polk litigation partner, Burke is known to be one of the best partners to work for because of the early responsibility he gives to associates. One associate reports that, “As a first year, he let me second chair a trial. As a second year, he sent me to argue a motion alone. Art has high standards but if you meet them, he treats you very well.”
Jane Byrne. Byrne, a Quinn Emanuel insurance and reinsurance litigation partner, is a perfect example of a partner who associates enjoy working for: “Virtually every associate that works with her considers her to be one of the best kept-secrets of firm life. She gives associates fantastic deposition experience, lets them take ownership of experts, witnesses, and key briefing. She engages them on the matter and empowers them to bring her creative ideas and suggestions. She values associate contributions, and will take their opinions seriously even when (especially when) they disagree with her. She is incredibly respectful of associates’ personal lives and is the absolute gold standard for how to treat junior associates. Her teams adore her and will go out of their way to deliver the best work product possible. She has mastered the art of motivating junior associates with praise rather than fear, and that is unheard of at most firms.”
Ken Coleman. An associate recommends working for Coleman, an Allen & Overy bankruptcy partner and head of the firm’s U.S. Restructuring group, because he is “[t]ruly a nice guy who gives associates’ private lives as much respect as you’ll find in Biglaw,” and “gets associates very involved from the beginning with lots of client contact.”
Dan DiNapoli. DiNapoli, a Kaye Scholer intellectual property partner, recently made headlines for winning a patent case preserving Pfizer’s market exclusivity for its Viagra drug. But associates say that there’s more than just his ability to win trials that makes him one of the best partners to work for: “Dan is a fantastic mentor that teaches associates how to practice and think like a winning lawyer. Dan also sincerely takes associate training and development seriously, and tries to provide developmental experience opportunities to each of the associates working for him.” In addition, “Dan respects and understands that even associates may have lives outside the firm,” and he is “one of the most approachable and down to earth partners in the firm.”
Dickerson Downing. Downing, a Crowell & Moring intellectual property partner, is commended for being a “[s]tand up guy, very easy going, and very bright,” and for having a “sense of humor [that] is appreciated by all.”
Robert Downes. An associate praises Downes, managing partner of Sullivan & Cromwell’s Corporate and Finance group, for not only setting the bar for the firm in all survey categories, but for also being “[o]ne of the nicer people I’ve met, inside or outside the firm,” and “[i]ncredibly good at what he does and a real pleasure to work with.”
Stay tuned as we continue our coverage of the top New York partners before moving on to other major cities. For more information about the leading law firms at which these partners work, head over to the Career Center, powered by Lateral Link.
While performing here at the ATL Cabaret on Wednesday night, the celebrated drag queen of Biglaw, Kaye Scholer, was pelted with rotten fruit — by her own associates. If you haven’t done so already, do check out their rage-filled rants. (If nothing else, they’ll make you feel better about your own firm.)
As we’ve stated before, we’re committed to presenting both sides of a given story here at Above the Law. Sometimes we don’t hear the other side of a story because the sources on that side don’t care to contact us. But when we do have both sides available to us, we present them.
In the case of the People v. Kaye Scholer, we did hear from a character witness on behalf of the defendant. What did this individual have to say?
The tipster, whom we’ll call “KS Defender,” begins:
I am a longtime reader and big fan of your site. I am [an Nth year] associate at Kaye Scholer, and am writing to correct some of the misstatements that some of my fellow KS tipsters apparently made.
First of all, here’s some relevant background. When I arrived [a few years ago], the firm was managed very poorly. The management team that was in place in 2008 and part of 2009 was the team responsible for increasing the minimum billable requirement to 2200 hours (retroactively), and that tragic decision to designate half of the class of 2009 as “pro bono associates” and pay them $60,000 instead of $160,000. Those were terrible decisions and truly worthy of scathing criticism.
Admitting that your beloved firm isn’t perfect is a good way to build credibility. In other words, the opinions of Kool Aid drinkers — you know who you are — will tend to get discounted.
Back to KS Defender:
Towards the end of 2009, however, management was completely revamped, and things changed for the better. So, for 2010 and 2011, the minimum billable hours was lowered dramatically (from 2200 billable NOT including pro bono to 1950, which could include up to 150 hours of pro bono and 50 hours of “firm citizenship” which includes interviewing candidates, etc.). The 1950 combined hours is now VERY reasonable. What’s more, for the first time in KS history, the minimum hours requirements for bonus for 2010 were announced well before the year ended. They also announced the minimum bonus hours for 2011 at the same time (the requirements are the same for 2011).
KS Defender engaged with some of the prior criticism:
I have NO idea what one commenter was saying about paying out half the bonuses promised. And I think there’s no way in hell that I wouldn’t have heard about that if it had happened. I’m not sure whether that person just got on a roll and started making things up, or he/she had some individual issue that no one else has heard of, but I find that complaint bizarre.
Same for women getting fired for getting pregnant. I have never heard of such a thing, and know many women at KS that have “survived” a pregnancy leave.
(Well, in fairness to the Kaye Scholer critics, it’s hard to disprove a negative. Just because you know of some women who came back after maternity leave doesn’t mean that the firm has never, in its entire history, laid off a pregnant woman and/or a mother. We heard many reports of this happening during the Great Recession.)
We did give the original Kaye Scholer critics a rebuttal opportunity. Here’s what one of them had to say. We’ll start with the pregnant women / mothers:
Back in 2009, when it came time to start cutting people, the first thing Kaye Scholer did was fire all associates who were part-time. Almost exclusively, these were women who had recently had kids and who were easing back into their jobs working 4 days a week. Not a single one that I spoke with was given the chance to keep their job if she came back full-time. Maybe that’s not flat-out firing a woman because she’s pregnant, but I would argue that it’s nearly the same thing. At best, it sends the message that women who decide to have children while working at this firm do so at their own risk, and will be the first to go when the economy heads south again. If women have “survived” maternity leave more recently, good for them. They should realize that they got lucky, and managed to time their leave when the economy was starting to do better.
And about not paying out the full amount of promised bonuses:
In Jauary 2010, Kaye Scholer announced two tiers of bonuses. Eligibility was based solely on billable hours, which is the way Kaye Scholer usually awards bonuses. Above the Law reported this announcement here and here. As those posts explain, what was announced publicly was that associates who billed 2200 hours would receive a $20,000 bonus and associates who billed 2400 hours would receive a $40,000 bonus.
This did not happen. I have been told personally by [several] different associates at [multiple] levels of seniority that they did not receive the higher bonus, even though they qualified by billing over 2400 hours the previous year. In each case, one of the partners came to the associate’s office the day after the announcement and told them that they would be getting the $20,000 bonus, in spite of their hours. That’s to say, they would be getting half of what they were promised publicly, and the same amount as associates who billed 200 fewer hours.
This did not have anything to do with poor performance reviews or the like. [These associates] are still with the firm and survived every round of layoffs that took place, when even a single bad review was enough to get you fired. They are well thought of by the partners and their peers. The truth is that the firm never had any intention of paying the higher bonus. When pressed, the partner breaking the bad news mumbled something about “levels” and quickly excused himself. However, no mention of a seniority component for the higher bonus was announced publicly.
Keep two other things in mind. First, almost no one qualified for the $40,000 bonus that year, so to cheat the tiny minority who did qualify out of it is even more cheap than it appears. Second, these are only the associates I know about. Who knows how many others had this happen to them and word just didn’t get back to me? The bottom line is that the firm promised one amount in bonuses that year and then actually paid bonuses that were half that amount.
Just like I said. Low, even for this place.
Wow. Well, this was supposed to be a positive piece, so let’s yield the floor back to KS Defender:
So that leaves one issue — spring bonuses, or lack thereof. And even that, I think, was not accurately portrayed by the commenters. The consistent message from firm management has been that KS is not paying spring bonuses, but will factor in what other firms pay out for spring bonuses when determining what “market” bonus is at the end of the year. I don’t see what people are so up in arms about.
Would I like a bonus now? Of course. But the amount of rage generated by not receiving an extra $10,000 immediately seems disproportionate to the offense, if it can be considered an offense. And who knows? The kinder, gentler, newer management has been pretty straightforward and transparent thus far (though many people seem to have too much accumulated mistrust and cynicism to acknowledge that fact), so I’m not sure why people are so convinced that this is merely an effort to “serve us another plate of s**t” at the end of the year.
This sounds reasonable. We’ve been happy to cover the spring bonus trend, and we’ve occasionally stoked the fires on this front (since it’s great for our traffic). But we must confess that sometimes the anger gets out of control — and we’ve even called out what we view as excessive complaining.
Spring bonuses are certainly nice. But shouldn’t they be viewed in the larger context of a lawyer’s experience at his or her firm? The Kaye Scholer defender certainly thinks so:
The bottom line is that KS is actually a pretty decent place to work on the scale of big law firms. I rarely work late or on the weekends, and the partners, by and large, treat associates humanely. I have plenty of friends at other firms who live in their offices and received a spring bonus, but I’d rather stay here and subsist on my market salary and regular old bonus. And, like I said, we might be made “whole” at the end of the year in any event. So I just don’t understand what all the crying and self-pity is about.
Fair enough. We can understand the anger of associates who feel that they’re being underpaid compared to their counterparts at peer firms — especially when these associates are trying to get their student loans paid off, and the partners at the firm are enjoying record profits. But we can also understand why other associates feel that these small differences in compensation are no big deal, especially when considered in light of the bigger picture.
One could argue that there’s no sense in getting bent out of shape over ten grand here or there. Remember the wise words of The People’s Therapist, which he used as the title of his book (affiliate link): “Life is a brief opportunity for joy.”
If we ever write about your firm in a way that you feel is unfair, you can always come to its defense — by email, to firstname.lastname@example.org, or by text message, to 646-820-8477 (646-820-TIPS). We want to hear all sides. Thanks.
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