McDermott Will & Emery

ATL Salary Freeze Round-up: The Firms on Ice

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pay freeze salary freeze pay cut law firm.jpgThe new year is shaping up to be a cold one. As we noted in our 2008 Year in Review series, one of the biggest stories heading into 2009 has been that of the salary freeze. Rather than instituting lock-step raises for associates entering a new class year, a number of firms have informed associates that their salaries will remain at 2008 levels.

There have been two types of freezes: the “Solid Ice freeze”–with salaries frozen through all of 2009–and the “Slurpee freeze”–where firms are sticking with 2008 levels for now, but promise to revisit the decision later in the year.

Many an ATL reader has requested a round-up, and we aim to please. So find your pleasure, after the jump. Some of the firms have been reported on before, and some are new.

If you know of other frozen firms, send us an e-mail at tips@abovethelaw.com with the subject, “Salary Freeze: FIRM NAME.” Also, if your firm has raised salaries as expected, feel free to send us the news, with the subject “Salary Raise: FIRM NAME.” While freezes are news, raises as expected aren’t, so we will not be covering firm by firm, but we may do a round-up.

Find the list of the sixteen firms that have frozen, after the jump.

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The Next Wave of Cost Cutting: The Pay Freeze

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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.

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Stealth Layoffs at McDermott Will & Emery?

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McDermott logo.JPGOver the past few weeks, there has been a lot of rumbling over at McDermott Will & Emery. One tipster succinctly explained what many MWE associates are seeing:

[T]here is literally no work … nothing at work for a few weeks. Apparently everyone is waiting for the axe to fall.

You should watch MWE like a hawk.

More like a buzzard. We’ve been circling over McDermott for days, waiting for something to fall. So far, we’ve not yet been able to speak with a single MWE associate who will stipulate that they have been laid off. But sources both inside and outside MWE claim that a number of stealth layoffs have taken place at the firm over the past month.

The number many tipsters are coming up with is 20.

Now, that number seems high to us. A major firm like McDermott usually can’t keep 20 people silent for all that long. However, when we approached the firm with our information, they would neither confirm nor deny the reports about firm-wide layoffs. A spokesperson for MWE only had this to say:

As a matter of policy we do not publicly discuss personnel matters.

Additional tipsters weigh in after the jump.

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Associate Bonus Watch: McDermott Will & Emery is Sticking to the Plan … For Now

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McDermott logo.JPGWe’ve gotten the first hard numbers of the 2008 bonus season, in part. McDermott Will & Emery has announced that they will pay their associates the bonus advance they were expecting. A firm-wide email announced the relatively positive news:

December Bonus Advances: As we have previously communicated, the following payments will be made in mid-December to Associates who are on target to receive a bonus: (a) $10,000 for Associates in the class of 2006 or 2007, (b) $15,000 for Associates in the class of 2004 or 2005 and (c) $20,000 for Associates in all other classes. The determination of whether an Associate is on target for a bonus will be made by the ACC using the CPAs and the general evaluation criteria already described in prior presentations and communications by the Compensation Committee. For some Associates, the December payment may be the only bonus the Associate receives. The bonus determined by the ACC to be paid in March, 2009 will be reduced by any advance received in December.

That’s good news to the attorneys that are on target to make their hours. That’s almost everybody, right? Many people have pointed out that bonuses might be depressed this year, not because firms will be offering less money, but because many associates are struggling to make their hours.

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.

Still, $10K – $20K just in time for holiday shopping is a good thing for those on track. And if you’re low on hours, this you at least know for sure that there is at least some money available to you if you can make up the hours in the fourth quarter.

Congrats and good luck, MWE associates.

Read the full memo after the jump.

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OutLaws: A Discussion With Out Lawyers (Part 1)

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pink gavel gay lesbian bisexual transgender lawyer attorney.jpgLast week, we attended OutLaws: A Discussion With Out Lawyers, held at the LGBT Community Center here in New York. The event featured “out lawyers sharing different perspectives and stories — how they got to where they are professionally, as well as what went right, what didn’t, how they’d approach things differently today, and the specific challenges they faced as an LGBT person.”

The panel was moderated by Lisa Linsky, a litigation partner at McDermott Will & Emery. She was joined by Michael Colosi, general counsel for Kenneth Cole; Phylliss Delgreco, associate general counsel and senior vice president at Citigroup; and Roberta Kaplan, a litigation partner at Paul Weiss.

The freewheeling discussion was quite enlightening. You can read about it after the jump.

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Fall Recruiting Open Thread: Vault 41-50 (2009)

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comparing.jpgWe’re back with another installment in our series of open threads on the Vault 100. This is an opportunity for insiders to sound off on their firms for the benefit of wannabe potential first-year and lateral associates.
Here are the next ten on the Vault list, with prestige scores in parentheses:

41. Baker Botts LLP (6.096)
42. King & Spalding LLP (6.066)
43. DLA Piper (6.039)
44. Baker & McKenzie (5.982)
45. Wilson Sonsini Goodrich & Rosati (5.976)
46. Boies, Schiller & Flexner LLP (5.974)
47. Morgan, Lewis & Bockius LLP (5.941)
48. Dewey & LeBoeuf (5.924)
49. Fulbright & Jaworski LLP (5.906)
50. McDermott, Will & Emery (5.892)

The most interesting set of “notable perks” in this bunch can be found at Boies Schiller. On the upside, there is an annual trip to Jamaica for attorneys and their families — in December, no less — but on the downside, it’s a “sweatshop run by a genius.” This makes us think of David Boies as the legal profession’s Santa Claus — who likes to take the elves to Montego Bay.
We invite the curious to ask questions about these firms, and for those in-the-know to take pity.
Earlier: Vault 100 Open Threads – 2009

Featured Survey Results: Would You Do It Again?
(And: Which firms’ associates have no regrets?)

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smiley face greedy face Above the Law blog.jpgLast week’s ATL / Lateral Link survey asked, “If you knew then what you know today, would you still choose to join your current firm?”
We received 540 responses, and, overall 68% of you said yes. But the gruntlement (i.e., satisfaction) varied quite a bit from market to market:
  • Atlanta – 50%
  • Boston – 74%
  • Bay Area – 79%
  • Chicago – 70%
  • Dallas – 80%
  • Houston – 82%
  • Los Angeles – 71%
  • New York – 71%
  • Philadelphia – 75%
  • Washington, DC – 68%
Apparently, “everything is bigger in Texas” includes job satisfaction, and the Bay Area is close behind, followed by Philadelphia. Meanwhile, firms in Boston have managed to produce slightly happier associates than firms in New York, notwithstanding the city’s often lamented bagels and challenging pizza scene — a challenge Chicago offices, hampered by quiche deep dish pizza, have been unable to surmount. Washington, DC lags a bit behind, and Atlanta clearly needs a hug.
Associates at a few firms were particularly likely to say they’d make the same choice today. Find out which firms have especially happy campers, after the jump.

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(And: Which firms’ associates have no regrets?)”

Lawyers of the Day: McDermott Will & Emery
(And they just canceled their associate retreat, too.)

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McDermott Will Emery Above the Law blog.jpgPity the poor partners of McDermott Will & Emery. Sure, their firm is highly regarded and highly profitable. But when they head off to try cases in far-off places, they often get benchslapped silly.
You may recall the case of bankruptcy partner William Smith, who found himself in the deep-fat fryer after telling a judge she was “a few French Fries short of a Happy Meal.” Although the judge was upset, in the end Smith got a slap on the wrist.
Things didn’t end as happily for Terrence McMahon and Vera Elson, MWE partners based in Silicon Valley. Judge Richard P. Matsch — the tough, well-regarded trial judge who presided over the Oklahoma City bombing case — sanctioned McMahon and Elson for “cavalier and abusive” misconduct and a “what can I get away with?” attitude during trial. From the Denver Post:

A federal judge recently got so infuriated by the conduct of two highly regarded trial attorneys that he overturned a jury’s $51 million verdict, then ordered the lawyers to pay the fees and costs of the opposing lawyers, a sum that could total several million dollars.

Ouch. So is that coming out of their partnership draws?
Or maybe the firm will find other ways to cut costs. Read more, after the jump.
Update: Please note that this post has been corrected since it was first published. The correction appears after the jump.

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(And they just canceled their associate retreat, too.)”

Featured Survey Results: Did You Work on MLK?

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Martin Luther King Jr Day MLK Day On Day Off Above the Law blog.jpgIn last month’s ATL / Lateral Link survey we asked you which holidays you worked on, or expected to work on, during 2007. About half of you reported that you had worked on Martin Luther King Jr. Day.

Last week, we asked you how you fared this year. Did you take the day off to honor a champion of civil rights, or did you make it a “day on”?
We received just under 1,300 responses, and 44% of you reported that you took the day off. Associates in New York, Los Angeles and Boston were most likely to celebrate the holiday, while associates in Chicago, Atlanta, the Bay Area, and Texas were most likely to be working. (Respondents in the Bay Area were also most likely to work over Christmas and New Year’s. Is it time for them to get New York bonuses?)
How did it break down on a firm by firm basis? DLA Piper, Milbank, Sidley & Austin, Dechert, Hunton & Williams, Jones Day, Latham, Mayer Brown, McDermott, Hughes Hubbard, McGuire Woods, Morgan Lewis, Nixon Peabody, Paul Hastings, and Sullivan & Cromwell each had multiple happy associates who reported that they had taken the day off. Kirkland & Ellis, Baker Botts, Dewey & LeBoeuf, O’Melveny & Myers, Weil, and Winston & Strawn each had mixed responses. Associates at Skadden, however, uniformly reported that they had worked the holiday, as Martin Luther King Jr. day is a “floating” holiday for the firm.
Of those who spent the day at the office, about 54% reported that they weren’t actually asked to work the holiday, but had things they needed to get done. About a quarter reported that their offices were open. Another quarter said that partners told them to work on the holiday. About 8% were asked to work by clients. A surprising number of respondents wrote in that other associates had told them to work on the holiday.
A little over a third of respondents who worked on the holiday thought that the work did not justify the sacrifice.

Associate Bonus Watch: McDermott Will & Emery to Pay Supplemental Bonuses

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associate bonus watch 2007 law firm Above the Law blog.jpgAs we mentioned last week, McDermott Will & Emery was planning to hold a meeting with associates today about compensation matters. The meeting is over; here’s a brief report:

The MWE associate compensation committee had a videoconference with all associates this morning, where they ate crow about their bonus structure for 2007. They basically said, “we missed the market, we’re sorry, and we’re fixing it.”

They are meeting on January 23rd to set the rate for supplemental bonuses, which will be announced at the end of this month. Apparently the risk of losing all their top billers and having it smeared all over ATL was more than our delicate leadership could handle.

So no numbers yet; expect them near the end of this month. We’ll keep you posted.

Associate Bonus Watch: Monday Round-Up
(Plus a Hint of a Base Salary Increase?)

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associate bonus watch 2007 law firm Above the Law blog.jpgBonus season is still with us, although it’s winding down. Announcements continue to trickle in, but at a reduced pace. Going forward, we will combine bonus info into omnibus posts that will go up periodically, depending on whether we have a critical mass of tips.
Here is today’s compilation of associate bonus news — plus a tantalizing email, from Allen & Overy, that raises the possibility of an associate pay raise.
1. Thacher Proffitt & Wood: TPW has been hit hard by the credit crisis. As we reported back in November, they may be laying off associates this month. But at least they’re still paying out bonuses to the folks who are still around:

TPW paid bonuses year end. No standard memo to all, so information is hard to come by. They paid market bonus ($35,000 for class of 2006) with an hours requirement.

There seem to be four tiers: 2100 hours = full bonus, 2000 hours = half bonus, 1900 hours = somewhere between a third and a fourth ($10,000 for class of 2006 associates), and below 1900 hours = no bonus.

2. McDermott Will & Emery. Here’s a follow-up to our prior post on MWE:

They are having a videoconference on the 15th with all associates to discuss compensation. In the meantime, they allegedly are continuing to monitor market data. It appears as if they will try and fix their initial misread of the market, but no one knows when, how or by how much. In some cities, peer firms’ bonuses [were] 3, 4 or 5 times MWE’s bonuses.

3. Kramer Levin Naftalis & Frankel: We previously wrote about the Kramer Levin bonus announcement. Now comes this caveat:

Sneaky to state that everyone gets the special bonus at 2000 hours, but it’s not market. For example, a fourth-year will either get 80k for 2150 or 38k for 2000-2149.

The Kramer Levin memo appears after the jump.
4. Allen & Overy: This is not bonus news, but over at Allen & Overy — or should that be Allen & Oy-vey-ry? — an email went out before the new year telling associates that the firm probably “will not be able to announce associate/senior counsel salaries for 2008 before the year begins.” One source wonders:

Have any other firms mentioned something like this? Do you think management knows something about a pending raise? Why wait, unless they have information about a possible raise?

Intriguing. We’ll keep you posted.

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(Plus a Hint of a Base Salary Increase?)”

Associate Bonus Watch: Open Thread for Firms That Have Nixed Special Bonuses

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associate bonus watch 2007 law firm Above the Law blog.jpgWe’ve heard complaints from numerous associates claiming that their law firms are using vague bonus policies to lowball them on bonuses. While we understand why these associates are upset, we can’t say we’re surprised. The whole point of a bonus policy that contains an element of discretion is the ability to pay some associates less than others — for whatever reason, justified or not.
This is why we regard only a lockstep, non-hours-based match of the Cravath year-end and special bonuses as a “true match.” If a firm reserves the right to tailor associate bonuses — based on billable hours, quality of performance, or any other factor — expect the firm to exercise it.
So we don’t expect to write much about how firms are using slippery bonus memos to pay low bonuses (although we will bring you the results of yesterday’s bonus survey). The intricacies of an individual law firm’s bonus policy tend to be of interest only to people at that particular firm.
We are, however, interested in bright-line distinctions. For example, what firms have rejected special bonuses entirely? It turns out there are a few of them. Last week we received this info:

DLA Piper litigation associates in New York just left a “Coffee Meeting” with Joe Finnerty III, head of New York litigation. He “unofficially” announced that the bonus structure and amount will be exactly the same as last year and that there will be no market “special bonuses.”

Hmm. Did the firm not get paid enough for the Mitchell Report?
And today we received this info:

I’m an associate at McDermott, Will & Emery in the Boston office. We have all just heard through department heads that not only will the firm not issue special bonuses this year, but bonuses this year will be less than half of years past and well well below market.

For example, a 6th year associate (class of 2001) billing between 2000 and 2100 hours will get approximately $5,000. eedless to say, this is less than a first-year associate gets for simply showing up at any other firm. There is not a large or probably even a midsize firm in Boston whose bonuses are anywhere near this low.

We’re guessing that DLA Piper and McDermott, Will & Emery are not alone in nixing special bonuses. Many of the firms that have remained mum until now probably have no plans of paying special bonuses, a la Cravath.
And to be perfectly (and brutally) honest, does it make sense for firms with profits per partner that are a fraction of Cravath’s to pay bonuses at Cravath levels? Of course associates want bigger bonuses. But they also want jobs.
Nevertheless, we have no doubt that many of you are unhappy about your firm’s bonus policy. Feel free to engage in bonus bitchery in the comments. Thanks.