Readers of ATL are obsessed with lawyer compensation. But so is the mainstream media, it would appear — even in places outside New York, Washington, and Los Angeles.
From a piece by John-Laurent Tronche in the Fort Worth Business Press:
While local law firms are staying competitive, it doesn’t always pay to follow the nationwide trend to raise salaries for first-year associate lawyers.
A Texas pay raise explosion was sparked in mid-July when Houston-based Vinson & Elkins raised its first-year associate pay from $135,000 to $160,000, part of a nationwide move to match New York salaries. The firm’s pay hike prompted fellow Houston firm Andrews Kurth to raise salaries the next day, followed by a host of other big Texas law firms, including Dallas firms Haynes Boone and Thompson & Knight….
The move to match New York salaries is a matter of reputation, said David Lat, editor in chief of abovethelaw.com, a Web site that has been tracking the nationwide pay raise. But that reputation to “play ball with the big boys,” he said, isn’t always economically sound.
You can read the rest here. And a few days ago, the Des Moines Register “rewrote the WSJ story about lawyer salaries,” as one of you put it. (Well, Amir Efrati, remember what Coco Chanel once said: “Imitation is the sincerest form of flattery.”)
The Register article begins:
Jason Fernandez never expected to be delivering flowers six months after he graduated from law school. But there he was – a graduate of the top-tier University of Iowa College of Law – navigating Washington, D.C., streets to deliver bouquets at $8 a pop.
As we previously wrote, there appears to be no truth to rumors of possible layoffs at Latham & Watkins. But even mentioning the words “layoff” and “Latham” in the same post got some people upset. We’d like to share some of the responses we received:
[T]he idea of layoffs [at Latham is] ridiculous. NYC M&A is still busy as hell, and on the whole the pace numbers, despite the traditional August lulls (read: not just credit market, it’s AUGUST) are very solid. They’re still bringing in laterals and still printing money.
And here’s a correction to the suggestion of possible slowness at the firm:
[O]ne of the comments you posted had incorrect data. The New York office was only at 90 percent pace for September, as some of your commenters noted. But for the year to date, even after a very slow August and September, New York’s pace is well over 100 percent. In fact, the office is about where it was last year, so things are nowhere near as bad as the doomsayers would have you think.
Plus, in the last week, things have began picking up substantially. In a few months, maybe we’ll be back to “NY to 190!”
Finally, we got our hands on firm-wide memo from Chairman and Managing Partner Robert Dell, discussing “firm culture.” It’s not very exciting, and it’s probably best read as a welcome to new associates, as opposed to some veiled discussion of layoffs.
If you’re curious, you can check it out after the jump.
Did you see the internal memo at K&L Gates announcing that the firm will cease contributions to attorney 401k plans? I found it interesting because it mentioned that similar reductions are occurring at other “major firms.” Which strikes me as stunning if true.
Of course, as noted in the comments to our earlier open thread on retirement benefits, many top law firms don’t contribute to attorney 401(k) plans in the first place. But if you know which “major firms” are being referred to in the memo, please share what you know, in the comments.
We received this information from a reliable source, but we haven’t seen the K&L Gates memo itself. If you have a copy to pass along, please email us. Thanks. Earlier: Biglaw Perk Watch: Retirement Benefits and Financial Planning
Some sources at Kirkland & Ellis have been upset by our recentcoverage of layoff rumors. These rumors were focused on K&E’s office in Chicago, but New York was also implicated.
As we’ve repeatedly noted, these rumors are just that — rumors. We were reporting more on the existence of the rumors, as opposed to offering them for their truth value.
But let’s say the rumors are true, and K&E has adopted more rigorous associate review standards this year, in light of growing economic uncertainty. Would that be such a bad thing? Consider this
Kirkland & Ellis is one of the nation’s preeminent and most profitable law firms. So it appears they have a sound strategic business sense and are watching the bottom line. What is wrong with that? Don’t a lot of us aspire to work for a preeminent, highly profitable firm?
A law firm feels economic cycles. I’d much prefer to work for a firm that aggressively manages staffing levels as opposed to letting underproductive people [stay on indefinitely].
Recall that K&E’s bonuses have historically been well above market. If K&E is trimming some fat, so it can once again pay generous bonuses to the associates who DO meet its standards, what’s wrong with that?
Remember, too, that K&E, unlike most other Biglaw shops, doesn’t pay lockstep bonuses. Bonuses at Kirkland are highly individualized. In this sense, could K&E be the law firm of the future? Evaluate associates according to their individual merits, richly reward the superstars, and dump the underperformers? Might this be a better business model than the traditional “treat unequal associates equally” model of Biglaw?
Nevertheless, some Kirkland lawyers resist even this favorable characterization of the firm. They claim that K&E’s associate review process was conducted exactly as it has been in past years — that it was simply “business as usual,” and the same standards were applied this year as in prior years.
It’s only fair to give equal time to their views. Check out their rebuttals, after the jump.
* Holy Lawsuit, Batman! Professors sue Ave Maria. [AveWatch.org]
* TMI indeed; spare us talk of that burning sensation. Just say you have a doctor’s appointment, and leave it at that. [Nasty, Brutish & Short] * Just because you’re a 46-year-old man who has never been married doesn’t mean you’re gay. Plamegate prosecutor Patrick Fitzgerald — whom we met earlier this month, btw — is engaged. Congrats, Pat! [WSJ Law Blog]
* Milberg Weiss and the Democrats: politics makes for not-so-strange bedfellows. [Overlawyered; Overlawyered]
* Some undergraduates earn cash by selling their class notes online. How long before this trend takes hold in law schools? [Conglomerate]
* Who says Yale Law grads can’t be funny? [Wonkette]
Our colleagues over at DealBreaker have been extensively covering one heck of a lawsuit. It’s our Lawsuit of the Day, but it really ought to be our Lawsuit of the Week — it’s that good.
The defendant is wealthy New York financier Jeffrey Epstein, who already stands accused, in Florida state court, of sex crimes involving underage girls. This latest case is a civil action filed in New York. Here’s a teaser:
[W]e’re knee-deep into the latest sex suit against Jeffrey Epstein, brought by a girl who, at the time, was whatever the opposite of over eighteen is. This one’s from Maximilia Cordero [at right], an aspiring model, who claims that in 2000, Epstein lured her to his Upper East Side apartment on the promise that “he and his wealthy friends would help…with her modeling career.”….
Epstein, in order to quell the girl’s fears as to what people would think of her blowing a man old enough to be her father, swore that he “wouldn’t tell anyone.” Bet he’s wishing he’d gotten her to do the same! Ah, well, hindsight.
Then he came in her mouth and requested that she return with her “14, 15, and 16 year old girlfriends next time.”
More — ’cause you know you want it — after the jump.
What’s the hot new trend in Biglaw? Two-track systems for associates. They’re regarded as a sensible way for law firms to address the twin challenges of (1) higher associate salaries and (2) associate attrition (often due to a frustration with long hours).
Here’s word of the latest law firm to join the party, from NYLawyer.com (reg. req’d):
Chapman and Cutler, a Chicago-based firm with three offices and about 220 attorneys, has joined the parade of firms boosting first-year associate pay to $160,000, but the firm is taking a new path once associates reach their second year.
Second-year associates can opt for one of two compensation tracks at the firm under a new system that took effect last month, said Rick Cosgrove, who is chief executive partner at the firm. They can choose to work fewer hours at a lower pay level or more hours at a higher salary level, he said.
Cosgrove declined to specify the hours required and related pay rates under the new pay program for competitive reasons.
If you have info on the Chapman and Cutler scale that you’d be willing to share, please email us. According to a poster at Greedy Chicago:
The higher track is essentially Biglaw market, so long as you hit 2000 billables/year. The lower track is compressed to about $5k-$10k/year, depending on class year, and you need to hit 1850.
Other firms with two-track systems (click on each firm’s name for a memo and/or details): Hogan & Hartson, Wiley Rein, Fenwick & West, and Thelen (formerly Thelen Reid, and FYI, “Thelen” rhymes with “wheelin'”; see here).
Do you have an opinion about this two-tiered approach? If so, vote in our reader polls, after the jump.
In the latest issue of the Legal Times, Nathan Carlile has a somewhat salacious story about Beveridge & Diamond. Perhaps you haven’t heard of this D.C.-based environmental law boutique — which might be mistaken for a livestock brokerage, thanks to the sheep photos on their website. But a livestock brokerage probably has fewer hijinks:
[A] sordid story… has ensnared partners at 95-lawyer Beveridge & Diamond in allegations that include adultery and forgery. The dispute stems from a bitter divorce battle between firm partner John Guttmann and his wife, Nancy Lasater, a nonpracticing attorney who was previously co-chairwoman of the Law Practice Management Section of the D.C. Bar and a solo practitioner who often represented firms on ethics issues.
At the last meeting of the Associates Committee in New York, the committee representatives noted that we had fallen behind some other firms who had adjusted clerkship bonuses in 2007. As we mentioned at the meeting, we assumed that the firm would promptly respond with a clerkship policy consistent with the market.
Accordingly, I am pleased to report that because the firm places great value on the experience a clerkship provides, it has raised bonuses to $50,000, paid to associates who join the firm after August 1, 2007 and who complete a one-year eligible clerkship. For two one-year clerkships or two-years of clerkship experience, the firm will pay $70,000. An additional bonus is paid to U.S. Supreme Court clerks.
This is the first clerkship bonus news in a while (since Dechert). Have we missed any developments? If you know of clerkship bonus news that we haven’t previously covered — use the site search function or the archives to check — please email us. Thanks. Earlier: Clerkship Bonus Watch: What’s Up With Shearman?
Several offices of Seyfarth Shaw met yesterday and today to discuss the results of the Am-Law Mid-Level Associate Survey, as well as those from an internal survey distributed. [T]he data revealed in these surveys reflected a considerable level of dissatisfaction from associates regarding a variety of areas, and [discussion was held] to cover some of the things the firm is doing to address them (as discussed at the Partners retreat in late September).
When this non-descript “Associates Meeting” was announced last week, most of the associates believed it was to discuss that fact that Seyfarth was finally going to get off ATL’s List of Shame and raise to 160k. However, to our surprise, the whole issue of salaries was completely glanced over. It was merely conveyed that the Compensation Committee was still compiling data regarding recent “market trends in compensation” and would be “meeting” (not necessarily deciding anything) in December.
Seyfarth really continues to amaze….
Okay, so you’re getting below-market pay (except in New York, where associates start at $160K). But look on the bright side — at least your firm makes awesome videos! From an earlier message:
I am not sure how you can get your hands on this, but Seyfarth Shaw did a professional-quality “MTV-Cribs” spoof for the opening of its new Chicago office last fall where Steve Poor (managing partner) walked around in a Hugh Heffner-style smoking jacket showing off the firms new office space. It was clearly a joke (unlike the Nixon Peabody fiasco) and the firm showed it to the new first year associates during first year orientation. However, I would pay money to see that video again….it was hilarious!
If any of you has a copy of said video, or knows how one might be obtained, you know where to reach us.
Jiminy jillickers! ATL editors are going all over the place over the next month or so. Or at least all over the Eastern Seaboard. If we aren’t heading to your neck of the woods on these trips, never fear, we may hit you up on the next time around. We’ve already hit up Houston, Chicago, Seattle, San Francisco, and Los Angeles in the past year.
Kinney Recruiting’sEvan Jowers is currently in Hong Kong for client meetings and still has a few slots available through October 22. Evan will also be in Hong Kong November 14 to December 15. Further, Robert Kinney has been in Frankfurt and Munich this week and is available for meetings with our Germany based readers.
One of our key law firm clients has referred us to one of their important clients in the US, Europe and China – a leading global technology supplier for the auto industry – in order to handle their search for a new Asia General Counsel and Asia Chief Compliance Officer.
Kinney is exclusively handling this in-house search.
This position will have a lot of responsibility and include supervision of eight attorneys underneath them in the Asia in-house team. The new hire will report directly to the global general counsel and global chief compliance officer, who is based in the US. The new hire’s ability to make judgement calls is going to be as important as their technical skill set background.
The position is based in Shanghai and will deal with the company’s operations all over Asia and also in India, including frequent acquisitions in the region.
It is expected that the new hire will come from a top US firm’s Shanghai, Beijing or Hong Kong offices, currently in a top flight corporate practice at the senior associate, counsel or partner level. Of course, the candidate can be currently in a relevant in-house role.
The JOBS Act created new tools for companies to publicly advertise securities deals online. As a result, thousands of new deals have hit the market and hundreds of millions in capital has been raised, spurring a wealth of new business development opportunities for attorneys.
Fund deals, startup capital raises, PIPE deals and loan syndicates are just a handful of the transactions benefiting from the JOBS Act. InvestorID FirmTM is a platform designed to help attorneys equip their clients with the workflow, marketing and compliance tools to publicly solicit a securities offering online. By providing clients with the tools to painlessly navigate the regulatory landscape of general solicitation, InvestorID FirmTM helps attorneys add value above just legal services.
The Jumpstart Our Business Startups Act (JOBS Act) went into effect in 2013 and permits Regulation D offerings of securities to be advertised publicly. This means that funds and companies can now use social media, emails and web sites to market transactions to new “accredited” investors.
However, with these new powers come new pain points. InvestorID FirmTM provides a secure, fully hosted, cloud-based platform with a breadth of tools for your clients, including: