In this week’s New York Observer, there’s an article (by yours truly) that may be of interest to ATL readers. It’s entitled Profits vs. Partners: Are the country’s top law firms going the way of the dinosaur?
You can check it out by clicking here. The piece has also been picked up by DealBook and the WSJ Law Blog (with a somewhat snarky title — but if we can dish it, we can take it).
The point of the article is not that law firms are becoming more businesslike and profit-oriented (yawn), but what this means for the profession — and also for firms as profit-maximizing businesses. Here’s an excerpt:
It’s a noteworthy shift for the legal profession, whose denizens like to think of themselves as intellectual types—and view their Wall Street cousins as money-obsessed philistines. Many angst-filled attorneys suspect they should have gone into something more tweedy and creative than relocating commas within merger agreements. As Clarence Darrow said, “Inside every lawyer is the wreck of a poet.”
Such questions of professional identity aren’t just theoretical; they have ramifications for law firms as businesses. If law firms become “just like banks,” but with smaller paychecks, firms may lose their appeal to the talent they must attract in order to thrive.
In other words: Is Biglaw, by emphasizing money so much, hoisting itself by its own petard? If it’s all about the benjamins (baby), why not just go to an i-bank or hedge fund? Are firms going to lose their top talent to the world of finance — which would then impair Biglaw’s ability to thrive as a business?
(If Biglaw has nothing to offer but monetary rewards, which are offered in larger amounts by Wall Street, will law firms end up as dumping grounds for the mathematically-impaired? (Please don’t take offense; that includes us. We can’t balance our checkbook without a calculator.))
More excerpts and discussion — including predictions from law firm consultants about when the next round of associate pay raises is coming, which we know you’re dying to hear — after the jump.
Here is the latest unverified gossip making the rounds among summer associates in New York City:
“I’m not summering at Davis Polk, but I have some friends who are, and I’ve been to a few of their events. The general assumption among people there was that the firm is going to $180,000, probably in time for fall recruiting season.”
“My career adviser at Cornell said that it is all but declared that NYC associate starting salaries will be going up to $195K. Is there truth to this? I haven’t heard it anywhere else?”
At this point, since such rumors have been percolating for weeks, we don’t put much stock in them. But maybe we can have a meta-conversation about them: What does the persistence of these (perhaps ridiculous) rumors say about law students and young lawyers?
(Other than that they have huge-ass student loans and/or a taste for the finer things in life. E.g., Cristal.)
Today’s Washington Post has a great article, by Ian Shapira, about the adventures of summer associates here in the nation’s capital. This is our favorite part (emphasis added):
[B]udding lawyers say they spend much of their office time looking for better deals. They peruse such Web sites as Above the Law, a must-read legal blog written by David Lat, a former federal prosecutor in Newark and former co-editor of the Wonkette politics and media blog.
One of Above the Law’s scoops this month was headlined “WilmerHale Summers: Where’s Our Raise?” The blog published an e-mail from an anonymous summer associate in the Boston office who complained that the summers weren’t getting the customary pro-rated weekly equivalent of first-year associates. Instead of about $3,100 a week ($160,000 a year), the tipster wrote, they were getting only $2,800 (about $145,000 a year).
More discussion of this delightful piece, after the jump.
The folks over at litigation powerhouse Susman Godfrey like to toot their own horn. But that’s okay, because they have a lot to boast about. The firm has been tremendously successful, and it pays its people very well (especially in terms of bonuses).
So this news should come as no surprise to anyone. From the Texas Lawyer:
Over the weekend, Houston-based Susman Godfrey joined the growing list of Texas-based firms opting to compensate Texas associates at rates comparable to their New York counterparts.
According to firm spokesman Shawn Raymond, the partners at Susman decided on July 21 to raise associate salaries effective Aug. 1 to $160,000 for first-years, $170,000 for second-years, $175,000 for third-years, $180,000 for fourth-years, and $190,000 for fifth years — after which lawyers at the firm are considered candidates for partnership.
“We want to attract the best and brightest at this firm,” Raymond says when asked about the changes.
That’s one short partnership track — which makes up for the relatively small salary increases after the second year. (And considering that pay levels for Texas associates beyond the second year are still up in the air, it’s not clear that Susman is even below market.) Susman Godfrey Raises Associate Salaries, Effective Aug. 1 [Texas Lawyer]
No, we haven’t heard anything about Fulbright & Jaworski raising associate salaries in Texas. If you hear anything, please email us.
But how about D.C.? That we can help with. From a tipster in Fulbright’s Washington office:
Fulbright has raised. There’s still no memo available, and no one expects one, as the numbers were announced orally at a meeting last Friday. I’m an F&J associate… and was at the meeting.
So no memo. But we do have the firm’s schedule of base salaries and bonuses, payable at different hours levels (up to 2500 hours — yikes).
You can check it all out — it’s a pretty elaborate scale, we’d be interested in hearing your thoughts on it — after the jump.
The rumor is true. Locke Liddell & Sapp has raised salaries for first- and second-year associates. As noted by a commenter, “Now that they have Harriet Miers back, Locke Liddell’s future is blindingly bright.”
The news was reported in the Texas Lawyer. We’ve also gotten a copy of the email, sent out this afternoon by managing partner Jerry Clements (who actually isn’t a 300-pound, cigar-smoking Texan male, replete with handlebar moustache, but a rather attractive woman).
You can check out her email, plus a photo, after the jump.
As for Baker Botts in Texas, still no word, as of the time of this post. If you hear anything, please email us. Thanks. Not to be Outdone, Locke Liddell Hikes Associate Pay [Texas Lawyer]
No, not the Sullivan & Cromwell headquarters at 125 Broad Street. That happened months ago, not long after the young corporate lawyer sued his uber-prestigious employer, claiming anti-gay discrimination and retaliation by S&C.
We’re referring instead to Aaron Charney’s former home, a luxury apartment on the 53rd floor of the Orion — a new, high-rise condominium on the West Side of Manhattan. We previously profiled Aaron Charney’s apartment (above right) back in this post, wherein we wrote:
City records show that in late November, Charney closed on an $820,000 condominium in the fancy new Orion building, on the west side of Manhattan….
Charney financed this purchase with a $656,000 mortgage — 80 percent financing. Perfectly respectable; not overly leveraged. This means he put down about $164,000 for the purchase.
(Food for thought: Did S&C help him out with his down payment?)
Well, now Aaron Charney has gotten back all that money — and then some. NYC records disclose that he sold his apartment last month for $972,500 (and paid off his mortgage).
So Charney flipped a property he owned briefly, just over six months, for $152,500 more than he paid for it. If you’ve been wondering how Aaron Charney is supporting himself these days, there’s your answer (or at least part of it).
Nice work, Aaron! Even after closing costs — we doubt he paid the full 6 percent commission (who does thesedays) — he probably made a tidy profit. If Aaron Charney decides not to return to law, maybe he has a promising career in real estate. Update / Correction: As discussed in the comments, “[h]e’ll have to pay both the NY ‘flip tax’ and federal capital gains tax because he held it for such a short period.” So maybe he’s not making as much of a killing as we originally thought. Further Update: Detailed tax analysis here.
More details about Aaron’s pad, including text and images from the real estate listing, after the jump.
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: