Being on the LIST OF SHAME gets more shameful by the day, as one law firm after another drops off of it.
The latest to leave: Bryan Cave. From a source at the firm:
The professional development people had a meeting with the associates this morning. New York associates will be getting the $15k raise [to $160K] across the board. DC and LA first years are going to $145K. Details to come in a memo to be distributed later today.
The LIST OF SHAME is shrinking, albeit slowly.
We were down to eight firms as of last Friday morning. Then we learned about Baker Hostetler matching market. And today we get this associate pay raise news (from a verified source at the firm):
You can remove Fulbright & Jaworski from the List of Shame. We raised associate base salaries in the New York office to market today (retroactive to January 1, 2007). There was a meeting of all the associates so there is no memo or voicemail.
This leaves us with the following (ranked by Vault 100 numbers on the left, ’cause that’s how the list started out, but with AmLaw 100 numbers supplied parenthetically on the right):
43. Baker & McKenzie (3)
77. Bryan Cave (56)
82. Reed Smith (33)
83. Dorsey & Whitney (68)
86. McGuireWoods (65)
100. Seyfarth Shaw (66)
If any of these firms doesn’t belong, please email us, with supporting documentation (if any). Thanks.
Over at Kenyon & Kenyon, the prominent intellectual property law firm, it’s the best of times — and the worst of times.
It’s the best of times for incoming associates, who will be earning the new market rate of $160,000. It’s the worst of times for the ex-Kenyon associates who are now looking for jobs.
Our take is that Kenyon is trying to keep up with the Simpson Thachers (or Fish & Richardsons) of the world, but getting winded by the effort. Yes, it’s raising salaries; but it’s not doing so until much later in the year. And it’s shedding associates at the same time, maybe to free up the payroll for raises.
Here are the details:
1. The firm is raising salaries for entering associates, but it’s not doing so until September 1. Here’s the email:
From: Birde, Patrick Sent: Wed 2/28/2007 3:48 PM To: ~Attorneys (All) Subject: NOTICE: Re: $160k Entry Salary
This is to advise you that our first year associate salary will be raised to $ 160K effective Sept. 1, 2007. Also, the Firm is in the process of revising the pay structure including the bonus system for all Associates and Counsel.
2. The firm has laid off associates. On January 11, the firm laid off 16 lawyers, according to partner Patrick Birde (who kindly responded to a fact-checking email we sent to him).
3. There was a rumor going around that the layoffs were made without warning. But according to Birde, this is incorrect:
[S]ome of the attorneys involved were already on probation and others were aware of issues with the firm brought to light during the review process.
4. The firm informed these 16 individuals that their names would remain on the firm website until March 15. (We’re guessing this was done to facilitate their job searches.)
So that’s the 411 on Kenyon. Feel free to discuss this news — or other associate compensation developments, since our last open thread was a while ago — in the comments.
This morning brings some big news in the world of bankruptcy law. From the WSJ Law Blog:
You can go home again, especially if you’re Harvey Miller (at right). The legendary bankruptcy lawyer is expected to rejoin to Weil Gotshal, whose partners are scheduled to vote on his return tomorrow.
“I would be delighted to have Harvey back, but it’s premature at this stage to comment on his rejoining the firm until the partnership votes on the issue,” says Stephen Dannhauser, firm chair.
Before decamping to investment bank Greenhill & Co. in 2002, Miller had spent the previous 33 years at Weil, building its bankruptcy department into one of the most prominent debtor-side practices in the country.
And from a little bird (so consider this to be nothing more than rumor at this point):
It appears four bankruptcy partners are leaving Weil and moving to Cadwalader (apparently to swim in Bob Link’s shark tank and make the big $$$). Partners include Deryck Palmer, John Rapisardi, and George A. Davis.
Could the return of Harvey Miller to Weil be related to the (rumored) departures of these younger partners?
We are following up on this rumor and will let you know what we find out.
UPDATE: Harvey Miller’s return to Weil is official. The WGM press release is available here. A longer version of the release, which was circulated by email at Weil, appears after the jump.
In case you haven’t seen it already, we’d like to call your attention to an update and correction to our last post about Mayer Brown Rowe & Maw’s decision — announced on Friday afternoon — to “de-equitize” 45 equity partners:
The premise of this post — that Mayer Brown intentionally tried to “get out in front of” this story — is incorrect. Our facts were correct, but our interpretation of them was erroneous.
It is factually accurate to state that the Chicago Tribune story [about the partner terminations and demotions] hit the web before Mayer Brown sent out the announcement email to its associates. It is also true that Mayer Brown representatives spoke with the Chicago Tribune about this news before the firm-wide email went out.
But there’s a backstory here that needs to be explained. We’ll have more to add in a subsequent post.
We now deliver the promised backstory. Check it out after the jump.
Wow. Late Friday afternoon, we briefly discussed an article by D.C. bar president James J. Sandman, a partner at Arnold & Porter in Washington, bemoaning the recent associate pay raises. The article generated a strong reaction, judging from the avalanche of reader comments (75 and counting; mostly insightful, and mostly disagreeing with Sandman).
We emailed James Sandman, offering him space in ATL to offer a further defense of his article. We haven’t heard back from him yet; but if we do, we’ll let you know.
In the meantime, here’s an American Lawyer article that raises similar concerns. It’s a news rather than opinion piece, but the partners quoted in it voice sentiments similar to Sandman’s. Some excerpts:
A partner at Greenberg Traurig was meeting with attorneys from five law firms when he learned that Simpson Thacher & Bartlett had raised associate salaries across the board.
“Every BlackBerry in the room started flashing,” he recalls.
It was 4:30 p.m. on Jan. 22. At least five firms matched the next day, and by the end of the week, the sticker price for a new associate in the New York market was up for the second time in a little more than a year — to $160,000.
The raise surprised competitors and legal consultants alike and caused many to question whether another pay increase makes sense. They point out that pay isn’t associates’ main gripe (uncertain partnership prospects and grueling hours top this list). Robert Link Jr., managing partner of Cadwalader, Wickersham & Taft, goes even further. If improving associate morale was Simpson’s goal, says Link, the raise may do more harm than good.
A higher salary “puts more pressure on productivity and hours,” says Link, exacerbating precisely the quality-of-life issues that make junior lawyers unhappy.
“I don’t know what Simpson was thinking,” he adds.
It’s similar to Sandman’s comment:
“I don’t understand what causes a firm be the first to increase the salary of a brand-new lawyer from an already eye-popping $145,000 to $160,000. There is no competitive advantage in doing so. Other firms will surely follow suit, and the firm that led the market will quickly be indistinguishable from the rest of the pack.”
So, what WAS Simpson thinking? Discussion continues after the jump.
[F]irst-year associate salaries at big firms have gotten to a level where increases are very bad. They are bad for the law firms that pay them, for the associates who receive them, for the clients who foot the bill for them, and for the society we serve.
Sandman takes a swipe at the firm that initiated the latest round of pay raises (Simpson Thacher, cough cough):
I don’t understand what causes a firm be the first to increase the salary of a brand-new lawyer from an already eye-popping $145,000 to $160,000. There is no competitive advantage in doing so. Other firms will surely follow suit, and the firm that led the market will quickly be indistinguishable from the rest of the pack.
To read Sandman’s interesting and provocative argument against the recent raises, click here.
3. Finally, here’s the latest departure from the LIST OF SHAME: Baker & Hostetler.
From a source at the firm:
Baker Hostetler announced raises yesterday effective March 1 (for its New York office only). First-year associates will be making $160K; the managing partner didn’t say how much other classes would be making, but that associates would get letters about next week telling them what their new salary would be.
That leaves, as far as we know, just seven firms on the LIST OF SHAME.
UPDATE / CORRECTION: The premise of this post — that Mayer Brown intentionally tried to “get out in front of” this story — is incorrect. Our facts were correct, but our interpretation of them was erroneous.
It is factually accurate to state that the Chicago Tribune story hit the web before Mayer Brown sent out the announcement email to its associates. It is also true that Mayer Brown representatives spoke with the Chicago Tribune about this news before the firm-wide email went out.
But there’s a backstory here that needs to be explained. We’ll have more to add in a subsequent post. FURTHER UPDATE: The subsequent post describing what actually happened appears here.
One of the rules of so-called “crisis management” is to “get out in front of” bad news. The reasoning is that if you try to cover up bad news, you’ll just make matters worse. So you should just announce the bad news, take your lumps, and try to move on as quickly as possible.
Mayer Brown tried to get out in front of the news that it was axing 45 equity partners, which it announced earlier this afternoon — a Friday afternoon, which is when such things get announced. It apparently told the Chicago Tribune about the news before making a firm-wide announcement to its associates.
This may have taken “getting out in front of bad news” too far. It can be demoralizing for your employees to hear about something that affects them after (or even through?) the news media.
But this was clearly an announcement that was made with the media in mind. The internal memo that was sent around at Mayer Brown even included contact information for the firm’s communications team.
If Mayer Brown was going to be so forthright about this news, and basically throw open its kimono, why didn’t it just “go all the way” — and post a news story or press release on its website?
The Chicago Tribune broke the story earlier today — and apparently was advised of the news even before it was announced to Mayer Brown associates. As one of them bitterly quipped, “Nice of them to tell the Tribune before they told us.”
Anyway, here’s the memo:
March 2, 2007
TO: All Associates and Counsel FROM: Policy & Planning Committee
Mayer, Brown, Rowe & Maw LLP is a leading global law firm, with nearly 1,500 highly talented and respected lawyers, distinctively strong practices and a passion for providing clients with the highest quality legal counsel. It is also an extremely successful business. Our 2006 operating performance shows that the firm is not only healthy, but growing strongly, with top-line revenue of $1.1 billion, an increase of 11 percent over 2005 and 19 percent over 2004. Total profits for 2006 also reached an all-time high for the firm. American Lawyer will report that the firm’s profits per equity partner for 2006 will exceed $1 million.
In today’s competitive legal market, Mayer, Brown, Rowe & Maw cannot rest on its achievements, but must continually work to make sure it is in the best position to achieve its strategic objectives and that it is properly staffed to serve its clients’ needs most efficiently.
Okay, that’s the preliminary, PR-ish-type stuff. The real dirt appears after the jump.
You know how losing the last five pounds is always the hardest? The same could be said for the last few firms on the LIST OF SHAME. Don’t count on these firms melting away anytime soon.
We still haven’t seen a Mintz Levin memo. But we’re taking them off the list, since (1) numerous commenters have insisted they’ve matched the market raises, and (2) nobody has disputed this.
So here’s the latest, official LIST OF SHAME (ranked by Vault 100 placement; AmLaw 100 placement indicated parenthetically):
43. Baker & McKenzie (3)
50. Fulbright & Jaworski (36)
77. Bryan Cave (56)
82. Reed Smith (33)
83. Dorsey & Whitney (68)
86. McGuireWoods (65)
90. Baker & Hostetler (73)
100. Seyfarth Shaw (66)
Fridays are big days for announcements. Perhaps some news will break later today?
If you see any errors in this list, please email us (with supporting documentation, if any). Thanks.
Ed. note: The Asia Chronicles column is authored by Kinney Recruiting. Kinney has made more placements of U.S. associates, counsels and partners in Asia than any other recruiting firm in each of the past six years. You can reach them by email: firstname.lastname@example.org.
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