We’re back. It’s Monday. We don’t like Mondays. We’re feeling sluggish today.
So we’ll take the path of least resistance, and start a thread about an ATL staple: clerkship bonuses. We have some good news about two new (and non-New York) firms.
First, the rumor about O’Melveny & Myers can be treated as confirmed. We received lots of emails about OMM. Here are two:
“O’Melveny and Myers has raised their federal clerkship bonus to 50k. District Court and Appellate. Not sure about second year bonus of 70k.”
“O’Melveny and Myers just raised their clerkship bonus from 35k to 50k. As far as I know, they’re the first non-NY based firm (aside from Susman) to go to 50k. And it’s straight 50k — it doesn’t include a bar stipend like that Latham nonsense.”
Second — from just one source, so let us know if it’s erroneous — we hear that Morrison & Foerster has joined the $50K Club:
“Noticed the clerkship bonus list of shame (7/02/07). A co-clerk of mine is joining MoFo this fall and the clerkship bonus is listed as 50K (nationwide) in the documents he has received.”
If you have clerkship bonus information not previously reported on ATL, please email us (subject line: “Clerkship Bonus”). Thanks.
As we reported on Friday, Morrison & Foerster recently announced a firm-wide increase in associate base salaries. But the MoFo raise came with a catch: a modification to the firm’s bonus structure (for associates outside New York).
Here’s the relevant language from the MoFo memo, which we recently got our grubby little hands on:
This increase in base compensation [for non-NYC offices] will, however, replace the contribution bonus that was otherwise payable for those who finished the year in good standing with 1950 billable/pro bono/firm legal service hours. For any associate otherwise eligible for that contribution bonus who ends the year making less than he or she would have under the former base compensation plus contribution bonus model, the firm will make up the shortfall in January of 2008. Additional details about the elimination of the 2007 contribution bonus will be posted on the Professional Development portal next week.
One source who sent this to us stated:
If you could use this memo to get your hands on other memos, particularly regarding what’s happening with bonuses, that would be quite helpful. I’m especially curious about Orrick’s alleged bonus structure, as reported in the comments section of your post, “West Coast Pay Raise Watch: MoFo sees Orrick’s San Francisco and Raises it a Sacramento.” Thanks.
So if you have a memo (or memos) explaining bonus structures at places like Orrick and O’Melveny, which recently raised associate salaries, please send ‘em our way. It would be helpful to compare how they stack up with Morrison & Foerster.
For those of you who are curious, the complete MoFo memo appears after the jump.
As noted by several commenters, and as this article in Monday’s Recorder will report, Morrison & Foerster has announced a firm-wide increase in associate base salaries. This follows on the heels of pay raise news from two other California-based (or California-originating) firms, Orrick, Herrington & Sutcliffe and O’Melveny & Myers.
Here’s the new MoFo pay scale:
As reflected in the base salary table above, all of MoFo’s offices are now on what might be called a “New York” or “$160K” pay scale. The same is true of O’Melveny, but not of Orrick (which raised starting salaries in its Sacramento and Pacific Northwest offices, but not all the way to $160,000 — just to $145,000).
With respect to the MoFo news, there’s a catch (which the Recorder fails to mention). As noted by this comment:
MOFO eliminated the “contribution bonus” payable upon hitting 1950 [hours]. More or less took the 1950 bonus, which almost everyone earns, plus a few grand more and spread that over a 12 month period. NY lawyers still get bonuses like all other NY attorneys.
MoFo announced that it’s matching OMM and Orrick, but then anounced that it’s rescinding its previously-announced hours-based bonus that kicks in at 1950 hours. The salary increase, pro-rated over 8 months, is essentially of equal value as the now-rescinded bonus. In other words, the only real difference for people meeting their minimum hours requirement is that they get that portion of their bonus up-front. Is OMM or Orrick also playing the “give with one hand while taking with the other” move to “increase” salaries?
The interesting comment thread to our recent post about the Seyfarth Shaw memo — aka “We’re on the List of Shame, and We’re Telling You We’re Not Going” — reminded us of something we meant to link to earlier.
It’s an article, from this month’s ABA Journal, reporting the results of a survey of young lawyers. The survey focused on the trade-off between compensation and billable hours — in other words, money versus lifestyle. Here’s a summary of the results:
[I]f associates were given an opportunity to work—and earn—a little bit less, would they?
Yes, say an overwhelming number of young lawyers who participated in an unscientific online survey conducted by the ABA Journal in November. Respondents identified themselves as associates.
Of the 2,377 respondents who answered all or part of the survey, 84.2 percent indicated they would be willing to earn less money in exchange for lower billable-hour requirements.
A sizable minority of associates are looking for a big workload cut—31.9 percent of respondents favored a 20 percent reduction in billable hours. That was followed by a 10 percent cut in hours (chosen by 27.8 percent of respondents), a 15 percent cut (14.3 percent), a 25 percent reduction (13.5 percent) and a 5 percent cut (4.3 percent).
Heck, who wouldn’t want to work less? But the survey respondents were willing to put their money where their mouths are:
A majority of respondents—no matter how much less they wanted to work—were willing to accept a pay cut equal to the percentage reduction in their workload. (Though 15.1 percent of those looking for a 20 percent cut in billable hours would be willing to sacrifice 25 percent or 30 percent of their pay for less time at work.)
Could we see a significant rise in either true lifestyle firms, or lifestyle tracks at Biglaw firms — where associates work (and earn) less than the average Biglaw lawyer? It’s doubtful:
[P]artners and consultants say no to the idea, for the most part.
“I don’t think this would work if you want to have a very successful firm,” says Carl A. Leonard, former chairman of Morrison & Foerster. “The world has always been competitive, and it just gets more so.”
These sentiments are echoed by Paul Irving, chairman of Manatt Phelps & Phillips:
[L]owering billable-hour requirements for all his associates, [Irving] says, would not work. The firm has a starting annual salary of $145,000 and a billable-hours requirement of 2,000 hours a year.
“Our experience is that, for the most part, the people we recruit are looking for top compensation and a highly engaging work experience.”
California may be the Golden State — but not when it comes to the handcuffs placed on Biglaw associates.
On the West Coast, the handcuffs are silver rather than golden. We previously posted the compensation memo for Morrison & Foerster’s New York office. Now, for comparison purposes, here’s the memo for the firm’s associates beyond the Big Apple:
—–Original Message—–
From: Wetmore, Keith C.
Sent: Thursday, January 25, 2007 3:05 PM
To: LIST/Non-Partner Atty/SF; LIST/Non-Partner Atty/PA; LIST/Non-Partner Atty/SA; LIST/Non-Partner Atty/WC; LIST/Non-Partner Atty/LA; LIST/Non-Partner Atty/OC; LIST/Non-Partner Atty/SD; LIST/Non-Partner Atty/DN; LIST/Non-Partner Atty/DC; LIST/Non-Partner Atty/VA
Cc: LIST/Partner/SF; LIST/Partner/PA; LIST/Partner/SA; LIST/Partner/WC; LIST/Partner/LA; LIST/Partner/OC; LIST/Partner/SD; LIST/Partner/DN; LIST/Partner/DC; LIST/Partner/VA; List/Patent/Agt/All; Office Managing Partners-US; Directors of Administration-US; Herman, Janet Stone (PA); Moser, Cheryl L.; Nashelsky, Larren M.; Reed, Pamela J.; White, Anna Erickson
Subject: 2007 Associate Compensation Announcement
I am pleased to announce our 2007 compensation for associates located in our DC, Denver, Los Angeles, Northern Virginia, Orange County, Palo Alto, Sacramento, San Diego, San Francisco and Walnut Creek offices. Base compensation increases will be implemented for each class as noted below:
Class of 2006 – $145,000
Class of 2005 – $155,000
Class of 2004 – $170,000
Class of 2003 – $190,000
Class of 2002 – $210,000
Class of 2001 – $230,000
Class of 2000 – $245,000
These adjustments to base compensation will be reflected in your February 15 paycheck retroactive to January 1, 2007. If you are not in one of the class years noted above, or you are Of Counsel or a Patent Agent, we will be following up with you separately in the next few weeks. The 2007 bonus schedule will be finalized and distributed in the near future.
On behalf of the Firm, thank you for your part in making 2006 a great year for the Firm and for your hard work and commitment to the Firm and its clients as we look to the future.
Keith
Keith C. Wetmore | Chair
Morrison & Foerster LLP Earlier: Skaddenfreude: Morrison & Foerster (New York only)
We have confirmed this Morrison & Foerster memo with sources at the firm. So you can take it as 100 percent reliable.
Please note that it pertains only to the New York office. MoFo has historically paid its NYC associates more than their counterparts in other cities, which some non-Gothamites have grumbled about. But that’s probably not about to change — especially when New York newbies pull down $160K…
From: Wetmore, Keith C.
Sent: Wednesday, January 24, 2007 5:21 PM
To: LIST/Non-Partner Atty/NY
Cc: LIST/Partner/NY
Subject: 2007 New York Associate Compensation
I am pleased to announce the 2007 compensation structure for associates in our New York office. Associates eligible to receive an increase to their base compensation as a result of progressing to the next salary class will see the increase reflected in their February 15 paycheck retroactive to January 1, 2007. These step increases will be based on the following schedule:
Class of 2006 – $160,000
Class of 2005 – $170,000
Class of 2004 – $185,000
Class of 2003 – $210,000
Class of 2002 – $230,000
Class of 2001 – $250,000
Class of 2000 – $265,000
Class of 1999 – $280,000
Class of 1998 – $290,000
We will be determining compensation for of counsel on a separate basis and will send individual compensation messages in the next few weeks.
On behalf of the Firm, thank you for your part in making 2006 a great year for the Firm and for your hard work and commitment to the Firm and its clients as we look to the future.
Keith
Nothing huge today, like yesterday’s news about Harriet Miers’s departure; but a few interesting moves. The two most noteworthy ones involve transitions between the public and private sectors: From politics to private practice:
* Asa Hutchinson has rejoined Venable’s Washington office. Hutchinson — a former Undersecretary of Homeland Security, Republican congressman, and chief of the DEA — left the firm in March 2006, to run (unsuccessfully) for Arkansas governor. From private sector to government:
* New York’s brand-new Attorney General, Andrew Cuomo, snags another former federal prosecutor for his “dream team.” Henry Greenberg is leaving the Albany office of Greenberg Traurig to serve as Cuomo’s counsel.
Law firm news, after the jump.
The latest news is that Morrison & Foerster’s New York office has matched the market bonuses. We’ve checked with our MoFo sources, and this is accurate.
So consider it CONFIRMED. Specific numbers, after the jump.
Earlier today, a reader made this comment:
“Why don’t you just call up all the firms now, instead of waiting for the rumors to appear one by one, so we can get this over with?”
Not a bad idea, given the “Chinese water torture” aspect to tracking bonuses. The only rub is that not all firms have necessarily decided on what they’ll be paying — at least in theory. Rumor is that the Cravath memo wasn’t issued until after the Cravath partnership met. So it’s (theoretically) possible that some firm might pay out above-market bonuses.
But as a practical matter, yes, it’s true: Everybody is probably just going to match market.
In light of all the parallel conduct, maybe there’s an antitrust issue here. But whether you can even get discovery on it depends upon the ruling in Bell Atlantic v. Twombly, currently pending in the Supreme Court.
Is “Associate Bonus Watch” less suspenseful than a Hitchcock film? Yes. Is the bonus-tracking game effectively over? Pretty much.
But ABW has been great for our traffic. And who knows, maybe there will be a surprise or two. So we’ll keep following the “news,” even if it consists of every other firm falling into line, until all the top Biglaw shops have announced.
A few moves to report today: Lateral Moves:
* Antitrust attorney Jeffrey Brennan, to Dechert (DC), from the FTC (where he was Associate Director of the Bureau of Competition and Assistant Director of the Bureau’s Health Care Services and Products Division).
* Capital markets lawyer Rachel Coan, to Morrison & Foerster (NY), from LeBoeuf, Lamb, Greene & MacRae.
* White-collar and securities litigator Stephen Ascher, to Jenner & Block (NY), from Kronish Lieb. On The Move [Antitrust Review] Federal Trade Commission Associate Director Jeffrey W. Brennan Joins Dechert LLP [Dechert] NY Capital Markets Partner Switches Firms [NYLawyer.com] NY Partner Leaves Merging Firm [NYLawyer.com]
A college graduate without student loan debt is akin to reading a kind quote about Kim Kardashian in a tabloid—it’s rare.
In the past eight years, student loan debt has nearly tripled to a whopping $1.1 trillion, and in the past 10 years, the percentage of 25-year-olds with such debt has risen from 25% to 43%
It’s gotten so bad, in fact, that New York Fed economists warned last month that the burden of student debt could stilt consumer spending by twentysomethings, as well as further hamper the recovery of the housing market and economy.
To get a better idea of what massive student loan debt (we’re talking over $100,000 massive) looks like, we talked to an attorney who graduated with a large student loan debt. We also consulted LearnVest Planning Services CFP® Katie Brewer to see just how their repayment plans stack up.
S. Fischer, 36, Attorney Graduated: 2001
How Much I Borrowed: $100,000
What I Still Owe: $45,000
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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: asia@kinneyrecruiting.com.
Deal flow has clearly picked recently up for most US associates, counsels and partners in Hong Kong/China and Singapore. We are on the phone with a lot of these folks on a daily basis, many of whom we have known for years. Further, the head of our Asia team, Evan Jowers, and Kinney’s founder and president, Robert Kinney, frequently meet in person with leading US partners in Asia to assess their needs and keep on top of the inside scoop at as many firms as possible. The need for legal recruiting help in Asia from experienced recruiters appears to be live and well. In March, Evan and Robert were in Beijing at such meetings, in April, Evan was in Hong Kong, and for half of June Evan will be in Shanghai and Hong Kong. Thus its pretty easy for us to tell when there has been an across-the-market pick up in capital markets and corporate work.
On an average day in Asia when Evan and Robert visit firms, they typically have 5 to 9 meetings a day, mostly with US partners in the market. The reason they have these meetings is not simply because Kinney makes a lot of US attorney placements in Asia and that a particular firm may have openings; instead these are just visits with friends. After years of working together as business partners, the folks at Kinney are actually these peoples’ friends. The firms Kinney work closely with in Asia (which is just about every law firm – call us if you want to know the one firm in the world we will never place anyone with again, ever, and why) look forward to the visits, or at least act like they do. After seven years in the market, many of the client partners are former associate candidates. Also, these US partners see Kinney as a very good source of market information as well, because they know how deep their contacts are in the market and how frequently they are speaking to counterparts at peer firms.
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We’re back. It’s Monday. We don’t like Mondays. We’re feeling sluggish today.
