To balance out word of the robust O’Melveny bonuses, here’s some bad news out of California. Earlier this week, Gunderson Dettmer (boy I miss “ad”venture capital) laid off a number of junior associates. As veterans of the heady dot-com days may recall, Gunderson put itself on the map back in 1999 by leading the charge to $125,000 starting salaries.
Gunderson did not respond to multiple requests for comment, made yesterday and today, so we don’t have an official number of new people looking for work. But two sources claim that the firm laid off half of its first-year class (five out of ten associates) on Monday, plus an additional but unknown number of more senior attorneys. These layoffs are, according to a tipster, “on top of performance-related attrition / dismissals throughout the fall.”
Some of those laid off this week were stub first-years, i.e., class of 2008 from law school. As Chris Rock might say, “here today, gone today.”
This should not come as a great surprise, but let’s go ahead and close the loop. From the WSJ Law Blog:
Nearly two weeks ago, mere hours after Marc Dreier was arrested up in Canada for allegedly impersonating an in-house lawyer at a pension fund, lawyers at the eponymous law firm were heralding its doom. “It’s over,” said one litigation partner at the time.
On Tuesday, the predictions came true; Dreier LLP filed for Chapter 11 protection in bankruptcy court in Manhattan. In its petition, filed by Stephen Shimshak and Brian Hermann at Paul Weiss — where the receiver in the case, Mark Pomerantz, also hangs his hat — Dreier claims to have liabilities tallying between $10 million and $50 million.
The best reading in the petition is the list of creditors. Seems Mr. Dreier hadn’t been keeping up with the firm’s bills. Among those allegedly owed: the landlord of 499 Park Ave. ($908k); West Publishing ($441k); American Express ($323k); PR firm Van Prooyen Greenfield ($274k); ABM Janitorial Services ($89k); and AT&T ($81k).
Seriously, though, it’s a good sign for the firm, even if it may not be a lucrative engagement — the Treasury press release reports that “total cost for the firm’s services is not expected to exceed approximately $500,000.” It raises the possibility that rumors of the firm’s demise are greatly — well, maybe not greatly, but somewhat — exaggerated.
It’s getting ugly out there. For the first time since 2005, associate bonuses at Wachtell Lipton have dipped below 100 percent of base salary.
For those of you who aren’t familiar with the subject, here’s how bonuses at WLRK work. First, they’re lockstep, not tied to any billable-hours requirement or performance review. Everyone in the same class receives the same bonus.
Second, Wachtell bonuses are calculated as a percentage of base salary. Sometimes the percentage is the same from class to class; sometimes it’s not. In 2006, for example, there were divergences from year to year. When there are divergences, they generally favor seniority, with more-senior associates receiving bonus percentages that are higher than those given to juniors.
In 2006 and 2007, total bonus compensation at Wachtell (including midyear bonuses in 2006) clocked in at or above 100 percent of base salaries . This year, however, the bonus percentage sank below that threshold. We don’t have the exact number, but we’re hearing around 70 percent of base salary — “good” and “better than expected,” say two sources, but not as good as recent years.
(If this figure isn’t consistent with what you know, please email us. Please mention the class year that is the basis for your information, since sometimes the bonus percentage varies from class to class. Due to that variability, plus the lack of a firm-wide bonus memo, bonuses at Wachtell are less transparent than at other firms.)
Recall also that Wachtell base salaries are on a scale that is slightly above market. First-year associates at WLRK earn a base of $165,000 rather than the usual $160,000 (no Latham shenanigans here). A base salary of $165,000 and a 70 percent bonus would bring total compensation for a (non-stub-year) first-year to just over $280,000.
A Wachtell associate earning under $300,000 is a sad thing. But these are sad times.
Even the Wachtell holiday party was scaled back. More details, plus predictions about the firm’s future, after the jump.
Notorious B.O.A.L.T. is a UC-Berkeley law school student who enjoys setting law school lessons to music. He appeared on our pages before, rapping his way through CivPro.
Now he’s back. Notorious has gone acoustic, but this song embraces the rebellious roots of rock & roll. Notorious writes, “As a protest against the lunacy of the Socratic Method and the staggering lack of imagination on the part of the Boalt Hall administration in clinging to a cobwebbed curriculum, I will not be taking any final examinations this semester.”
“Do the Torts Shuffle” is his submission to Professor Patrick Hanlon in lieu of a written final exam. He asks that Hanlon consider giving him a “sub-standard pass in the course.” Here it is:
We think rapping lends itself more easily to talkin’ ’bout the law, but this is a worthy effort. The question is: is it a sub-standard pass level effort?
A lyrical excerpt, and speculation about the future of Notorious B.O.A.L.T., after the jump.
Update (3:30 PM): Please note that this post has been revised in various respects since its original publication. The situation is fluid and we are investigating further. Thanks.
It’s moving day. Time for the elite firms to separate themselves from everybody else.
Multiple tipsters inform us that O’Melveny & Myers associates, in California and in Washington, DC, received voicemails today confirming that first year associate bonuses would be… $27,500. The bonus scale for OMM, in CA and DC, is believed to look like this:
A tipster adds, “Everyone is also eligible for additional bonus amounts on top of that based on hours and performance.”
We understand that OMM traditionally makes these announcements over voicemail. Bonuses will be paid on December 31st, with an official memo following in January. Oh, and just for good measure, class appropriate pay raises will proceed as planned. Eat your heart out, Latham.
Update (3:30 PM): It appears that these California and D.C. bonus levels are subject to a minimum hours requirement of 1950. In addition, it seems that O’Melveny’s New York office is on the Cravath scale.
Update (3:45 PM): Associate editor Kashmir Hill just spoke by phone with an O’Melveny spokesperson. The spokesperson confirmed that OMM’s California and DC offices are paying bonuses to associates that are higher than OMM in New York.
“For some time, we have set bonus levels at a competitive rate for local markets,” she said. And as ATL readers know, this year the local market in New York is weak in terms of bonuses. The OMM rep pointed out that last year New York bonuses were higher than non-NYC bonuses.
In addition, the spokesperson added, the California and DC bonus scales are subject to a minimum hours requirement of 1950. Bonuses in New York are not subject to such a minimum (although “hours and merit are taken into account,” according to OMM).
In individual meetings that started yesterday — and will continue today and tomorrow — Gibson associates are being informed of their 2008 bonus. As we understand it, Gibson Dunn associates will be receiving a Half-Skadden bonus.
We don’t like Half-Skadden bonuses around these parts (see here, here, here, and of course here). But given that Latham won’t even announce their bonus structure until after the new year, you have to be happy that Gibson said something.
Of course, thanks to Latham, the bigger question is what Gibson is going to do with associate salaries. More on that after the jump.
This week we received several requests for advice pertaining to that associate albatross, the firm holiday party. What should I wear? How much can I drink? Should I upgrade to Platinum membership at Equinox? In order to accommodate your overwhelming neediness, this week we’re abandoning our typical Pls Hndle Thx format in favor of a short etiquette guide to holiday parties. Hop on board – the Straight Talk Express is about to roll.
Casino Themes. Casino-themed parties are landmines. People lose all reason when they hear that a “Dinner for Two at Rosa Mexicano” or an iPod Nano is at stake, and I’ve personally seen the power of fake money in unmasking serious gambling problems. I urge those who are likely to get, er “intense” at the fake craps table to calm down, step away and immediately get a life.
Dress Code. The safest bet is to show up wearing exactly what you wore to work. Don’t pull a secretary and get changed in the handicapped bathroom into some Dorothy Zbornak sequined tunic. Don’t premiere your new Diesel jeans and ridiculous Express bolero-inspired button down.
Drinking Level. The worst feeling in the world is waking up and trying to figure out what the hell happened the night before. While it is perfectly acceptable to get drunk and “do things” outside the office or on weekends at random bars, I strenuously, STRENUOUSLY advise no more than two drinks at holiday parties, unless one of those drinks involves Patron, in which case a drink limit of one drink should be imposed in conjunction with a mandatory party exit time of 10pm. Trust me on this.
After-Parties. DO NOT ATTEND AFTER-PARTIES. The only thing that comes of them is that you will see things involving your coworkers that you never wanted to see and be forever bound to your fellow partygoers with this secret and terrifying knowledge. There is a bloodline.
Last week, we brought you the story of a Michigan 2L that got caught up in a prostitution scandal with a university professor. The story generated a lot of discussion, including some comments apparently generated by the 2L herself.
A long comment was posted in the thread about the 2L, and sent to U-M Law listserve telling the other side of the story:
I’m the girl who got into the mess with the professor. I posted a version of this in the comments on ATL, because using my uniquename email on lawopen means outing myself, which gives the press permission to publish my name. Fortunately, one of my classmates has offered to transmit this message to you on my behalf. Those of you
who don’t know who I am yet will find out soon enough.
We can’t confirm that the 2L in question actually wrote this message. But we can confirm that the message was sent to the entire U-M Law community, and that many of our sources believe the message to be authentic.
Clear as we can tell, the Michigan 2L wants and deserves an opportunity to clear the record while maintaining her anonymity:
It’s difficult reading all of these things written about me without being able to offer an explanation/defense/vignette:
Now that we’re nearing the end of the year, it’s a good time to put things in perspective.
While recent posts have focused on what Elie calls “the four hoursemen of the economic crisis” (layoffs, salary freezes, low bonuses, and dissolution), we should always remember that there’s crushing debt, too. ATL can also be a place for hope.
Just last year, a “skinny kid with a funny name” was nominated for ATL Lawyer of the Year . . . and lost to an ATL commenter-prophet with a not-so-funny view of his career prospects.
In honor of that improbable victory by Loyola 2L, today’s ATL / Lateral Link survey calls for nominations for this year’s Lawyer of the Year.
Last year, your nominees included luminaries like Barack Obama (because “I mean, did you see the Obama Girl videos?”), Hillary Clinton (“She’s fabulous.”), Alberto Gonzales, (“Exemplifies why lawyers are so mistrusted in this country.”), Aaron Charney, (“For both the attention focused, success of action, and for the visibility [he] brought to the secondary issue of partner/associate relations (but not those kinds of relations).”), and, of course, the winner, Loyola 2L (“He’s generated the most thoughtful discussion of law school. That, and perhaps the publicity will help him get a job.”).
Submit your nominations for this year’s Lawyer of the Year below.
Also, in honor of Loyola 2L’s victory, we’re adding a bonus question (which may be the only bonus some of you get this year): we’re accepting nominations for the ATL Commenter of the Year, so you can tell us who’s “First!” in your heart.
Of course, even though there’s a spot for you to nominate a Commenter of the Year, you can also still feel free to nominate a commenter for Lawyer of the Year, too. Or, as one commenter in particular might put it, there are . . .
TWO! TWO PLACES TO NOMINATE COUNT LAYOFFULA!!! AH AH AH!!!!!
Update: This survey is now closed. Click here to see the nominees for Lawyer of the Year, and here to see who was nominated for Commenter of the Year.
Hard facts are difficult to come by, especially when the firm does not respond to requests for comment. But a tipster reports that Thacher Proffitt & Wood did have an associates meeting yesterday (as expected). At that meeting, we understand that associates were informed that TPW’s litigation department would close on December 31st.
No mention was made of any severance package that would be offered to displaced associates, nor was there discussion of any WARN obligations for the firm. TPW representatives did not respond to requests for comment last night.
According to our tipsters, whether or not there is a rescue by King & Spalding, Thacher’s litigation department won’t be a part of it. Word on the street is that the head of litigation is leaving TPW tomorrow.
The head of TPW’s litigation department is Richard Hans. Our sources tell us he is still with the firm during the merger negotations with K&S, but his contact information is no longer available on TPW’s website.
We will keep you posted with any additional TPW news as it comes in. If you have info to share, please email us (subject line: “Thacher Proffitt”). Thanks.
Update (10:25 AM): Multiple tipsters report that Richard Hans is leaving TPW for DLA Piper, his former firm. Word is that he will be taking a few attorneys back with him.
Watch to find out what some of our subscribers received in their May box!
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We currently have a number of active openings for associate roles at US and UK firms in HK / China, Singapore and two new in-house openings. As always, please feel free to reach out to us at email@example.com in order to get details of current openings in Asia, as well as to discuss the Asia markets in general and what we expect for openings later this year. Our Evan Jowers and Robert Kinney will be in Beijing the week of March 25 and Evan Jowers will be in Hong Kong the week of April 1, if you would like to meet them in person.
The US associate openings we have in law firms are in the usual areas of M&A, cap markets, FCPA / white collar litigation, finance, and project finance. The most urgent of our top tier (top 15 US or magic circle) law firm openings in Asia (among many other firm openings that we have in Asia) are as follows:
• 2nd to 5th year mandarin fluent M&A associates needed in Beijing and Hong Kong at several firms;
• Korean fluent 2nd to 4th year cap markets associate needed in Hong Kong;
• 2nd to 5th year Japanese fluent M&A associates needed in Tokyo;
• 4th to 6th year mandarin fluent cap markets associate needed in Hong Kong;
• 2nd to 4th year M&A / cap markets mix associate needed in Singapore.
The last time I flapped my wings your way, I tried to make at least enough noise about your mobile phone to make you more than a little bit uncomfortable. I hope I did. If enough of us become anxious enough about the known and unknown unknowns and knowns in our mobile phones, then we can start making wise decisions about how to manage that information and its resultant investigations.
Today, I’d like to put a finer point on the last installment’s topic by asking a question that seemed to catch most attendees off-guard at a conference panel that I moderated last week: is there discoverable personal information in a mobile app? Our panelists’ answer was a uniform “yes” with one stating that, if he had to choose only one type of data that he could discover from a mobile phone, he’d choose app data. Why? Because there’s simply so much of it and because almost all of it is objective – not just user-created like an email – but machine-tracked like GPS, usage duration, log in and log out times, browsed web addresses, browsed actual addresses. Also, most of us seem to have the idea that data doesn’t actually “stick” to our mobile devices the way it “sticks” to our hard drives. Maybe there’s a disconnect based on the fact that our phones are mobile so we assume the data is mobile to?
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