Skaddenfreude

An Inside Look at the Skadden Annual Review Process

By David Lat

We enjoy giving our readers the occasional peek behind the Biglaw curtain. Last month, for example, we shared with you the internal interview manual that Sullivan & Cromwell provides to its attorneys who conduct on-campus interviews at law schools.

Today, in a similar spirit, we take an inside look at the annual review process for attorneys at Skadden Arps. We’re into the fourth quarter of 2011, so these reviews are not far away.

In this special report, we’ll provide general observations on the Skadden review process, highlight noteworthy comments from leaked attorney evaluations, and show you a few reviews in their entirety (redacted to remove lawyer and client names). This information should interest Biglaw associates who want to know what partners look for junior lawyers, and it should also appeal to partners at other firms who want ideas on how to structure annual reviews.

If you’re interested in learning more about performance reviews at one of the world’s biggest and best law firms, please keep reading….

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Skadden Takes Its Heart from San Francisco — and Closes Its S.F. Office

By David Lat

Embarcadero Center (at right): Skadden's soon-to-be-former S.F. home.

Late last week, word started to leak out that Skadden Arps plans to close its San Francisco office, by the end of June 2011. A meeting was held on Friday where the closure was announced to the office. The S.F. office is essentially being folded into the firm’s Silicon Valley outpost.

Some of the initial reactions expressed concern. “Unclear with respect to job security,” said one source. “My cynical side wonders if this isn’t layoffs in disguise,” said another.

But further examination of the situation suggests that this is, as some might say, no big deal….

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Associate Bonus Watch: Skadden Matches Cravath

By David Lat & Elie Mystal

Bonuses have just been announced at Skadden. The following memo went out earlier today to all Skadden partners, from executive partner Eric Friedman:

To All Partners:

The attached memo announcing a year end discretionary bonus will be sent to associates in North America on a class by class basis today. Bonuses will range from $7,500 to $35,000 and will be issued in mid-December. While the same bonus schedule will be applied in all offices, communication to our international offices is being handled on an office by office basis. Counsel bonuses will be announced next week.

Bonuses are announced by class, but the range of $7,500 to $35,000 strongly suggests that Skadden is simply matching the Cravath bonus scale for 2010.

The form memo to associates that just went out, plus confirmations of bonus amounts for specific class years, after the jump.

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Skaddenfreude: A Look Inside the Life of a Kirkland & Ellis Contract Attorney

By David Lat

We call it Skaddenfreude: taking pleasure in the misfortune of others who work at large law firms. Today’s tale of Skaddenfreude involves a contract attorney working a project in the Chicago office of Kirkland & Ellis.

Let’s kick it off with a picture….

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Nixon Peabody Partner Gets Chastised by a Federal Judge for Work Hoarding

By Kashmir Hill

Nixon Peabody was a winner in Signature Flight Support Corp. v. Landow Aviation, a dispute between two aviation companies at the Washington Dulles airport. Nixon landed a victory for Signature Flight, and filed a motion for Landow to pay attorneys’ fees in the case.

Landow thought Nixon’s fees were sky-high and opposed the motion, resulting in a review of Nixon’s bills by Judge James Cacheris (E.D. Va.). Judge Cacheris buzzed Nixon’s bills. From the National Law Journal:

U.S. District Judge James Cacheris of the Eastern District of Virginia determined that Nixon Peabody’s $1.57 million in fees was too high and slashed about $440,000 off that amount, awarding $1.13 million….

In his July 30 decision, Cacheris found that the number of hours Nixon Peabody expended on the case demonstrated a “lack of billing judgment exercised by plaintiff’s counsel” and “overall excessiveness of plaintiff’s fee request.”

Less than half a million slashed? Pocket change — though that was on top of $205,102.50 that Nixon says it had already excluded from the bill.

Reading the opinion offers lots of fun Skaddenfreude, perhaps particularly for attorneys laid off by Nixon Peabody early last year. Partner Louis Dolan got knocked by the court for spending hundreds of billable hours at the end of 2008 doing work better suited for a junior associate…

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The Bluegrass State’s Sordid Sports Trial
(Or: University of Louisville basketball coach Rick Pitino must really hate Karen Sypher)

By Kashmir Hill

Rick Pitino and Karen Sypher

Every sports fan we know is bugging us to cover the prosecution of Karen Sypher, a former car-show model and auto-glass saleswoman, who is being tried for extorting University of Louisville basketball coach Rick Pitino, lying to the FBI, and retaliation against a witness. Since it concerns balls, it seems like a natural fit for resident ATL sports fan Elie Mystal, but there’s lots of sex in the trial testimony as well, so the case has been reassigned to me.

Well, not lots of sex. A little bit of sex. Like 15 seconds of it.

The trouble started with a sexual encounter between Pitino and Sypher back in 2003. Pitino, who is married with children, says the encounter was consensual. Sypher says it was rape. It gets really complicated from there. Lots of salacious stuff has come out of the trial: Pregnancy. Abortion. Extortion. Multiple lovers. Sypher giving her lawyer, Dana Kolter, a blow job to get representation. You know, pretty standard stuff…

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(Or: University of Louisville basketball coach Rick Pitino must really hate Karen Sypher)“

Law School Orientation According to a Jaded 2L

By Kashmir Hill

In my day (circa 2003), to be discouraged from going to law school, you had to make the effort to apply to a Biglaw firm for a paralegal job. After a year or two of working with disgruntled corporate lawyers, there was a good chance that your desire to become one of them would wither like a houseplant watered regularly with bleach.

These days, getting dissuading from going to law school is much faster and easier. Everywhere you look, people are saying that law school is a lost cause. Even Gawker — and if that’s not an expert source on the worth of a law degree, what is?

But, hey, we are law groupies here at ATL. We love and respect The Esquire. We also love debates. We will keep offering arguments for and against law school. (A big argument in the “for” category: If people don’t go to law school, who will read us?)

We are, however, frequently amused by those naysayers who lampoon the law school experience. One such law school regretter recently sent us an “unofficial law school orientation” memo that she had prepared for entering 1Ls. What caustic pearls of wisdom does this rising 2L have for law school newbies?

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Reality TV Star Victoria, of Downtown Girls, Fails the Bar Exam

By Kashmir Hill

MTV has sunk low. Really low. Its newest program, Downtown Girls — a reality TV show about a group of hot girls living in TriBeCa — is using the New York bar exam as a dramatic narrative hook.

We wrote before about the law grad on the show in our post: Why Unemployed Lawyers Shouldn’t Go On Reality TV Shows — Exhibit A: Victoria, of MTV’s Downtown Girls. Her bio on the MTV site described her as an aspiring attorney who is “a source of rattlebrained comic relief” and “currently awaiting the results of her second attempt at the bar exam.”

We’ve since learned from tipsters that Victoria is a Brooklyn Law School grad. Her results came in on episode 4 of the show. The show’s lead Carrie Bradshaw-inspired character real person is Shallon, who narrates at the beginning of the episode: “Victoria is about to find out the results of her bar exam and that could totally shift the course of her whole life.”

Consider life shifted. The second time was not the charm for Victoria. So what do you do if you find out that you failed the bar exam on national television?

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Open Thread: What’s Your Net Worth? (And how does it compare to Elena Kagan’s?)

By David Lat

Earlier this week, we published a Lawyerly Lairs post about a graduating 3L named Jimmy. According to the blog Urban Turf, “Jimmy” is a 27-year-old law student with a job in D.C. Biglaw lined up, starting at $160,000. If that’s not enough to make you hate Jimmy, he also has a credit score of 781, $140,000 in the bank for a down payment on his first home, and no student loan debt.

Jimmy triggered envy, player-hating, and other strong reactions in the comments:

“F**k Jimmy. I graduated with 3.3 and couldn’t fund a job with a Biglaw firm in DC. Hence I make $75K, have $90K in student loans, $5K on credit cards and $0 for a down payment. Again, F**k Jimmy.”

“I’m sure there are several women here who are also thinking ‘Fuck Jimmy.’”

Meanwhile, blogger Jane Genova expressed doubt that Jimmy exists. A newly minted law school graduate, with zero debt and (at least) $140K in the bank — is this like believing in Santa Claus?

Jimmy is certainly very fortunate. But is he so fortunate that he’s incredible? No. His financial state could be explained by any number of factors, alone or in combination, such as (1) generous parents or other relatives, (2) a past inheritance, (3) a successful first career before law school (e.g., in finance), or (4) a full-ride scholarship to law school.

In the comments to the Jimmy post, ATL readers started to anonymously share details about their personal finances and net worths. If you found this interesting, be sure to check out this article in this Sunday’s New York Times Magazine, entitled “Net-Worth Obsession.” It’s about people who obsessively track their net worths over time and compare themselves to others on this front, sometimes with the help of websites (such as NetWorthIQ, featured prominently in the article).

Are you a net-worth obsessive? Tell us your net worth (anonymously), learn the net worths of some of your fellow readers, and see how your net worth stacks up against that of Supreme Court nominee Elena Kagan — after the jump….

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(Down and Out) Lawyer of the Day: Cliff Lovette

By Kashmir Hill

When plotting the escape from Biglaw, many associates set their sights on entertainment law. In their Hollywood dreaming, they imagine mingling with the hottest actors, actresses and producers as they write up contracts and negotiate movie and music deals.

We know that many a recruiter is dangling this prospect in front of desperate young lawyers looking for jobs. But the actual entry into entertainment law is not terribly easy, and once you get there, it’s not always so sexy as you might imagine.

One lawyer in Atlanta lived the show biz law dream, though. Cliff Lovette worked in-house for a record company, and then founded his own entertainment law firm. He used to represent some of music’s hottest acts, with Usher and Lisa “LeftEye” Lopes among his clients. He was a regular at the Grammys. He was the subject of magazine feature stories. His law group even had its own MySpace page.

But Lovette is not lovin’ it anymore. Now, the Emory Law grad is on food stamps…

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Nationwide Pay Freeze Update: Slurpees Still on Ice (or Poured Out)

By Kashmir Hill

pay freeze salary freeze pay cut law firm.jpgAt the beginning of 2009, we were tracking salary freezes as law firms across the country froze their salaries at 2008 levels, rather than instituting lockstep raises based on seniority. Our most recent salary freeze round-up was in February. (We also acknowledged those that had raises as normal.)
Since then though, the salary freeze watch has been replaced by the salary cut watch. Rather than keeping salaries at 2008 levels, some firms are cutting back to 1998 levels.
Okay, not really. Salaries aren’t quite in line with the days of Ally McBeal, but some pay stubs are starting to resemble those of 2005.
So what about those firms that instituted “slurpee freezes” back in January? These firms said they were keeping salaries at 2008 levels, but that they planned to revisit the decision later in the year. It was assumed at the time that they would be revisiting in order to raise salaries, but that has not been the case.
If your firm hasn’t “revisited” the decision, that might be a good thing. None of those with slurpee freezes decided to raise salaries, though quite a few cut them. Specifics after the jump.

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Skadden NY to 190 Hand Sanitizer?

By David Lat

Skadden Arps Slate Meagher Flom new.jpgThe dreaded swine flu, aka the H1N1 virus, made it to Mayer Brown last week. Will it now work its way up the Am Law 100?
This afternoon, via Fashionista (last paragraph), we learned that swine flu has hit the hallowed halls of Vogue. And we all know who shares a fancy building with Vogue and Conde Nast: Skadden Arps.
In the past, Skadden employees have expressed disappointment over not sharing elevators with Vogue’s glamorous hotties. Perhaps now the Skaddenites are thanking their lucky stars — or wishing they had taken Sidebar.

Nixon Peabody’s Proposed Bonus Structure

By Elie Mystal

Nixon Peabody logo.JPGWhen we reported on the salary cuts at Nixon Peabody, we mentioned that the firm would allow associates to make up some of the money come bonus time. Here’s how the firm explained the opportunity:

With our new levels of base pay in place, we will be introducing a bonus program that offers the potential of up to 30% of base pay based on firm and individual performance. We believe this innovative pay structure will reward our highest performing associates while lowering total compensation for those who perform at lower levels.

We’ve gotten a look at Nixon’s proposed “up to 30%” bonus structure. This hasn’t been finalized, but here is what is going around the office:
Nixon Peabody proposed bonus structure.jpg
Let’s break this down, after the jump.

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The February Freeze Round-up: New Firms on Ice (and smaller raises at Jenner & Block NYC)

By Kashmir Hill

pay freeze salary freeze pay cut law firm.jpgAnother month, another round of freeze announcements. Here are the latest firms to announce the withholding of class year raises in 2009:

  • Baker & McKenzie (“Slurpee” freeze– will be revisited on June 30)
  • Cooley Godward
  • Patton Boggs
  • Seyfarth Shaw

    Jenner & Block is not freezing salaries, but it is giving smaller raises to New York associates. The salary scale will no longer match the market in New York, reports one ATL reader:

    Jenner & Block just announced that they are not matching NY market for salaries. Instead, they are going to pay equal salaries across their offices, meaning their NY office associates will make at least $10k less than other associates at tier one firms in NY. From what I hear, people are pretty angry, particularly because a) Jenner also does not cover bar fees or court admission fees (as nearly all other firms do, particularly in NY); b) Jenner does not count all pro bono hours one-for-one with billable hours towards their 2000 hour requirement (unlike many firms); and c) Jenner’s profits went up last year.

    Since Jenner is essentially doing a salary raise cut (rather than a freeze), it has avoided being added to our list of firms that have frozen. To see Cooley’s 2009 salary levels, Seyfarth’s freeze memo, and the growing list of firms that are keeping 2009 salaries at 2008 levels, you have to jump.

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    Associate Bonus Watch: Skadden Memos Are Out

    By David Lat

    law firm associate bonus watch 2008 biglaw bonuses.jpgIndividualized memos have been issued to Skadden Arps associates to inform them of their 2008 bonuses and 2009 base salaries. The Skadden base salaries reflect the customary annual pay raises — sorry, Lathamites.

    Because Skadden’s announced bonuses this year are so much higher than the Cravath-established market level, folks at other firms have wondered: Are the Skadden bonuses for real?

    The short answer: yes. To quote the famous Seinfeld episode, “they’re real — and they’re spectacular.”

    We’ve surveyed Skadden associates from a variety of class years, from 2008 through 2001. The scale we’ve pieced together looks like this (i.e., like last year’s year-end or regular bonus schedule, but without the “special” bonus amounts):

    Class of 2008 — $35,000 (prorated)
    Class of 2007 — $35,000
    Class of 2006 — $40,000
    Class of 2005 — $45,000
    Class of 2004 — $50,000
    Class of 2003 — $55,000
    Class of 2002 — $60,000
    Class of 2001 — $65,000

    The bonus schedule is, of course, subject to the 1600-hour minimum. That’s not an onerous burden, and pro bono hours count towards the minimum, in unlimited amounts. If you fall short of the 1600-hour minimum, you may still be eligible for a 50 percent bonus — aka a “half-Skadden” bonus.

    After the rest of the New York market settled around the Cravath bonus levels, some wondered: Do the Skadden partners feel like chumps?

    Find out, after the jump.

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    Latham & Watkins Salary Shenanigans Follow-Up

    By Elie Mystal

    Latham Watkins LLP lw logo.jpgMaybe Latham & Watkins was never into this whole “____ to $160K” thing to begin with. When Latham finally raised salaries across the board back in May 2007, we reported:

    Well, it appears that Latham has been shamed into giving into the “hysteria” surrounding associate comp.

    As we’ve discussed, Latham’s associate salary freeze essentially cancels out the pay raise from 2007. Whether you call it a salary freeze or a pay cut, Latham chairman Robert Dell is calling it sound business. The Blog of the Legal Times reported this quote from the chairman earlier today:

    We are modifying associate compensation as part of a prudent business strategy in the face of challenging economic times. All associates moving to the next class year on January 1, 2009 will continue to receive the same base compensation as they received in 2008. We are confident that our business strategy, our diverse practices and our strong global platform will serve our clients and our firm well as we all face the challenges of a difficult business environment in 2009.

    More discussion, including a salary chart that Lat prepared to show just how bad L&W associates must be feeling today, after the jump.

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    Nationwide Pay Raise Freeze Watch: Latham & Watkins

    By Elie Mystal

    economy freezes over.JPGIf you liked your 2008 salary, you’re going to love your 2009 salary. Latham & Watkins just sent around this email about 2009 associate compensation:

    The world economy is experiencing unforeseen and unprecedented dislocations. Our clients are feeling those impacts and the legal community is not immune. The Executive Committee has spent the last few weeks discussing these critical issues in the context of planning for 2009. While we anticipate that the diversity of our practices and global reach will serve us well in the year to come, it seems clear that the global economy will continue to be challenged at least through 2009. As a result, we are modifying associate compensation as part of a prudent business strategy.

    Latham Watkins LLP lw logo.jpgEffective January 1, 2009, associates moving to the next class year will continue to receive the same base compensation as they received in 2008. Please do not hesitate to contact your local Associates Committee members if you have any questions about the resulting salary scales.

    We expect as a general matter to continue to reward outstanding performances through our merit-based bonus pool. As in previous years, we will announce bonuses in late January.

    We are confident that by continuing to work together we will be well positioned to succeed in the face of the economic challenges that lie ahead. We thank each of you for your many contributions to the firm.

    Freezing salaries is now part of the “market.” The latest associate pay raise is effectively being undone.

    After the jump, what was that about bonuses?

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    S&C Bonus Watch: What Does an Associate Bonus Look Like?

    By Elie Mystal

    S&C logo.jpgI think I speak for many ATL readers and Biglaw followers when I ask: when the heck is S&C going to announce its 2008 associate bonuses?

    Because the delay is getting ridiculous. It’s December 15th. All of S&C’s peer New York firms have announced already, except for Weil — and historically speaking we can’t expect Weil to move before S&C. S&C has always been a market leader on this matter. What gives?

    One tipster puts the extent of S&C’s delay in stark relief:

    S&C normally pays our bonus along with our December paycheck. Today, however, my December paycheck posted to my account, but no bonus along with it. Still no announcement from them regarding the change, so this is rather surprising.

    It now seems likely that S&C won’t pay a dime of the 2008 associate bonus in 2008. That’s annoying. Essentially, the conversation over at S&C seems to be going like this:

    S&C: I got a threshold. I got a threshold for the abuse that I will take. Now, right now, I’m a f**** race car, right, and you got me the red. I’m just saying that it’s f*#^@! dangerous to have a race car in the red. That’s all. I could blow.

    ATL COMMUNITY: Oh! You ready to blow?

    S&C: Yeah, I’m ready to blow.

    ATL COMMUNITY: Well, I’m a mushroom cloud laying mother$^&er, mother@%^&er. Every time [I open my inbox and don't see a fair compensation message], I’m Superfly T.N.T., I’m the Guns of the Navarone!

    Get with the program S&C.

    Happy Monday.

    Earlier: Prior ATL coverage of associate bonuses.

    Associate Bonus Watch: Debevoise Announces Bonuses at 6:54 p.m. (Did they think nobody would notice?)

    By Elie Mystal

    law firm associate bonus watch 2008 biglaw bonuses.jpgDebevoise & Plimpton has been very busy and very profitable. They recently sent around a positive internal email about the firm’s business during the downturn. And we know that the Siemens case has treated them well.

    But in 2008, public protestations of solid business mean nothing when it comes to associate compensation. Debevoise announced that they were paying half of what Skadden is offering:

    2008: $17,500 (pro-rated)

    2007: $17,500
    2006: $20,000
    2005: $22,500
    2004: $25,000
    2003: $27,500
    2002: $30,000
    2001 (and senior): $32,500

    The numbers — while annoying — are not really that surprising. Schulte Roth, housed in the same building, earlier today announced the same scale (although subject to an hours requirement). Even our Debevoise sources anticipated that, with Siemens winding down, the firm would be more forward-looking with this round of bonuses.

    What is surprising is the timing of this bonus announcement. The email went out from managing partner Rick Evans at 6:54 p.m. WTF (“Sacré bleu” in Debevoise-speak)? Was management hoping to dodge the news cycle with an after-hours announcement? Somebody should let them know that the internets are on 24/7.

    Our hearts go out to the Debevoise associates that were still working when this announcement crashed into their inboxes. Professionalism is its own reward. All Skadden associates are getting this Christmas is twice the money.

    Read the full memo after the jump.

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    Associate Life Survey: Got Morale?

    By Justin Bernold

    funny-pictures-happy-can-empty-inside.jpgWe received almost two thousand responses to last week’s ATL / Lateral Link survey on attorney morale. That’s way up from the survey we did in April.

    Your morale, not so much.

    Roughly 43% of practicing attorneys who responded to the survey are in poor spirits:

      * 24% said their morale was “bad”, up a bit from 21% in April.

      * 11.5% said their morale was “awful”, which is about the same as April.

      * 7.6% of respondents said their morale “couldn’t be worse.” This is actually down from 9.6% in April, suggesting that some of the most enthusiastically mopey April associates have now found unhappiness of a less extreme sort. (Either that, or they discovered that their morale really could be worse.)

    Survey Results: How’s Your Morale?

    morale 12-3-08.JPG

    Structured Finance and Real Estate attorneys are still the mopiest, with 69% and 66%, respectively, feeling “bad” or worse. This is actually a big drop for real estate associates since April, when only 56% said they were unhappy.

    Interestingly, only 31% of law students said they were happy, with 50% saying their morale was “bad” or worse.

    But, the glass is still almost half full. Surprisingly, morale, while not exactly great, hasn’t really fallen much since April.

      * 23.7% of practicing attorneys who responded to the survey, said their morale was “good”, which is only slightly down from April’s number (25.8%).

      * 13.3% said their morale was “great”, which is actually up a little from April (11.5%)

      * And 3.2% of practicing respondents thought their morale “couldn’t be better,” basically the same as April.

    So, overall, about 40% of respondents are still happy.

    Patent associates were the happiest lot, with 58% declaring their morale to be at least “good.”

    Bankruptcy associates, energy attorneys and judicial clerks were close behind at 57%, and trademark lawyers branded themselves 51% happy.

    More results after the jump.

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