It’s Tuesday, November 26, past 5 p.m. Do you know where your bonus is?
When we surveyed our readership about 2013 law firm bonuses, 57 percent of respondents predicted that the first firm (traditionally Cravath) would announce during the week of Thanksgiving. That’s basically over. It’s theoretically possible we could get an announcement later tonight or sometime tomorrow, but it seems unlikely.
On this conservative analysis, an associate is bringing $640,000 in revenue to the firm while costing only $340,000, meaning that each associate has a surplus value to the firm of around $300,000/year.
On this model, a partner in a leveraged firm (i.e., four associates per partner), could make $1.2 million in a year without billing an hour.
– Samuel Blatchford, breaking down the economics of associate compensation in Ramblings on Appeal. (That’s assuming an associate billing a mere 2000 hours/year, which many associates should have hit by August.)
The days of wild spending on associate salaries seem like a distant memory washed away in the Great Recession. It was an exciting time to be a lawyer when every year (or even mid-year) a firm-wide email would explain that the pay scale was going up as part of the ongoing arms race among Biglaw firms to attract talent. That trickled down to Midlaw and the Boutiques and suddenly there were coke-fueled orgies all around.
Following the lead of Kilpatrick Stockton, Orrick, and other Biglaw firms, Greenberg Traurig has created some new non-partnership-track attorney positions. They pay less than traditional partnership-track — or, in GT parlance, shareholder-track — positions, but the billable-hour requirements are lower and the training is better.
What do these positions look like? Let’s find out….
You mean this groundbreaking Newtonian equation might be wrong?
One of the things I’ve learned in my time here at Above the Law is that most people are desperate to justify the decisions they’ve made, even if you can logically show them that they made the wrong call. People who go to terrible law schools argue endlessly that either their law school isn’t so terrible, or that they personally made a good call to go to a terrible school. People who are willing to take a massive pay cut to get the hell out of a soul-destroying Biglaw firm will still tell you that they “really valued” their time there. Obama voters look the other way while the “progressive” president allows robots to indiscriminately rain down death from the sky. Republicans act like they’re just supporting the “conservative fiscal policies” of the nutjob racists and homophobes they vote for.
Everybody wants to feel like every decision they made was the “right” one in some way. People like me who are willing to publicly admit that they’ve made some freaking awful decisions that haunt them to this day (like defaulting on my debts) are rare.
I don’t think we needed a whole study to make that point. I certainly don’t think we learn a lot by asking lawyers — generally employed lawyers — if they are “happy” with their decision to go to law school. What are they going to say? “Dear God, no. I hate my life. Please help me.”
But some law professors did ask that question, and SURPRISE, it turns out that going to an “elite” law school doesn’t automatically make you happier with your career decisions than going to a slightly less elite law school. Wow. In other super shocking news, marrying the hottest stripper in the club doesn’t make your marriage significantly more stable than marrying the second hottest stripper in the club….
To pass the time while commuting, I like to listen to podcasts. If ATL had a podcast I would add that to my listening rotation (especially if Lat is able to pull in sitting judges to guest host or as interview subjects). But this is not a column about podcasts. Though the idea for this contest came from a podcast I was listening to, the B.S. Report with Bill Simmons. The host was interviewing a former ESPN colleague, and they were discussing how certain statistics in baseball are misleading.
An example? Wins for pitchers. Apparently there is a movement to abolish that statistic. Why? Because a pitcher can pitch a terrible game, and still come away with the win, assuming his lineup bails him out. Conversely, a pitcher can pitch a beautiful game, and lose just because his hitters decide to approach their at-bats like the pudgy partner from bankruptcy at the annual intra-firm softball game. To prove the limited utility of using wins as a proxy for determining who is the best pitcher, consider the following. By nearly all accounts, Clayton Kershaw of the L.A. Dodgers is the single most dominant pitcher in baseball today. Unsurprisingly, he is reportedly in line for the richest (around $30 million a year or so) contract extension for a pitcher — ever. But he has fewer wins this season (so far) than Bartolo Colon, a 40-year-old journeyman pitcher (on his sixth team, and nearly a decade removed from his last All-Star game appearance), who is making non-equity service partner money ($3 million) by baseball standards. Wins simply do not tell the whole story.
Biglaw has its share of statistical shortcomings….
There hasn’t been much major good news on the associate compensation front over the past few years — since, say, January 2007. But recent weeks have brought pockets of minor good news for limited constituencies. Green shoots, anyone?
We’ve waited a long time to type these words. A major law firm just raised starting salaries for first-year associates.
Before you start chanting “NY to 190,” however, there are some things you should know. The raise relates to associates in what some might call a “secondary” legal market; we’re not talking about New York, or Washington, or Los Angeles. Associates at this firm, even post-raise, won’t be making the magic number of $160,000 a year.
That said, the legal market in question is rather large, and the law firm in question is a national and even international player. So the move could have ramifications beyond just the affected associates….
Very few people work in Biglaw for the thrill of being surrounded by lawyers. Nor are Biglaw refugees heard lamenting, on the odd chance they are lamenting leaving Biglaw at all, the fact that they are no longer surrounded by fellow attorneys. What do they miss, if anything? The money.
Biglaw refugees are not the only ones stirred by the thought of Biglaw’s outsized profits. Those profits are the nectar that draws the droves of worker-bee law students into the welcoming embrace of law schools. And the gruel that sustains the overworked bodies and minds of Biglaw’s associates and junior partners as they slave in the mineshafts hoping for their day in the sun. Biglaw’s millions are also the elixir that lubricates the arthritic joints of senior partners who insist on staying in their positions of power well past the expiration dates that their forebears adhered to. More than ever, it is about the money….
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: [email protected].
Since late last year, things have been booming in Hong Kong / China in cap markets, especially Hong Kong IPOs. M&A deal flow has recently been getting a bit stronger as well. Although one can’t predict such things with any certainty, all signs are pointing to a banner entire 2014 for the top end US corporate and cap markets practices in Hong Kong / China. This is not really new news, as its been the feeling most in the market have had for a few months now and things continue to look good.
The head of our Asia practice, Evan Jowers, has been in Hong Kong for about 10 days a month (with trips every other month to both Shanghai and Bejing) for the past 7 months (Robert Kinney and Evan Jowers will be in Hong Kong again March 15 to 23), and spending most of his time there meeting with senior US hiring partners at just about all the major US and UK firms there, as well as prospective candidates at all associate levels and partner levels, and when in the US, Evan works Asia hours and is regularly on the phone with such persons, as our the other members of our Asia team. Our Yuliya Vinokurova is in Hong Kong every other month and Robert is there about 5 times a year as well. While we have a solid Asia team of recruiters, Evan Jowers will spend at least some time with all of our candidates for Asia position. We have had long standing relationships, and good friendships in some cases, with hiring partners and other senior US partners in Asia for 8 years now.
Are you challenged by the costs and logistics of maintaining your office, distracting you from the practice of law?
Many small firms are successfully moving part—or even all—of their practice to a virtual setting. This even includes multi-jurisdictional practice spanning several states and practice areas, although solo and small partnerships are still the largest adopters of virtual law.
Can you do the same? The new article Mobile in Practice, Virtual by Design from author Jared Correia, Esq., explores how mobile technology bring real-life benefits to a small law firm. Read this new article—the next in Thomson Reuters’ Independent Thinking series for small firms—to explore how a mobile practice:
Everyone is talking about the importance of Social Media in Corporate America. But it is relatively safe to say that most law firms and lawyers are slightly behind the social curve. Most lawyers, at minimum, use LinkedIn, for networking. Some even use Twitter for pushing out short, pithy content, while many have Blogs, where they write their little hearts out. The adage “it is better to give than to receive” is not always true though in the world of Social. In the Social World – it is best to listen, give back and engage.
Social Media is a communications tool that can deeply educate you about the needs and wants of your clients and prospects when used in conjunction social media monitoring and sharing tools.
Take this quick quiz and see if you know how to use Social to help you engage more with your clients or to better service the ones you have.