Lat here. Going into the 2013 Biglaw bonus season, indicators were looking mixed.
Cravath, the supremely prestigious and profitable law firm that’s the traditional market leader on bonuses — as in the firm most widely followed by other firms, not necessarily the firm that pays the biggest bonuses — announced another large partner class. Last year, that boded well for bonuses.
On the other hand, Biglaw’s overall performance has been somewhat anemic this year. The stock market might be hitting new highs, but many law firms are running in place.
People have been waiting forever for Cravath to make its big announcement. Now the wait is over: at 4:45 p.m. today, Cravath announced its 2013 year-end bonuses.
How are they looking? What’s getting stuffed inside associate stockings this holiday season?
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.
Regular readers of Above the Law are well aware of the bimodal salary distribution curve of starting salaries for new lawyers. Lawyers understand why the curve looks the way it does: there are a few “elite” firms that essentially engage in salary collusion at the very top (don’t everybody start thanking Above the Law at once), while most lawyers will struggle to find a job in the $40K – $60K range.
When non-lawyers see this curve, they are surprised. The curve popped up on Mother Jones the other day, and author Kevin Drum called the $160K spike “pretty weird.” Then the commenters on his post — actually HELPFUL commenters who managed to weigh in without personal attacks on the author — explained to Drum why it was so.
But that’s kind of the problem: people only become aware of the bimodal salary distribution curve after they’ve been to law school (and done things like become a regular reader of Above the Law). They don’t get the information before they commit to law school, when the information could be useful. In a world without time machines, hindsight is blind.
Still, even people who have already committed to their dread fate can benefit from an understanding of history. Do you know what the salary distribution curve looked like in 1991, during the last “great” lawyer recession? Do you think the people who are charging you money to go to law school have seen it?
We here at ATL want to know what world’s largest legal audience — ours, of course — thinks. Hence, we ask our audience a lot of questions. Our Insider Survey, which is soon coming up on its 15,000th respondent, provided the raw materials for the creation of our Law Firm and Law School Directories, as well as features on various specific organizations, locations, and practice areas. To supplement our Insider Survey data, we also take a closer look at specific aspects of institutions, such as compensation and social media policies. Additionally, we check in with our readers for their take on topical events, including presidential politics and Obamacare. Today, we have a look at a handful of our ongoing survey projects: Social Media, Stipend/Advance, and Health Insurance. But first, we are looking for help with a new research initiative.
There is probably no other industry as obsessed with the concept of “culture” as the legal profession, particularly in the world of law firms. Many firms view their culture as a key element of their distinct place in the competitive marketplace. But what does that even mean? Is there consensus on what constitutes culture? Do clients notice or care? We would like to dig deeper into these questions. As a first step in this project, we are looking for a small group of currently practicing law firm attorneys who are willing — in complete confidence — to give us about twenty minutes of their time to answer some of our questions concerning the realities of what defines firm culture. Preference will be given to attorneys who have lateraled between firms. We will be conducting this project in partnership with our friends at Adam Smith Esq. and JD Match. If interested, please email us here.
Apart from the never-ending Insider Survey, ATL has three ongoing surveys which we hope will bring greater transparency to subjects of interest to our readers. Here’s a quick glimpse at where they stand today…
The year-end Biglaw management machine is starting to grind into motion. The compensation committee is starting to look at the numbers for individual partners — to decide who will be rewarded and who will be de-equitized. And the firm’s A/R collections crew is starting to pressure the partnership to get bills out the door and talk to clients about what will be paid by year’s end. The associate bonus committee? If one still exists, is must be having a hard time reserving conference room space to meet.
The end of the year is a serious time for law firms. For many individual lawyers in Biglaw, it is the time of year when their die may be cast, in terms of compensation, lateral movement options, or even their continued employment. As anyone who follows Biglaw knows, we are living in interesting times, with many firms navigating choppy seas in terms of client demand, financial performance, and expense management. And at many firms, there has never been a wider gulf between the rank-and-file partner and firm management when it comes to the ability to make or influence decisions about the firm. Partners at many firms are often clueless about what the firm is doing and why, to the extent that partners are asked to vote on lateral candidates or even mergers based solely on the “reassurances” and “enthusiastic outlook” of management.
The net effect of this divide between management and the partnership? An increasing sense among partners that they are simply assets of legal “brands” rather than owners or even stewards of a professional enterprise. For many, it is a bit of a hopeless feeling, especially when they consider the Biglaw options down the street, which usually present the same level of management opacity to the putative “owners” as their current firm. But just because management likes to tell the partnership to “leave the managing to us, you just focus on building your practice” does not mean partners aren’t entitled to information — even if it’s just the personal views of the managing partner on certain issues.
Here are five questions for your managing partner. The topics are varied, but the answers given should give partners a good sense of both their relative standing within their firms and the values that drive the business decisions of their leadership….
“Being a partner at an elite law firm isn’t what it once was,” as I recently wrote in a Wall Street Journal book review, but “while the brass ring might be tarnished, it still gleams brightly for many.” And with good reason: even if it’s harder than ever to become (and remain) a partner, for those who do manage to make it, the pay, perks, and prestige are plentiful.
The American Lawyer just released its latest New Partner Survey. The magazine heard from almost 500 lawyers who began working as partners between 2010 and 2013. About 60 percent of the survey respondents are non-equity or income partners — which makes sense, given the proliferation of two-tier partnerships, as well as how junior these partners are — and the rest are equity partners.
What are the most notable findings from the survey? Here are five:
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.
A couple of weeks ago, as Obamacare was just stumbling out of the gate, we asked our readers to tell us about the state of their own health insurance plans through their firms. Since the Recession, we have heard anecdotal evidence that some firms have been using health care cost clawbacks as a stealth expense-cutting tactic and de facto pay cut. We wondered how widespread a phenomenon this practice had become. Well, perhaps that’s a bit disingenuous. We had a strong feeling that, in this time of layoffs and all the rest of the Biglaw belt-tightening measures, that no category of expenses would be immune. And our survey results resoundingly confirm those suspicions: 89% of you tell us that your health insurance premiums have gone up since you started work at your firm.
A relevant tip showed up in the ATL inbox this week. An attorney at a prominent (V25) law firm sent us a memo outlining new changes to the firm’s health plan. Here’s an excerpt: “The deductible for the CIGNA PPO plan will change from $250 single/$750 family to $500 single/$1,000 family. Also, the PPO prescription copays [will all increase]. These changes bring our PPO plan design in line with market
practice for large law firms (emphasis added)”…
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….
Welcome, intrepid readers. We have our first column in the books, and we are already receiving interesting tips about the seedy underbelly of being “licensed to practice law in at least one jurisdiction” (as most advertisements for contract attorney jobs artfully put it). Keep them coming — learning juicy tidbits from the ghetto of the legal world is more fulfilling than coding documents.
This is Above the Law, and I know what keeps all of you clicking away… it’s all about the money money money. So what kind of a living can you expect to make if you are a contract attorney? Law students — you may want to take notes. Hell, if you’re a young Biglaw associate, you should also probably take notes… several Dewey associates can tell you what I mean.
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.
We currently have a very exciting and rare type of in-house opening in China at one of the world’s leading internet and social media companies. Our client is looking for an IP Transactional / TMT / Licensing attorney with 2 to 6 years experience. The new hire will be based in Shenzhen or Shanghai. Mandarin is not required (deal documentation will be in English) but is preferred. A solid reason to be in China and a commitment to that market is required of course. This new hire will likely be US qualified (but could also be qualified in UK or other jurisdictions) and with experience and training at a top law firm’s IP transactional / TMT practice and could be currently at a law firm or in-house. Qualified candidates currently Asia based, Europe based or US based will be considered. The new hire’s supervisors in this technology transactions in-house team are very well regarded US trained IP transactional lawyers, with substantial experience at Silicon Valley firms. The culture and atmosphere in this in-house group and the company in general is entrepreneurial, team oriented, and the work is cutting edge, even for a cutting edge industry. The upside of being in an important strategic in-house position in this fast growing and world leading internet company is of the “sky is the limit” variety. Its a very exciting place to be in China for a rising IP transactional lawyer in our opinion, for many reasons beyond the basic info we can share here in this ad / post. This is a special A+ opportunity.
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When Chintan Panchal decided to leave a global BigLaw partnership to start his own firm, he could only hope that he would face the high-quality problem of firm building that many had cautioned him about. Focused on the uncertainty surrounding of a new firm launch, he decided to tackle staffing needs, IT challenges, and financial planning requirements after he had built up his legal practice.
Panchal Associates LLP–a corporate/finance and outside general counsel boutique–was quickly off to a great start. Clients and matters were flying in the door, and Chintan soon had a team of lawyers and staff with a variety of operational needs. To continue building an excellent team and provide them with a competitive benefits package, to expand his physical presence to include a European practice and additional partners, and to scale his operations and IT capabilities to support this growing enterprise brought with it demands of time, money, and expertise. Chintan knew he needed help.
“With the assistance of NexFirm, we have upgraded the capabilities of our firm to meet, and in some cases exceed, the standards we were used to at our former BigLaw firms. Operationally, we can now attract and service clients we didn’t have the bandwidth to support in the past, and continue to build our team with the best and brightest legal talent in the industry,” said Chintan Panchal, adding “It has worked out quite well in our case; NexFirm is an essential partner for us.”
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