What’s happening to the compensation of top partners at one major firm.
What kind of world are we living in? As we mentioned yesterday, a law school just announced that it’s lowering tuition — a shocking move, given that law schools almost always increase tuition by a few percentage points per year.
And now we get this news: a major law firm is cutting — yes, cutting — pay for top partners. This is a big surprise too, given that the powerful trend in the industry has been in favor of a growing divergence in pay between the highest- and lowest-earning partners. According to one recent study, “the spread in compensation between the highest- and lowest-paid partners in law firms has increased to 6-to-1 or 7-to-1 from the previous count of 4-to-1 or 5-to-1.”
So which firm is making this move, and what’s motivating it?
Unlike the latest Harmony Korine movie, filled with neon bikinis, former Disney princesses. and James Franco in bad dreads, my Spring Break consists of hanging with my kids while my wife works 24/7 on a grant application. We don’t make annual pilgrimages to Turks and Caicos; we make bi-weekly trips to Wegmans. But you know what? I signed on for this, and no amount of island sand can replace the sound of my younger boy reading a bedtime story to his little sister for the first time last night.
I read with interest the compensation package for the anonymous in-houser that Lat posted yesterday. In the comments, I pointed out that the package wasn’t outrageous or impossible, just that it was (way) outside of the norm. And that is okay. I chose this life and I am happy to say that it has been a soft landing for me. I have a good job, in a real estate market that is hard to beat — anywhere.
Lat is correct that Susan, Mark and I need to be circumspect about compensation; it would not do for our employers to see a pay scale pasted on these pages. So what can I say about my comp?
As regular readers of Above the Law know, we offer a wealth of content for in-house counsel. We have three in-house lawyers at major corporations who write columns for us — Mark Herrmann, Susan Moon, and David Mowry — and we supplement their coverage with additional in-house posts by our other writers.
One subject that our columnists tend to shy away from, for understandable reasons, is that of in-house compensation. They’ve written in generalterms about comp issues, but they haven’t, say, divulged hard numbers about how much they earn.
But one of our in-house readers reached out to us and did exactly that. Let’s find out how much this person makes. The claim: in-house lawyers are better paid than you might expect….
Apparently there’s no such thing as “rankings fatigue” in this world, because hot on the heels of the release of the 2014 U.S. News law school rankings, we’ve got another set of rankings. These rankings, brought to us by Forbes, focus on one of the most-discussed areas when it comes to the value of legal education as of late: starting salaries.
Let’s face it: no matter the reason you went to law school, money is constantly on your mind. Whether you’re currently rolling around in a bed full of cash like Demi Moore in Indecent Proposal or you’re rubbing your last two pennies together wondering how you’re going to make your next loan payment, your cash flow (or lack thereof) is very important, and starting salaries may reflect the money you’ll be able to make later on in life.
Let’s dig in to this list of the nation’s richest recent law school grads, as ranked by median starting salary….
Law schools, don’t expect your applications to rebound anytime soon. The Law School Admissions Council (LSAC) recently released data showing that fewer people took the February 2013 LSAT than any administration of the February test ever.
1988, folks. The Berlin Wall was still up. People were listening to Rick Astley and not ironically.
The reduced number of test takers is certainly a result of students beginning to question the value proposition of law school. But some of it is undoubtedly the result of intelligent students questioning the value proposition of being a lawyer.
Would you want to go into a field that hasn’t seen a starting salary raise since 2007?
Over the last three weeks, we have heard from an In-House Insider, an opinionated source of insight into Biglaw-client relations — see here, here, here, and below. As with the three prior installments, the only changes I made to the Insider’s words were those done to protect their identity, and Insider was given the opportunity to revise their points once I added the questions and commentary. Again, I thank Insider for the candid observations and thoughtful opinions on these core issues….
AP: Any serious observer of Biglaw can see that firms continue to struggle adapting associate development to the new state of Biglaw-client relations. What can Biglaw learn from corporate clients like yourself on that front?
A lot of in-house attorneys dream of reaching the top someday. And when they fall short of becoming the Managing Editor for Above the Law, they look to general counsel positions instead.
You get paid the big bucks, fly first class everywhere, and get to boss around outside law firms. What’s not to like?
I decided to find out. I checked with several general counsels (GCs) and chief legal officers (CLOs) (note — no one at my company), to learn what they think really sucks about being at the top of the legal hierarchy….
We’re in the middle of what we previously referred to as the second wave of law firm bonus announcements. Later today, for example, we’ll write about the Latham & Watkins announcement from yesterday. (So far we’re hearing mixed things; if you’re at Latham and would like to opine on the bonuses, feel free to email us or text us (646-820-8477).)
Right now we’re going to discuss the bonuses announced at Goodwin Procter (which actually just hired a partner, Brynn Peltz, away from Latham). The Goodwin bonus announcement came out on Tuesday of this week.
So what do 2012 bonuses at Goodwin Procter look like?
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: firstname.lastname@example.org.
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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