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….
Base salaries for Biglaw associates haven’t budged since January 2007, when Simpson Thacher led the charge to $160k. Year-end bonuses have remained fairly static since 2007 as well, the year of Cravath’s special bonuses. The 2012 bonuses represented an improvement over the 2011 bonuses, but only if you ignored the 2011 phenomenon of spring bonuses. On the whole, associate compensation is treading water.
But for Supreme Court clerks, aka “The Elect,” compensation continues to climb. In 2011, the signing bonus for outgoing SCOTUS clerks started to move from $250K to $280K. In 2012, the increase solidified, with $280K becoming the new going rate (and $285K becoming the above-market rate).
Now, just a year later, some firms are offering SCOTUS clerkship bonuses in excess of $280K or $285K. How much are they paying, and which offices of which firms are leading the market higher? The answer might surprise you….
Summer is supposed to be relaxing. Biglaw partners are familiar with the concept of summer relaxation, primarily from hearing about other people relaxing. Sample July client exchange: “No rush on that project, we are heading up to the Cape for the weekend, and when we get back we are taking the kids for a week to Basque country for a wine and ham festival. Actually we might hit Marbella on the way back for the weekend. Tell the other side I’ll be available after Labor Day for a deposition. Let my secretary know if there are any emergencies. Thanks. I’ll buy a bottle of Priorat for us to share when we win this case.”
In Biglaw circles, this summer has been anything but relaxing. By now, everyone has an opinion on the New Republic article that announced to the literate masses the upcoming end of Biglaw. Hard-thinking Biglaw lawyers have already forming opinions on the various opinions circulating around the Biglaw water cooler. (We need an industry conference to hash all this out, maybe with some clients to give their input. The electronics companies have CES; we needs a massive industry event of our own.)
Back to the end of Biglaw. The media, consistent with our human tendency to draw generalizations based on examples that are outliers, is very skilled at highlighting human interest stories at the margins of an issue. So in the New Republic article, we were treated to a description of the impact of a Biglaw firm’s glories and travails on rainmakers (who, if London-based, apparently have the pull to get an audience with the royal baby’s nanny at minimum) and displaced associates — people on opposite poles of the Biglaw power spectrum. Interesting stories, and easy to write about.
Ultimately, however, we need to explore the purpose of the grand Biglaw experiment before we can proclaim whether it has succeeded or failed. And for that we have to look at how Biglaw has treated perhaps its most important, if much-maligned, constituency: the service partner….
Unless you’ve made some deliberate, heroic effort to not know, you are aware that the most feverishly anticipated baby since 0 A.D. is now finally among us. This is a huge deal. People love babies. People love princesses and what not. So: huge deal. Thus, as we await the naming of the boy Windsor and as a flimsy topical pretext, let’s have a look at how the Magic Circle, the UK’s legal royalty, rate in the ATL Insider Survey.
The Magic Circle comprises five venerable London firms: Allen & Overy, Clifford Chance, Freshfields, Linklaters, and the terrifyingly-yet-diffidently named Slaughter and May. Powerhouse “Slaughters” is the only one of this prestigious group lacking a New York office. The other four are among the most truly global firms and are among the top ten firms in the world measured by revenue. S&M is also the only one of the group for which we lack sufficient survey responses to generate ratings based on the ATL Insider Survey. After the jump, see how the others’ New York offices stack up in terms of Compensation, Hours, Training, Firm Morale, and Culture.
At our recent Seattle event with in-house counsel — by the way, thanks to all the attendees and to Recommind, our sponsor — I asked the panelists about what they most enjoy about in-house practice. Christi Muoneke of DocuSign and Brad Toney of Classmates Media both discussed the satisfaction they get from working for a single client on interesting issues that call for both legal and business judgment.
Of course, there are many other good things about working as an in-house lawyer (which is why in-house posts are so coveted). Liberation from the billable hour is one big advantage. Healthy pay packages are another.
At junior levels, Biglaw associates who go in-house might take a pay cut (although not necessarily). But many of the top dogs of the in-house world earn amounts that far outstrip average partner pay.
Let’s take a closer look at Corporate Counsel’s recently released rankings of the nation’s best-paid general counsel. Some GCs enjoy pay packages that make Biglaw partners look like paupers….
* It’s Alito time, bitch! If you were wondering about any of the cases in which the justice recused himself last year, his latest financial disclosure report is quite telling. [Blog of Legal Times]
* Yet another appellate court has ruled that Obama’s recess appointments to the NLRB were unconstitutional. Alright, we get it, just wait for the Supreme Court to rule. [TPM LiveWire]
* Hey baby, nice package: With stock awards soaring, general counsel at some of the world’s largest companies had a great year in 2012 in terms of compensation. [Corporate Counsel]
* NYU professors want Martin Lipton of Wachtell Lipton to swallow a poison pill and step down from the school’s board of trustees over his ties to the University’s unpopular president. [Am Law Daily]
* Now that they’ve stopped acting like the doll they were arguing about in court, MGA has put aside its differences with Orrick to amicably settle a fee dispute in the Bratz case. [National Law Journal]
* Who needs to go on a post-bar vacation when you can take a vacation while you’re studying for the bar? This is apparently a trend right now among recent law school graduates. Lucky! [New York Times]
* A man puts assets into his pin-up wife’s name on advice of counsel, she files for divorce, and the firm allegedly takes her as a client. This obviously happened in Florida. [Daily Business Review (sub. req.)]
Ed. note: The Aspiring Lateral, a new series from Levenfeld Pearlstein, will analyze a variety of issues surrounding lateral moves, drawing on the firm’s experience in the lateral market as well as the individual experiences of LP attorneys. Today’s post is written by Peter Donati, the chair of Levenfeld Pearlstein’s Labor & Employment Group and the head of its Compensation Committee.
We’ve been conditioned to believe that lateral moves are all about money. Popular thinking — which may not be far from the truth — holds that law firms, held in collective thrall by the American Lawyer’s profit-per-partner numbers, focus on lateral hiring as the first step in a virtuous cycle that will increase their PPP metric, in turn attract more profitable laterals, and so on and so on. Laterals themselves, meanwhile, are viewed as economic actors lured away from their firms primarily through the prospect of increased, or guaranteed, compensation.
(Given the prominent role that guaranteed compensation is said to have played in the downfall of Dewey, and the pains Weil Gotshal took to point out its relative lack of compensation guarantees when announcing its recent layoffs, this particular carrot may be falling out of fashion. Even Weil conceded, however, that it has compensation guarantees in place for first-year laterals.)
In light of the focus on dollars in connection with lateral moves, it may surprise the reader to hear the head of a compensation committee say that in many cases, lateral candidates do not talk enough about money. To be more specific, lateral candidates often don’t scratch beneath surface questioning about their prospective new firm’s compensation system. If they did, their answers would inform them more deeply not only about their future paychecks, but the character of the firm they are considering….
As law students gear up for fall recruiting season — yes, the Biglaw gravy train still accepts new passengers, even if not as many as before — some rising 2Ls might start to think, after researching firm after firm, “All of these places sound alike! They all have cutting-edge practices in bet-the-company litigation or cross-border M&A. They all have collegial cultures and ‘no screamers.’ They’re all committed to diversity and pro bono.”
But there are real differences between law firms. If you doubt this, just check out Above the Law’s Law Firm Directory. You can see the different letter grades we’ve assigned to firms, based on reports from lawyers who work at each firm and on overall industry reputation.
Further proof that law firms aren’t all the same: while some firms are giving out pink slips, others are issuing bonus checks. And we’re in the middle of July, not exactly peak bonus season. What gives?
Ms. JD is hosting their 2nd annual cocktail benefit to raise money for the Global Education Fund. The event will be held on August 21, 2014 at 111 Minna in San Francisco. Our goal is to raise $20,000 to fund the legal educations of four dedicated law students in Uganda who count on our support to continue their studies at Makerere University during the 2014-15 academic year.
The Global Education Fund enable womens in developing countries to pursue legal educations who otherwise would not have access to further education. According to the World Bank, investment in education for girls has one of the highest rates of return to promote development. In Uganda, more than 45% of women over the age of 25 have no schooling at all, and men are more than twice as likely as women to have access to higher education. Together, we can work to end educational inequality. For more information about the program, please visit http://ms-jd.org/programs/global-education-fund/
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 seven years. You can reach them by email: firstname.lastname@example.org.
We at Kinney Asia have made a number of FCPA / White Collar US associate placements in Hong Kong / China thus far in 2014. Most of such placements have been commercial litigation associates from major US markets, fluent in Mandarin, switching to FCPA / White Collar litigation. Some have already had FCPA experience, but those are difficult candidates for firms to find (this will change in coming years as US firms are now promoting FCPA / White Collar to their 2L summers who are fluent in Mandarin and have an interest in transferring to China at some point).
Legal Week quoted Kinney’s Head of Asia, Evan Jowers, extensively in the following relevant article here.
There is a new trend in the market, though, where mid-level transactional US associates, fluent in spoken Mandarin and written Chinese, are interviewing for and in some cases landing junior FCPA / White Collar spots in Hong Kong / China at very top tier US firms.
When the LexisNexis Cloud Technology Survey results were reported earlier this year, it showed that attorneys were starting to peer less skeptically into the future, and slowly but surely leaning more toward all the benefits the law cloud has to offer.
Because let’s face it, plenty of attorneys are perhaps a bit too comfortable with their “system” of practice management, which may or may not include neon highlighters, sticky notes, dog-eared file folders, and a word processing program that was last updated when the term “raise the roof” was still de rigueur.