Fair is fair: I wrote last week about “what drives partners nuts.” Having armed associates with the ammunition needed to drive partners crazy, it’s only right that I arm partners with ways to drive associates nuts. (I realize that many partners are quite good at this even without my help, but I figure a stray few could use some guidance.)
Come on, partners, how can you drive associates nuts?
First: Give associates disembodied projects!
If you wanted someone actually to be interested in a project, you’d tell that person what the project was about. You’d explain what the transaction entails, what the client needs, and the critical issues likely to arise. In litigation matters, you’d explain who’s suing whom for what, the path the case is taking, the client’s main concerns, and the likely endgame. That would put a person’s brain in gear, and the person might actually care about his or her work.
Today at 5 p.m. is the deadline for former partners of the bankrupt Dewey & LeBoeuf law firm to sign up for the “Partner Contribution Plan.” Under the terms of the Plan, which in its latest iteration seeks $90.4 million in “clawbacks” from ex-partners, participating partners would contribute specified amounts to the Dewey bankruptcy estate in exchange for releases from future liability (to the Dewey estate, to other participating partners, and to Dewey lenders, thanks to recent revisions to the PCP).
When talk of the Plan first surfaced, I opined that “[s]uch a deal sounds reasonable in principle.” I later observed that even if the PCP might not be perfect, “[i]f you’re a productive partner, happily ensconced at a new and stable firm, and just want to forget the D&L debacle and return to serving your clients, this deal may Dewey the trick.”
But now, after numerous revisions to the Plan, seemingly endless extensions of the deadline to join, and a still-insufficient amount of participation, I’m beginning to think that maybe it just won’t fly — and Dewey should just be allowed to die, i.e., slip into a straight-up liquidation. Perhaps Dewey’s bankruptcy advisers should stop trying to flog a product that nobody seems interested in buying.
UPDATE (4:35 PM): It looks like the Dewey estate’s perseverance has paid off. The $50 million participation threshold has been reached.
Here’s one good thing about the Partner Contribution Plan: thanks to the PCP, we now have detailed information about how much each of Dewey’s partners received from the firm in 2011 and 2012. And yes, we’re willing to share the data for the top earners with you, in spreadsheet form.
Some people are big believers in the virtues of black-box compensation. But here at Above the Law, we’re all about transparency….
Law firm consultants have endless advice about how best to compensate partners at firms. The consultants analyze the extremes: Lockstep compensation avoids quibbles about pay, but it may reward less productive older partners at the expense of the young turks. Eat-what-you-kill compensation rewards people who bring in business, but may cause bitter fights over client origination credit or cause partners to hoard their clients.
Various permutations on those extremes have their own advantages and disadvantages. But riddle me this: Why don’t we see consultants debating the pros and cons of pure black-box compensation? Under this system, the managing partner (or a small committee) sets compensation for each partner in the firm. There is no specific formula for allocating the spoils, and partners are forbidden from discussing their compensation with each other. Each partner is told what he’ll make in the coming year (either as an absolute number or as a projected draw assuming the firm hits 100 percent of budget), and the process is over.
At least a few large firms use black-box compensation systems, so this subject surely deserves a moment’s thought. What do you think of a black-box compensation system — good, bad, or indifferent?
Ed. note: This is the second column by Anonymous Partner based on his interview of a more-senior partner, “Old School Partner” (“OSP”). You can read the first column in the series here.
“It was a nice profession,” Old School Partner told me, especially for a senior partner at a white-shoe firm. Collegiality, interesting work, and a good living were his. Despite occasional internal dust-ups about compensation within the partnership, partners were generally content with what they were making.
But things were about to change, and what had been a guarded and close-knit segment of the legal profession was soon thrust into an unwanted spotlight. It was a “watershed” moment for partners.
The “watershed” that mucked things up? The launch of American Lawyer magazine….
Earlier this week, we wrote about the lavish payments that Dewey & LeBoeuf made to its former executive director, Stephen DiCarmine, and its former chief financial officer, Joel Sanders, in the year leading up to the firm’s bankruptcy filing. Each man received almost $3 million in salary, bonuses, and expense reimbursement. (There’s additional detail and number crunching over at The Lawyer.)
Today we bring you additional interesting information from — and speculation about — the Dewey bankruptcy filings. For starters, who are the two Dewey partners who received more than $6 million each in the year leading up to the Chapter 11 petition?
Ideally, prosecutors can afford a bed instead of just a park bench.
Did you hear the one about prosecutors going on strike? No? Me either, until now. A county DA’s office in the San Francisco suburbs announced this week they are considering striking to protest new, unpopular labor contract.
As David Lat said when I told him about the story, “Wow, that’s wild.” The idea of prosecutors going on strike struck Lat as comparable to the prospect of police officers going on strike.
Why exactly does the prosecutor’s office feel like a walkout might be justified? Maybe being “the most understaffed, overworked prosecutorial unit in the Bay Area” has something to do with it…
* Apple is considering digging its greasy Gorilla Glass hands into Twitter. How long until they unveil the iChirp and the iStupidDessertPic? [New York Times]
* I’m sorry your three-year-old shot you with your Glock. Perhaps the safety could be better, but perhaps you shouldn’t have left a loaded gun within reach of a toddler, either. [JD Journal]
* Mitt Romney hightailed it out of England as fast as he could. He spent Sunday at the Western Wall in Jerusalem. I don’t think it’s hard to guess what he was praying for. [Washington Post]
* Bad day: getting your hand bitten off by an alligator. Worse day: facing charges of “unlawful feeding” of said alligator. Do I even have to say this happened in Florida? [ABC News]
* In continuing stupid Olympic news, NBC has caught a bunch of flak for cutting a tribute to victims of terror attacks from its U.S. broadcast. Apparently the segment wasn’t “tailored for a U.S. audience.” Well, neither is Mr. Bean. And we handled that fine, right? [Gawker]
* I just got back from Alaska. I’m so excited to go back indoors and get back to my desk after flying around mountains and looking at stupid, ugly glaciers for a week. #Sarcasm. [Twitter]
Last year, all things considered, wasn’t a bad year for Biglaw. The law firms of the Am Law 100, for example, experienced decent growth. In 2011, for the Am Law 100 as a whole, gross revenue grew by 5.3 percent, revenue per lawyer grew by 1.9 percent, and profits per partner grew by 3 percent. It was a perfectly fine year for partners.
How did their counterparts on the corporate side fare? Alas, not as well, according to Corporate Counsel’s latest compensation survey of the nation’s general counsel. Base pay for GCs in the survey declined by 1.8 percent, to an average of $611,411. Bonuses and nonequity incentive pay slid by an even larger number, 7.7 percent, to an average of $1,125,458. Meanwhile, in terms of non-cash compensation, the average stock award fell by 10.8 percent, to $1,426,325, and the average stock option award dropped by a whopping 18.7 percent, to $732,453.
These are just the top-line figures — which, of course, conceal a lot of individual variability. Let’s take a look at some specific names and numbers, as well as the top ten highest-paid general counsel….
It’s getting hot in herre [sic] — and not just due to the scorching temperatures we’re experiencing here in New York City. Today we’re experiencing a flare up of Biglaw bonus news. And maybe some partners are starting to sweat, thinking about whether they might have to cough up some extra cash to keep their associates happy.
Okay, that might be a bit of a stretch. The notion of widespread midyear bonuses, comparable to the spring bonuses we saw in 2011, remains laughable an outside possibility. But it’s a little less crazy than it might have seemed a few weeks ago, now that multiple firms have plunged into the summer bonus pool.
The evolution of relationships between the genders continues. Currently, in law firms, there is an interesting conundrum; balancing the desire for a gender-blind workplace where “the best lawyer gets the work and advances” and the reality of navigating the complicated maze created by the fact that, in general, men and women do possess differences in their work styles. These variations impact who they work with, how they work, how they build professional connections and how organizations ultimately leverage, reward and recognize the talents of all.
Henry Ford sat on his workbench and sighed. A year earlier, he had personally built 13,000 Model Ts with his own hands. Fashioning lugnuts and tie rods by hand, Ford was loath to ask for help. Sure, there were things about the car that he didn’t quite understand. This explains the lack of reliable navigation systems in the Model T. But Ford persevered because he knew that unless he did everything, he could not reliably call these cars his own.
“Unless my own personal toil is responsible for it, it may as well be called a Hyundai,” Ford remarked at the time.
The preceding may sound unfamiliar because it is categorically untrue. And also monumentally stupid. Henry Ford didn’t build all those cars by hand. He had help and plenty of it. Almost exactly one hundred years ago, Henry Ford opened up the most technologically advanced assembly line the world had ever seen. Built on the premise that work can be chopped up into digestible pieces and completed by many men better than one, the line ushered in an age of unparalleled productivity.
Today, an attorney refers business because he can’t do everything the client asks of him.
There are three reasons why this is way dumber than a made-up Henry Ford story…
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, 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.