This is the time of year when everyone pulls out a Top Ten list of one thing or another. I don’t mind; a Top Ten list is a convenient format for reflection and New Year’s Eve has always been a time of reflection for me, whether that involves setting goals or just thinking about the ups and downs of the past year. So I thought I would use the opportunity to offer my perspective of the Top Ten Differences Between Biglaw and Boutique. So without further ado, let’s push in the button and let the top ten play:
10. Money, Money
When you work at a firm, you get paid either a salary or an hourly rate. You get employer-paid benefits and you might even get a bonus. But you know the firm is billing you out at hundreds of dollars an hour, and your hourly wage comes nowhere near that. When you run your own shop, you don’t get a salary but you keep all the money paid by your clients, or recovered in a contingent fee agreement. Of course, you’re also responsible for all the expenses.
Whether that is a good or bad thing depends on a lot of factors and varies by individual, but no one can deny that the economics between working in Biglaw and working for yourself are very different.
Read on after the jump for the rest of the Top Ten Differences Between Biglaw and Boutique….
Here at Above the Law, we spend a lot of time talking about bonuses to associates working in Biglaw firms. As you might have noticed from our bonus coverage over the past month or so, the size of these payouts is underwhelming to many who are receiving them.
But that coverage only deals with those few, those happy few, who are lucky enough to receive any type of bonus whatsoever. For many in and around Biglaw, their bonus this year will be $0. Their spring bonus will not exist. And they won’t even have Cravath to blame for it.
We’re talking about paralegals. We’re talking about secretaries. We’re talking about government lawyers and law clerks and a bunch of other people who worked really hard in 2011 and might get no bonus at all.
Michigan Law School, a state school, charges $46,586 per year in tuition. It then conservatively expects students to incur another $18K-plus in living expenses to bring the price tag for one year’s worth of a Michigan legal education to $64,716 for in-state residents. That prices out to $194,148 for the full three years, and that’s assuming that Michigan doesn’t raise tuition while you are there.
And Michigan is one of the few places that can, more or less, claim that it’s worth it. To be sure, it’s not worth it for all the students. Remember, Louisville Law Dean Jim Chen just told us that people need to make three to six times their law school’s yearly tuition in annual salary if they go to school on loans and want to one day be financially sound homeowners. Some Michigan grads are banking upwards of $279,516, but certainly not all.
Still, one would expect a significant amount of that high tuition goes toward making Michigan Law what it is, and keeping the professional opportunities rolling for Michigan graduates.
Apparently, keeping Michigan Law what it is involves paying Michigan Law Dean Evan Caminker quite a tidy sum….
Earlier this week, Kirkland & Ellis associates started receiving phone calls about their bonuses. Many associates are reporting that their bonuses “shattered the market.” In the words of one K&E source, “It is mad money. Huge year for everyone here.”
It’s important to note that Kirkland has a “black box” bonus structure, in which the payouts are highly individualized and based on performance and hours. Every year, there are some winners and losers.
Right now we’re hearing a lot of chatter from K&E winners. Many are reporting bonuses that are significantly higher than Cravath — which really isn’t hard to do, given how terribly low the Cravath bonuses are this year (so low that partners at other firms are thanking their Cravath counterparts). More to the point, we’ve got K&E people saying they made more than they would have at Quinn Emanuel (which is impressive!).
But, there’s a catch. While some firms like Sullivan & Cromwell anticipate paying spring bonuses, some of our Kirkland friends are telling us that this bonus is inclusive of a spring payout. So K&E might not pay a spring bonus, even if other firms do…
In the world of Biglaw, the subject of bonuses is a hot-button issue. People will disagree, often vehemently, on whether the bonuses paid by a particular firm are generous or cheap. To paraphrase an old joke, if you ask two people about bonuses, you’ll get three opinions.
Given these frequent differences of opinion, whenever we publish an Associate Bonus Watch post, we’re eager to get opinions and additional information from you, our readers. As you can see from looking back at our prior bonus coverage, we often update our bonus posts to add new information or another point of view. You can send us reactions to your firm’s bonuses — or news of bonuses we have not yet covered — by email or by text message (646-820-8477 / 646-820-TIPS).
After stealing all the Whoville toys, the Grinch planned to re-gift them to his army of lawyers.
I’m much more likely to throw away a gift or give it to charity than to regift something I already have or don’t want. I think I’d live in fear of the original gift-giver meeting up with the regift recipient and talking about how I was a bad friend for orchestrating the whole mess. I’d rather those two people meet up and say, “Did Elie get you anything? No? Too bad. I was hoping he did and you could tell him it sucked. That’s what he told me when he opened my present.” There’s something intangibly sneaky and dishonest about regifting. It’s just not classy.
Of course, people do it all the time. And not because they lack class so much as they lack money. Even if it’s tacky, regifting usually comes from a good place: you want to give presents to more people than you can afford to shop for.
But there’s nothing laudable (or forgivable) about how one small law firm in California goes about re-gifting. They want to send gifts to their clients — so they commandeer the gifts sent to their secretaries and staff, and regift them.
I think this firm missed the “spirit” part of this holiday season….
This actually happened last Wednesday — but, due to the less-than-exciting nature of the news, we doubt anyone has been prejudiced by our delay in reporting it. The law firm of Dewey & LeBoeuf announced associate and counsel bonuses, on the Sullivan & Cromwell scale (i.e., the Cravath scale, but topping out at $42,500 instead of $37,500).
Even if not surprising, it is nice that Dewey is matching market. As you may recall, Dewey made our list of the top ten most generous law firms — i.e., ten firms that generally match Cravath-level bonuses, despite having significantly lower profits per partner than Cravath. Partners at these firms take a financial hit to keep their associates happy.
Just like last year, there are a few footnotes to the Dewey bonus news that merit comment. And there’s some positive news for top performers, too….
Schulte Roth & Zabel really came up with a creative way to make this terrible bonus season even worse for SRZ associates.
Schulte is matching the Cravath scale, but not all at once. Half of the bonus is being paid now, the other half in March. It’s Schulte’s way of issuing a retention bonus without actually spending any extra money.
It also sets Schulte up nicely to avoid paying spring bonuses next year. Not that Schulte management really cares what people think about them. The firm didn’t pay spring bonuses last year. Even though the firm is making people whole with a “spring bonus” payment to those who should have gotten one last spring, the money is still tied to hitting 2011 hours targets.
It’s really one of the most disingenuous bonus memos we’ve seen. While technically the firm is matching Cravath, it’s doing it in a nickle-and-dime way that makes it pretty clear the Schulte partnership begrudges every last cent they have to pay out in bonuses.
If the associates don’t like it, they know where the door is….
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.
Things have changed recently in Korea – a few of our US and UK client firms are looking, very selectively, for a lateral US associate hire. Until just recently, there was not much hiring like this going on in Korea, since US and UK firms started opening offices there. We have already placed two US associates in Korea in the past month at top firms. Most of the hiring partners we work with in Korea do not actively work with other recruiters.
If you are a Korean fluent US associate in London, New York or another major US market, 2nd to 6th year, at a top 20 firm, with cap markets or M&A focus (or mix), or project finance background, and you are interested in lateraling to Korea to a top US or UK firm, please feel free to reach out to us at email@example.com or firstname.lastname@example.org. Our head of Asia, Evan Jowers, was just in Korea recently, and Evan and Robert Kinney will be in Korea in a few weeks. We are in the process of helping several firms open new offices in Korea (a number of which are interviewing our partner level candidates) and also helping existing offices there fill openings.
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