Partner Compensation

* Want to know another thing that’s causing Biglaw to implode? All of these huge partner compensation spreads we’ve told you about are creating a “star culture,” and even law firm partners are capable of jealousy. [Am Law Daily]

* It looks like Charleston School of Law is the latest institution of legal education to be enticed and swallowed up into the for-profit InfiLaw System. Will a sale be next? We’ll have more info on these developments later today. [Post and Courier]

* Sorry, but in Pennsylvania, you cannot represent clients on a quid pro blow basis. You could get suspended for a year, like this guy. Wonder what his retainer agreement looked like. [Legal Intelligencer]

* The sole minority juror from the George Zimmerman trial — the one who was liable to allow the jury to be hung — is now telling the world she thought the acquitted “got away with murder.” [ABC News]

* Lawyers for accused kidnapper Ariel Castro are considering a deal offered by prosecutors that takes the death penalty off the table. He might be able to enjoy some ribs in prison if he’s there for life. [CNN]

* Neiman Marcus settled a case with a divorcée whose ex-husband was allegedly cheating on her with a saleswoman. You really can return anything, up to $1.4 million in value! [FDLuxe / Dallas Morning News]

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….

double red triangle arrows Continue reading “The Aspiring Lateral: Money Talks”

One of the more amusing law firm nicknames belongs to Weil Gotshal & Manges. As we noted a few years ago, some refer to the firm as “We’ll Getcha & Mangle Ya.”

Alas, the nickname is less funny in the wake of yesterday’s big layoff news. The firm announced it will be cutting 60 associates and 110 staffers from the payroll. Despite the generous six-month severance for associates, some probably feel like their legal careers have been mangled. The firm also plans to reduce the compensation of about 10 percent of its partners (roughly 30 out of 300, some income and some equity partners).

Let’s take a closer look at the layoffs and try to make sense of them….

double red triangle arrows Continue reading “The Weil Winnowing: A Closer Look At The Layoffs”

Since the Supreme Court’s ruling in Fisher, the major affirmative action case, turned out to be something of a dud, the big legal story of the day is the news out of Weil Gotshal. The firm is conducting large layoffs of both attorneys and staff, as well as reducing partner pay.

Thus far, many of our recent layoff stories have involved staff layoffs, especially secretarial layoffs; relatively small numbers of affected individuals; and firms not in the tippy-top tier of Biglaw. So that’s what makes the Weil news so notable — and so frightening.

Weil is an elite firm, in both profits and prestige. The cuts it just announced affect lawyers, not just staff, and reach into the triple digits….

double red triangle arrows Continue reading “Nationwide Layoff Watch: Major Cuts Come To Weil Gotshal”

We have partner profits on the brain here at Above the Law. Earlier today, we wrote about a law firm that instituted a 20 percent holdback on partner pay — a move that was met with anger by some.

In that story, we noted the “continued expansion in the gap in power and pay between what we’d call ‘super-partners’ — partners in firm management and major rainmakers, who are often one and the same — and rank-and-file partners.” You can see this yawning chasm in the disparities in partner pay that exist within the same firm. As partner turned pundit Steven Harper has argued, partners aren’t true “partners” when they are paid and treated so differently.

New information from the American Lawyer shows how extreme some of these gaps between partners have gotten….

double red triangle arrows Continue reading “Which Firms Have The Biggest Gaps Between Their Highest- and Lowest-Paid Partners?”

One firm just started pocketing 20 percent of partner pay.

Many lessons can be drawn from the collapse of Dewey & LeBoeuf. We’ve learned, for example, that it’s dangerous to have a law firm name that’s highly susceptible to puns. (Dewey know why that is? Howrey going to find out? Heller if I know.)

Another lesson: avoid excessive dependence upon bank financing. When a firm starts to spiral downwards, that spiraling can be accelerated by a bank calling a loan, not renewing a credit facility, or otherwise taking steps to protect itself that, while reasonable for the bank, can be damaging to the firm.

Firms have responded by turning to their partners for more financing. An increasing number of firms are issuing capital calls to partners or requiring high capital contributions.

So perhaps we shouldn’t be surprised to learn that one law firm has instituted a new policy of withholding 20 percent of partner pay….

double red triangle arrows Continue reading “Not A Popular Policy: Withholding 20 Percent of Partner Pay”

It’s been a while since we last spoke of firms that are best suited for female lawyers, and it seems like every few months, a new “best of” list pops up to remind us that women usually get the short end of the stick if they’ve chosen a Biglaw career. You see, little lists like this don’t exist for men, because they don’t need to. No one is curious about which firms have the most men in leadership roles. No one is wondering about which firms have the greatest number of male equity partners. Biglaw lives to serve men, and in most cases, they are the ones claiming all of the power, the prestige, and most importantly, the money, while in most cases, women are left in the dust.

Sure, we love finding out which firms have been ranked as the most family friendly, and at which firms a woman might be able to land a top management role, but what we really want to know is which firms are capable of offering perks like these along with booming compensation.

Luckily, thanks to the Women in Law Empowerment Forum (WILEF), now we’ll be able to find out. Want to see which Biglaw firms are offering female attorneys the chance to perform on par with their male colleagues in terms of both power and pay? Let’s check out the list…

double red triangle arrows Continue reading “Which Firms Offer Women the Most Power and Highest Pay?”

Biglaw partners may not be having coke-fueled orgies on piles of cash any more, but partners are still doing well compared to mere mortals.

In fact, the biggest rainmakers are doing really really well compared to many of their colleagues. According to Steven Harper, the Northwestern professor and author of The Lawyer Bubble: A Profession in Crisis (affiliate link), the highest-paid Biglaw partners used to make three times more than their run-of-the-mill colleagues. Today, rainmakers can pull down ten times more.

And this is not good for the legal industry…

double red triangle arrows Continue reading “The ‘Biglaw Partner Compensation’ Is Too Damn High”

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?

double red triangle arrows Continue reading “A Biglaw Firm Plays With Its Partner Pay Scale”

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?

double red triangle arrows Continue reading “Buying In: An Interview with an In-House Insider (Part 4)”

Page 2 of 41234