On that note, we’re thinking of launching a few new columns here at Above the Law. If you’re interested in writing for us, please read on for details.
If you think that making partner is like winning the Biglaw race, you haven’t actually been paying attention to what’s been happening to partners over the past few years. Sure, Biglaw partnerships overall are enjoying higher profits now than they were during the darkest days of the recession (while associate salaries remain stagnant, of course). But average “profits per partner” numbers can be misleading.
Steven Harper, the former Kirkland & Ellis partner turned law professor, writes that the income gap between the top earning partners and everybody else is “exploding.” It’s never been more lucrative to have a nice book of business.
And to keep it for yourself….
- American Bar Association / ABA, Associate Bonus Watch 2011, Bloomberg, Bonuses, Job Searches, Law Schools, Partner Issues, Partner Profits, Unemployment, Videos, YouTube
At the start of this new year, what is the outlook like for legal employment? There’s certainly a fair amount of bad news out there, particularly for recent law school graduates.
But what about for denizens of Biglaw, the lawyers fortunate (or unfortunate) enough to work at the nation’s largest law firms? What does 2012 hold for them?
Earlier this month, my colleague Elie made some predictions for the legal profession. I will follow in his footsteps and venture some prophecies of my own for the year….
- Akin Gump, Associate Bonus Watch 2011, Associate Salaries, Bonuses, Dewey & LeBoeuf, Ho-Love, Money, Partner Profits
This morning’s news that Boies Schiller is making a mockery of the Cravath bonus scale simply reinforces the prevailing view (pace David Lat) around here that the 2011 Cravath bonus scale is fundamentally unfair.
Agreeing on this point is former Kirkland & Ellis partner Steven Harper (whose apparent pro-associate stance may make him a sort of Biglaw apostate). As Harper points out, “equity partner profit trees have resumed their growth to the sky. As the economy struggled, Cravath’s average partner profits increased to $2.7 million in 2009 and to $3.17 million in 2010 … That’s not ‘treading water.’ It’s returning to 2007 profit levels — the height of ‘amazing’ boom years that most observers had declared gone forever. Watch for 2011 profits to be even higher.”
And yet associate bonuses remain stagnant at 2009 levels. Furthermore, as ATL commenter “The Cravath Cut” is so fond of noting, when viewed as a percentage of profits, bonuses appear especially measly, at least from the associate p.o.v. (The current $7,500 market rate for first-years is just 0.23% of Cravath’s profits per partner. Back in 2007, first-year bonuses equalled 1.36%.) Despite these numbers, if history has taught us anything, it is that
you can kill anyone Biglaw’s rank and file will follow Cravath’s lead.
Cravath is among the most profitable firms in the world. We thought it would be interesting to see what the implications of matching Cravath are for those firms with much lower profit margins. Which firms’ partners willingly take the biggest hit by keeping up? Are these firms arguably more “generous”? After the jump, check out those firms that pay the largest percentage of PPP in bonuses.
There are a lot of unhappy lawyers. We all know that. Part of their discontent is due to the fact that many young people go to law school who may not want to be lawyers, or do not take the time during law school to figure out what type of practice best fits their personality and goals. It was for this reason that I was so excited to learn about Steven Harper’s class for pre-law students. Getting to potential law students before they take on an obscene amount of debt is one way to prevent accidental lawyers.
But what about those individuals who actually want to be lawyers, but due to certain biases are not able to pursue their dreams? The answer is the same: get to them in college….
We are almost three months into my one-woman quest to convince the world (or at least ATL readers) that bigger is not always better. Isn’t that why Jamie Oliver is moonlighting as a lunch lady? Unfortunately, some people still are not convinced. So I called in an expert, Steven Harper (previously featured here).
Harper, a Kirkland & Ellis partner turned novelist, has been studying and writing about attorney unhappiness and Biglaw for some time. He also teaches a class to undergraduates at Northwestern University entitled “American Lawyers – Demystifying the Profession.” The class, which is now in its fourth year, offers undergrads “ten weeks of reality therapy” about what it means to be a lawyer. Although most of the students end up going on to law school, at least they are better informed.
What wisdom does Harper impart to his young charges?
As discussed previously, Steven Harper threw down the gauntlet when it comes to top law schools focusing all their recruiting efforts on Biglaw placements. And the woman who reads my tea leaves said that small law firms are becoming the new black. But you do not need to take their word for it. I have it from on high (i.e., from someone at Harvard Law School) that small law firms might merit the attention of the top of the U.S. News law school hierarchy.
I decided to test my working hypothesis — that graduates from top schools are considering small firms for their post-graduate employment — on the head of the Office of Career Services at HLS, Assistant Dean Mark Weber….
Like many unhappy lawyers, I find Cee Lo Green’s F**k You — which has been picked up by radio stations in a more family-friendly version, Forget You — to be a personal theme song (a la Ally McBeal). Indeed, I often fantasize that I am dancing around my office in an inappropriately short skirt-suit, belting out the chorus to many of my co-workers.
And I am not alone in appreciating the cathartic properties of this special song. We all saw those crazy kids at GWU Law School, in their feather-boa-filled tirade against law school gunners.
Steven Harper, a retired Kirkland & Ellis partner who now teaches at Northwestern Law (and blogs), is the latest to invoke Mr. Lo Green. He seems to be giving the F**k You to Biglaw — and maybe a little bit to former NU Law Dean David Van Zandt, too….
* Lawsuit lending, i.e., investing in lawsuits, is a booming business — but are plaintiffs getting screwed (again)? [New York Times]
* Elsewhere in SCOTUS news, Justice Breyer gets a shout-out in the title of a new study: “‘People Did Sometimes Stick Things in my Underwear’: The Function of Laughter at the U.S. Supreme Court.” [Washington Post]
* The new year is off to a great start for M&A lawyers. [Am Law Daily]
* A second ex-Ropes & Gray associate, Arthur Cutillo, pleaded guilty on Friday to charges arising out of the Galleon Group insider trading scandal. (Brien Santarlas pleaded guilty back in December 2009.) [Bloomberg via ABA Journal]
* If Cutillo and Santerlas go to prison, what can they expect? Check out Nathan Koppel’s interesting interview with former high-flying plaintiffs’ lawyer Bill Lerach, which touches on Lerach’s time in the big house (including a story about how he got the prison TV switched back to CNBC). [WSJ Law Blog]
* Steven Harper, the Kirkland & Ellis partner turned blogger, writes: “Are law schools deceiving prospective students into incurring huge debt for degrees that aren’t worth it? Of course they are.” [The Belly of the Beast]