We know that not every law firm in the world — not even those we loosely term Biglaw — will be able to make the move to the newly announced pay scale. And that is certainly understandable; under the new compensation grid, every associate is getting a raise between $20,000 and $35,000 — especially for firms with a big headcount, that money adds up quickly. And certainly no one wants a repeat of the last Biglaw compensation cycle, where firms overextended themselves to keep up with the market and then had to lay off associates to keep the lights on.
But what is the real cost for law firms of not moving to the market salary? Well, they run the very real risk of losing some of their best talent to firms willing to play ball. One tipster noted:
[I’m a] senior associate who lateraled … from a … firm (now on the $180k scale)… I have already been called by my former firm … about returning and by recruiters about lateraling to a “market rate firm.” I know there are a few more senior and mid-level associates in the same boat. Unless [law firms] move[] up quickly, retaining quality and high-billing mid-level and senior associates will be rough.
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And that, in a nutshell, is why we have so many firms from across the country scrambling to match the MoneyLaw scale. They don’t want to see their best and brightest head out the door. And we’ve repeatedly heard from associates in different cities that they will have to seriously consider their options if their firms won’t match.
If you have to bill 2,400 hours, you at least want to know you’re making top dollar for your efforts.
We are covering this story as market conditions develop, so please drop us a line — text (646-820-8477) or email (subject line: “[Firm Name] Matches Cravath”) — when you know of another firm making a compensation move. Please include the memo if available. You can take a photo of the memo and send it via text or email if you don’t want to forward the original PDF or Word file. All sources are kept strictly confidential.
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Kathryn Rubino is an editor at Above the Law. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).