Game, Set, Match -- In This Biglaw Firm's 'Major' Offices
This major firm has a famous sports law practice -- and market-level salaries now, too.
The firm of Proskauer Rose has a renowned sports-law practice, with clients like Major League Baseball, the NBA, and the NFL. And it looks like the firm’s associates just scored a touchdown — in the form of a pay raise to the Cravath scale, starting at $180K.
There’s a small caveat. Unlike the firms that are matching in all U.S. offices, Proskauer is matching in most of its U.S. offices: Boston, Chicago, Los Angeles, New York, and Washington, D.C. Summer and incoming associates in these markets are also getting raises, per the memo (posted on the next page).
These are all of the firm’s “major” offices, as one Proskauer source put it. The offices not included in the raise — Boca Raton, New Orleans, and Newark — are smaller in size, and they weren’t on the old $160K scale to begin with.
Luxury, Lies, And A $10 Million Embezzlement
The memo does not speak to Proskauer’s international offices. As for more-senior classes, “the base salaries in all markets for classes beyond 2008, and the base salaries for those on special arrangements, will be communicated individually.”
Congratulations, Proskauer associates; this is a real home run!
UPDATE (6:05 p.m.): Or not. Here’s a dissenting voice:
Proskauer has treated its Boca, Newark, and NoLa associates terribly with regards to comp for years, but this is beyond the pale. People are furious.
[I]t’s always been said that we follow the market. They always argued that they paid top of the market for regional offices. I don’t think that can be fairly said now.
Winston with offices in Charlotte, Princeton, and a tiny one in Newark raised. So did Cooley in Colorado and Seattle. Both are less profitable than Proskauer. Both are raising across the board.
Top-paid Proskauer associates in these offices now make the same or less than the summers in big offices. It is particularly galling as we are expected to work just as long and hard as everyone else.
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Will Proskauer do something for these other offices?
UPDATE (7:19 p.m.): Here’s another angry associate:
That is not one dissenting voice from the remote offices. That is the voice of many in the remote offices. Check Vault for salary structures in the remote offices ($145K Newark, $135K Boca Raton, and $110K New Orleans).
Per Vault, the salary scales in these offices top out at $180K in Newark and Boca and $145K in New Orleans. So first-year associates in the “major” markets now make as much as or more than seventh-year associates in the “remote” offices. Ouch.
(Random aside, a story for another day: why is Proskauer in these markets if it can’t afford to pay its associates at higher rates? I don’t mean this in the sense of “why is Proskauer lagging,” because I suspect that its pay in these markets is competitive for these markets. I mean this in the sense of “why is a high-powered firm like Proskauer operating in these lower-margin markets,” when the tendency (or at least aspiration) in Biglaw is to move toward more lucrative markets and more premium practices, shedding offices and dumping practice groups that are less high-margin.
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Luxury, Lies, And A $10 Million Embezzlement
If the associates in the “remote” offices are working on matters and getting billed out at rates that are comparable to their counterparts in the “major” offices, then it seems to me they should be paid the same. But if they are not — if they are considerably less profitable — then why are they still a part of Proskauer? If these offices are diluting profitability, why wouldn’t Proskauer try to spin them off?)
UPDATE (10:58 p.m.): A third upset Proskauer source complains about how the communication was handled:
The Executive Committee didn’t even give the associates in Newark, New Orleans, and Boca Raton the courtesy of including us on the email distributing the memo. They let us find out secondhand that we would not be receiving any sort of increase. We weren’t given any sort of explanation regarding the decision or even an acknowledgment that we do, in fact, work for the same firm and that our work for that firm is appreciated. Which is pretty rich considering the closing line of the memo.
That last line: “The Firm continues to thrive in all of our markets and we are deeply grateful for your enthusiastic and dedicated efforts on behalf of our clients.”
UPDATE (6/10/2016, 10:50 a.m.): Here’s a bit of insight into Proskauer’s “remote” offices and how they fit into the rest of the firm, from an alum of the firm:
Proskauer is in New Orleans solely because of ERISA litigation guru Howard Shapiro. If he ever ceases to be a Proskauer partner for any reason, that office will close (Howard is a pleasure to work with).
Boca covers personal-planning client retirees (like the Florida offices of many other firms in that space). There is a bit of Health Care and L&E [labor and employment] as well as an outlier local real estate practice. I think they feel they need to stay in that market for their snowbird NYC clients.
Newark, it is no secret, exists to provide NYC-area L&E clients with lower-rate billing lawyers. This allows the firm to staff lower-profile wage and hour and discrimination cases for institutional clients at attractive rates.
Despite some really nice people in these offices, they were never seen (in my tenure) as having the same stature as NY, Boston, DC, or LA. Chicago is not a heavy-hitter office either, but the local market probably required the raise there too. But they have always pushed a “one firm” mindset for morale purposes, and this seems like an odd misstep.
UPDATE (6/10/2016, 2:40 p.m.): Still more about the Prosakauer offices issue, referring to the office in Newark, New Jersey:
[T]he “three-fifths compromise” that the firm has implemented for base salary (and even a smaller proportion) for bonuses has had a dramatic effect on the office’s ability to retain talent. Over the last few years, the number of associates in that office has likely decreased or been stagnant, with juniors and midlevels lateraling to other firms for a six-figure salary bump, or more senior associates giving up on partner track altogether and going in-house. I’ve heard that there hasn’t been an associate to partner promotion in the office [for a long time], which makes their decisions to ultimately jump ship all the more rational.
The idea that they are staffing lower-billing clients is a bit of a red herring. Those matters are staffed by attorneys from all offices, including those paying market, and those that do not. On the flip side, offices like Newark also staff the higher-billing matters, and on a given day, you’ll see half of the associates working in the NYC office.
If you hear of compensation news, at Proskauer or elsewhere, please drop us a line — text (646-820-8477) or email (subject line: “[Firm Name] Matches Cravath”). 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.
(Flip to the next page to read the Proskauer Rose memo in full.)
David Lat is the founder and managing editor of Above the Law and the author of Supreme Ambitions: A Novel. You can connect with David on Twitter (@DavidLat), LinkedIn, and Facebook, and you can reach him by email at [email protected].
