Law Firm Fakes Out Its Associates Over Pay Raises
Are you trying to troll these associates?
Heads up to law firms around the country: associates are really on pins and needles regarding compensation. They’re refreshing Above the Law hoping to see some “peer” firm has increased associate compensation to the new Cravath scale and hoping that’s enough to convince the executive committee that they too deserve raises. Even when associates are pretty sure their firm won’t do a full match to MoneyLaw levels, they are still pretty hopeful that there’ll be enough pressure to eke out some sort of a raise.
Keep that in mind when planning events this summer, particularly if they involve celebratory drinks and an announcement. It is only natural that associates will jump to the conclusion you’re about to announce pay raises, which, in fairness, is less of a jump than a small little hop given the rapidly changing market.
Take what happened at Vedder Price yesterday. As a tipster reports, the firm recently moved to the old, $160K scale, but profits per partner are healthy and associates figured, in order to avoid a mass exodus, the firm would be providing some kind of raise. And then they were summoned to the conference room for an announcement and a champagne toast:
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The associates (it is a small office) huddled outside of the conference room and we were all nearly certain that we would get the news that we were waiting for over the last week (a pay raise as a result of the new Cravath salary scale). Maybe not completely to the new Cravath market salary, but at least a $20k raise for each class year. Our associates have all been reading about how other firms have been notifying their associates and then celebrating with champagne. And with the email from the firm’s CEO sent to us about the announcement and champagne only one week after the Cravath bomb was dropped, what else could it be?
Oh, you poor, hopeful souls. No raise for you, at least not yet:
Much to all of the associates’ complete surprise, the champagne toast and great news had nothing to do with the compensation of its associates. It was announced that the firm voted for three of its non-voting shareholders to be let into the club as full voting shareholders. Not only has management been radio silent regarding its intentions for associate compensation, but the firm, today, just made sure that its associates shared in the “joy” of the occasion of making the pockets of already well-paid shareholders even fatter. What do you say to that? “Thanks Vedder! You really just have no idea that at least one third of your associates (firm-wide) are seriously considering jumping ship. But we sure are glad that those non-voting shareholders are now full equity voting members with greater compensation potential.” The faces of the associates during the “announcement” looked like their pet puppy just died in front of their eyes. Bottoms up…
Cheers to more wealthy people that are not the associates?!?!? Talk about tone deaf.
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Let this be a note to all firms: don’t tease your associates with a champagne toast. Save the bubbly till after you give them a raise. Unless you’re trying to troll them. In that case, break out the Dom and laugh at the sad associates — just be sure to film their reactions and send it to ATL.
We are covering associate raises 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.
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).