One Firm Decides To Pump The Brakes On This Whole 'Raise' Thing

Firm gives the associates some unpleasant news.

bonus money low bonuses poor empty pockets sad upset lawyer businessmanRemember back when Covington issued a Hail Mary memo to stanch the flood of firms flinging Cravath raises to every lawyer around the country? And then went ahead and jacked up everyone’s salaries to the Cravath scale anyway? Ah, good times.

Well, another firm is launching a preemptive strike against increasing associate salaries, and this one reads less like a veiled plea to the market and more like a stern lecture to the associates that “Santa’s had it rough and might be skipping our house this year.”

Seyfarth Shaw just told its associates that they are fully aware of the salary frenzy, but cautioned that:

While certain firms are often reactive to news like this, the consequences that follow can take more time — billing rate increases, higher productivity requirements, other cost-cutting measures.

Go ahead and read the whole memo here.

That’s a not-so-subtle threat that we COULD give you more money but we’d probably have to fire half of you and make the rest work harder. No one wants that, do they?

Remember, this isn’t one of those “hockey pads Batmen” to borrow my colleague’s brilliant analogy. Seyfarth is firmly ensconced in the Am Law 100, with PPP over $1 million, and a healthy ratio of 2.6 attorneys for every equity partner. It’s not like the firm has to give the full raise to all of their U.S. offices — indeed they probably shouldn’t — but this is hardly an instance that’ll break the bank like it might for some firms who have already matched. It feels like Seyfarth is using the fact that some firms are making questionable decisions as an excuse to skimp.

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Still, Seyfarth doesn’t completely rule out a raise, they just preach caution:

This note is just to let you know that we are monitoring the information about which firms are doing what and where geographically, and that we will continue to evaluate what steps to take, if any, that will be appropriate for us, for our culture and for our clients.

That “if any” is ominous.

Seyfarth’s reticence is, of course, in line with a recent article by Seyfarth’s Chair Emeritus Stephen Poor predicting calamity in the market — or at least for traditional law firms — from rushing to adopt this pay hike. Think of it as David Lat’s warning on steroids.

We’re entering new and uncharted waters thanks to Cravath. Look, firms are right not to issue a kneejerk response to these raises. But for a firm just a smidgen out of the Am Law 50 (Number 58 last year) and one of the top 100 grossing firms in the world, this seems an abundance of caution.

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Here’s hoping Seyfarth pulls a Covington and responds with some sort of salary increase soon.

Full memo on the next page

Remember, when your firm matches, please text us (646-820-8477) or email us (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.

The Cravath Pay Raise: Challenges and Opportunities for Law Firms (Perspective) [Bloomberg / Big Law Business]

Earlier: Dear Biglaw Firms, Please Don’t Raise Salaries
No, Your Office Doesn’t Deserve The ‘NY To 180’ Raise
Biglaw Salary Hike: Not All Offices Are Created Equal
Biglaw Firm Changes Course On Associate Compensation


Joe Patrice is an editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news.


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