What Firms Miss The 'MoneyLaw' Cut?
Now comes everyone's favorite part of the salary wars: the airing of grievances.
UPDATE: Please check out the bottom of this post for firms mentioned that have since raised associate salaries.
Biglaw. The term is used to denote the best, most prestigious part of the legal profession. But we are in the midst of a seismic shift in the market; the new Cravath scale has upped the stakes for what is really considered an elite law firm. And quite a few Biglaw birdies have shared with us that not everyone is going to be able to make the leap.
So the question must be asked — what is better than Biglaw?
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Here at Above the Law, we like the term “MoneyLaw” to refer to the top tier of compensation leaders. As boutiques have repeatedly proven, being able to run with the big kids isn’t just a matter of size. So a term that captures the generosity of the law firm, regardless of size, is key. Kudos to all the firms that have, at long last, cast off the pallor of the Great Recession of 2008 and actually begun to share the wealth with the associates that make the firm tick.
Now comes everyone’s favorite part of the salary wars: the airing of grievances. Yes, yes, I know it hasn’t been quite a week since Cravath announced the new scale, but the rumors had been swirling for a while, and the ability to respond quickly to market conditions is key. So, who is missing from the MoneyLaw list?
Where are the Silicon Valley Biglaw leaders? Cooley made the move, but what about Wilson Sonsini Goodrich & Rosati or Fenwick & West? Even Valley boutiques are getting in on the action, so the time is really ripe to make a move.
And we haven’t heard much from firms based in or originally founded in Los Angeles, even though national firms’ branch offices in L.A. have matched. So what about Latham & Watkins? Folks there are really annoyed they haven’t seen the money yet:
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I truly hope you all come out with an article that embarrasses Latham for being so late in the game to match. They’ll blame it on global committee issues, but there’s absolutely no reason we haven’t matched when we were number 1 in revenue two years running. Many associates are just plain annoyed and embarrassed that we have matched.
Indeed, even outside the Valley, lots of California firms (like Gibson Dunn, Paul Hastings, Orrick, Morrison Foerster, and O’Melveny & Myers) aren’t on board with the new salary scale.
How come no word from California powerhouses like Gibson, Latham, PH, Orrick, MoFo, Wilson, OMM, etc.? Probably because an article needs to be posted to put some pressure on them…Cooley is making them all look second-rate.
Then there is the question of Washington firms. As we noted yesterday, Covington does not seem to think its D.C. associates are worthy of a salary bump — as one tipster referred to it, “Covington’s being a jerk.” The powers that be from Covington tried to paint the picture of D.C. as a market with naturally lower comp, but not everyone from Biglaw agrees. The D.C. branch offices of Paul Weiss, Milbank, Kirkland, Davis Polk, Quinn, Weil, Freshfields, Willkie and more have all matched the new scale. Now the question remains, what will other D.C. firms do? Arnold & Porter, WilmerHale, and Hogan Lovells haven’t announced what they will be doing. Then you have to wonder about the highly prestigious Williams & Connolly, which has always paid base salaries about market, but with no bonuses. With the new scale and the expected bonuses, midlevel associates and W&C may find themselves making less than market.
UPDATE 3:09pm: More rumors swirling for a DC firm, and it doesn’t sound like it’s good news:
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Unofficial word at Arnold & Porter is that a salary increase is “not a definite no”. Given the row over sub-market bonuses as of late, which had a lot of valuable associates almost leaving the firm, a “no” here would be pretty devastating to associate retention and recruitment.
The overwhelming trend has been for national Biglaw firms moving over to the new scale to do it for all U.S. offices. This puts pressure on regional firms to match. Like how Houston-based Vinson & Elkins just announced pay raises for its associates. But will other Texas firms, like Baker Botts, follow suit?
Chicago-based firms have also made some moves, but what about Mayer Brown and Sidley Austin? The Sidley associates are hopeful they’ll see a raise, but aren’t counting on it:
Associates at Sidley are following the raises very closely, hoping Sidley steps up. We’re thrilled Kirkland and Winston matched, since those are Sidley’s top competitors as Chicago-based firms. Sidley is usually pretty late to the party (someone called Sidley “penny-wise and pound-foolish”), so hopefully they don’t make the same mistake they did with bonuses in 2014 (where they were way under market). The Executive Committee is meeting this afternoon in NY, so here’s to hoping…
And what about Dentons? It is now the largest firm in the world, and is aggressively advertising itself as an innovative market leader. But maybe not in the realm of compensation.
Other Biglaw firms that haven’t crossed to the land of MoneyLaw include Alston & Bird, Jones Day, Akin Gump, DLA Piper, Proskauer Rose, Hunton & Williams, and King & Spalding. Are there any other firms we’ve missed? Has your firm tipped its hat one way or another?
UPDATE 2:47pm: We told you we loved our tipsters! Mere minutes after this post went up we started to hear from more discontented associates, desperate to know if they’ll be getting raises (we’ll be updating this section as more info comes in):
Total radio silence from Greenberg Traurig NY. All the associates are waiting for Fried Frank, Kramer Levin, or DLA Piper to match for us to match.
Just read your “Missing Firms” post. For another Chicago based firm… Jenner & Block has not indicated one way or another re salary increase after getting on board with bonuses in the last cycle.
Ropes hasn’t matched yet–in fact, none of the big three Boston firms have moved (ropes, Wilmerhale, Goodwin Procter). Some satellite offices in Boston have already gone, though (Cooley, Weil, Skadden) and Ropes has to be under pressure from the NYC firms since it competes directly for talent
with them in pretty much every practice area.
Dechert is now one of the only firms in the top 20 PPP rankings that hasn’t at least matched the new Cravath scale. The general attitude here is that the firm should be embarrassed when our competitors with much lower PPP (e.g., Winston) match in all U.S. offices. Folks are already talking about jumping ship if we don’t pony up within the next week.
Pillsbury leadership has indicated that it is monitoring the situation in NY as well as all other markets where it has offices, but that the timing of any announcement is uncertain at the moment. However, after experiencing a massive defection of partners and associates to Winston Strawn last year, I hope leadership is feeling enough pressure from that match to take the plunge. Of course, more Cali firm matches would help too. It bears mentioning that the vast majority of associates at Pillsbury, about 65 % do not get bonuses. If base pay were not to be raised, total compensation would be way below market. Recruitment and retention would definitely be affected. I know I’m ready to leave if there is no match and have heard similarly from others.
Plus there have been questions about White & Case, Baker & McKenzie, Shearman & Sterling, Cadwalader and Schulte Roth.
UPDATE 4:03pm: Woohoo! Someone we called out in this piece has now jacked up their compensation scale. Congrats Latham, welcome to MoneyLaw.
UPDATE 4:40pm: Another firm is making it rain! Sidley matches the full MoneyLaw compensation scale.
UPDATE 5:24pm: Proskauer has made the cut, raising associate salaries to the new compensation grid.
UPDATE 5:49pm: West coast is making moves! Well done O’Melveny!
UPDATE 8:33pm: Fenwick matches!
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.
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).
