Biglaw

Another Firm Announces It Will Only Be Hiring Cheap And Desperate Associates This Fall

If you pay below market salaries, you're going to get below market talent.

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For about a week now, Greenberg Traurig has been out on an island, standing alone as an allegedly “Biglaw” firm publicly refusing to give its associates a cost-of-living increase.

But Greenberg Traurig’s managing partner gave an interview resisting raises before Cravath joined the salary wars.

Now, we have somebody coming out after Cravath, and most other Biglaw firms, are getting into the salary wars game. Reed Smith’s global head of personnel, Casey Ryan, told Am Law this morning that the firm has “has no current plans to increase associate starting salaries in any location.”

Ryan said it was in the best interests of its clients.

Reed Smith knows its internal financials and industry standing better than I do. If the firm is telling us that it’s not good enough to raise fees without its clients looking for better counsel elsewhere, who are we to argue?

Clients are looking for different things, some are looking for the best lawyers they can find, others are looking for the cheapest. Reed Smith has to keep its own counsel about how to position itself in the market.

But it is worth pointing out that raising fees is not required to raise associate salaries. I know this is going to sound crazy, but partners could bank less profit in order to keep their employees on par with market salary. That is also a thing that can be done.

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Why would Reed Smith even consider such a move? Well, it’s all about recruiting the next generation of Reed Smith lawyers. On-campus interviewing starts soon. There are now a number of firms that students can go to that pay more money than Reed Smith (or Greenberg Traurig). Sure, if you have crap grades and no options, Reed Smith is still offering you a “Biglaw” salary. But if you have options, why would you still go to Reed Smith?

Even if they eventually raise salaries later, you’ll know they’re doing it reluctantly. You’ll know that they’ll always be laggards in market compensation.

And you know that you’ll be treated shabbily. Reed Smith announced this move to press outlets BEFORE announcing it to associates. The associates we spoke with found out from Legal Week.

Most of a law firm’s dirty laundry can be hidden from new talent during the recruiting phase. But money is an objective indication of worth. Reed Smith is airing its drawers on a clothesline for everybody to see, right before recruiting.

But hey, “clients” right? I’m sure clients will enjoy saving the buck, and probably not even notice that Reed Smith is now going to have to recruit from the desperate classes.

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Reed Smith, Citing ‘Interests of Clients,’ Won’t Increase Associate Salaries [Am Law]

Elie Mystal is the Executive Editor of Above the Law and the Legal Editor for More Perfect. He can be reached @ElieNYC on Twitter, or at elie@abovethelaw.com. He will resist.

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