Biglaw

If Biglaw Firms Don't Think Recruiters Will Go After Them For Not Raising Salaries, They're Wrong. This Email Proves It.

Firms can't have it all. If they don't pay top-notch salaries, they'll not have top-notch talent.

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Some firms don’t seem to understand that recruitment and retention is a zero-sum game. If they want the talent pool to consistently compete for the top-tier clients, they need to either pay associates top-tier salaries or find some other credible advantage — like being an 1800 hour/year firm and meaning it, or being in a cheaper cost of living market — that associates are willing to trade a few tens of thousands of dollars for. What a firm can’t do is expect associates to work at a top-tier level while lagging the market in compensation.

And when they do that, the invisible hand of capitalism — in the avatar of legal recruiters — will sweep in and efficiently allocate the lagging firm’s attorneys to other firms that are paying top dollar.

Partners should realize that as soon as they send that compensation email without a full raise, there will be consequences. That’s not necessarily a bad thing… but they just need to understand that their turnover is about to go up. Because legal recruiters are going to start sending associates emails like this one that a tipster forwarded from an RPN Executive Search recruiter:

As it has been widely reported, Greenberg’s compensation structure is not consistently keeping up with the market increases. If you did not get your raise and summer bonus, you are not in a profit center or not at the top list for a promotion, or both. What you are getting paid is one of the most transparent signs how the firm values your position and progression. The market is so robust that we are even skipping the typical August lull and placing attorneys across practice areas. Many of our clients that are paying the new Cravath salaries are making associates whole on the bonus and not pro-rating it.

The biggest newsflash in this email is the revelation that some higher-paying firms aren’t going to wait until the end of the year to get access to attorneys with wandering eyes. The lateral market used to be more cyclical, with most attorneys unwilling to leave their home firm until securing their full annual bonus. Leaving earlier was just leaving money on the table. It’s the reason a number of firms moved to distributing bonuses in February or March of the following year — to keep their associates behind the lateral market. It’s an anachronistic trick these days, with a year-round lateral calendar and target firms offering to cover the difference on bonuses.

While this email focuses on Greenberg, all the firms who’ve held out on their associates should expect something similar — nay, many somethings similar — lighting up their associates’ emails, texts, and phones for the next several weeks and months. In a couple of years, we’ll see the results of The Great Sorting as talent flows to its proper home.

Will being a holdout firm pay off? It might. Or it might not.

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HeadshotJoe 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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