The July 1 deadline most firms set for raises has slipped by, and with it, a lot of the news. Firms that didn’t act before the deadline are enjoying the holiday lull and keeping their heads down. And that’s not sitting well with a lot of associates, who continue to write in to express their frustrations with AWOL salary announcements, shortchanged offices, and mistreated seniors.
These are the forgotten vintage of the Grapes of Cravath.
Let us hear their tales…
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First up, we have a pair of complaints from different firms, but one location.
Miami
There was no raise to Miami Associates at Baker [& McKenzie]. They had communications and sent out a range for each year saying they will later send out individual communications to associate but nothing was done. So all other offices in the U.S. went to 180K scale and the Miami range is now from 145-160 first year and basically everyone falling on the lower end of the scale (145K) where they already were before Cravath.
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While we are on the topic of associates pissed off by Biglaw raises, the only U.S. office of White & Case that did not get the full Cravath scale raise is Miami. Management at the Miami office has refused to email a memo about the raises they are offering because they are afraid it will end up on ATL…
They’ve decided to raise the current salaries by 12.5% effective today… So the new scale goes something like: $174, 180, 186, 200, 219, 238, 253, 270, 287. Again, I can’t confirm exactly since they refused to provide ANYTHING in writing. We are the ONLY U.S. office on a lower scale.
I’ve got to say, the Baker & McKenzie story should make the White & Case associate feel much better about life. It always sucks to know that someone out there is making a bit more for the same — or at least similar — work, but it takes about $89K to live in Miami at the same standard of living that $180K provides in New York. That’s almost double what New York is making in real terms!
Making $174K should allow you to experience Miami as Tony Montana intended.
But $145K is on the low end. Miami may not be one of the top markets, but it still has to recruit people and it’s hard to recruit when salaries are $35K below the top of the market. I understand that I’m the avatar of New York privilege when it comes to salaries, but I still think firms need to do something for associates in these satellite offices to minimize intrafirm grievances.
Quinn Emanuel
Quinn’s June 8 raise “match” scale stopped at 7th years and said more senior associates would hear about their compensation soon. A month later, raises have gone into effect for everyone else but radio silence for senior associates here….
This isn’t the first we’ve heard of senior associates getting lost in the shuffle. But even if seniors are getting individualized raises, someone needs to figure out what those are going to be. If nothing else, bump everyone $10K while “we further evaluate individual raises.” Something.
And this complaint doesn’t look great coming as it did on the same day that the firm announced it had enough money to give its new hires $35K bonuses.
Holland & Knight
I’m a mid-level at Holland and Knight, and it’s incredibly frustrating seeing other less profitable, equally or more leveraged firms match the new scale. We’ve had very strong recent performance and PPP is now $1.25 million. Our salaries are not lockstep and bonuses are infamously below market. If HK doesn’t step it up on the comp front, they will lose good associates, especially in markets like NY, California and Texas. Have already had multiple recruiters reach out to me. Morale is LOW amongst other associates I’ve spoken with.
Yeah, recruiters must be having a field day with Holland & Knight. And why wouldn’t they? This is how capitalism works… resources flow to where they’re needed the most and, for good or ill, we define “need” with dollar signs. Sure, the market might be wrong about where good lawyers are needed most, but that’s for the invisible hand to work out through capitalism’s masturbatory trial and error process.
Foley & Lardner
Partners have been 100% silent on the new salary scale and we just heard from summers that management has told them that they will be informed of whether Foley will match (at least first year salaries) by the time they get their offers. Ridiculous for all their hardworking associates busting their butts to keep them profitable. The firm already compensates 95%+ of associates in major markets below market due to their tiered comp system for 4th years on up. Bonus policies won’t even get you close to market until 2,400+ billable hours. If they don’t match the bleeding will begin fairly quickly. Recruiters are pushing us all pretty hard to start interviewing with firms that have matched.
I hope firms are noticing this “recruiters are pushing” trend. Every day you stay off the market norm, there will be poaching. That’s not a reason to raise salaries as a knee-jerk reaction. If you can’t afford to play with Cravath, then you can’t afford to play with Cravath. Take your lumps and move on. But it’s why firms can’t pretend “if we just keep quiet and wait for ATL to leave us alone everything will go back to the way it was.”
Winstead
Not all Texas “big law” firms have raised salaries. Even after Jackson Walker and HayBoo raised salaries (Winstead’s nemesis), Winstead is still evaluating compensation.
I’ve gotten my share of flack for saying that Texas firms should still be below the top of the market, but as Bill Munny says, “Deserve’s got nothin’ to do with it.” Once the center of gravity in the market shifted to a Cravath scale, everyone had to.
But the “send it to a committee” approach is quite adorably politic for “we really don’t know what to do.”
Beck Redden
Beck Redden, a top-tier litigation boutique in Houston, still has not matched! According to the Chambers Partners ranking for commercial litigation in Texas, the firm is in “Band 1” along with Susman Godfrey and Gibbs & Bruns. (To put things in perspective, Vinson & Elkins and Baker Botts are in “Band 2.”) Beck Redden salaries already drop off after the 5th year or so (the scale by associate year is shown on the Vault profile of the firm, online). And now, it is below-market in Houston where it considers itself among the top litigation shops in the state!
Ditto the Winstead commentary. The only thing worth adding here is that boutiques still driven by their founders may well have different pressures than the Biglaw firms. Could the firm be looking to wind down in a couple of years as the founders retire? Maybe it’s not worth reaching for the brass ring in recruiting if the ride is coming to an end? We’d expect Beck Redden to move on to the future, but this is a factor worth considering as some boutiques slide out of line with the market.
Philadelphia
Meanwhile in Flip, Flip, Flipadelphia…
Will you be doing any upcoming articles on the Philly market? There was an article a few years back about Drinker following MLB and Dechert after they jumped to 160 (and other firms like Cosen and Blank Rome increasing to lower scales). Now that MLB and Dechert are at 180, I’m wondering if Drinker and the others are also considering increases.
This is yet another Texas effect. There’s no good reason Philadelphia associates should make Cravath salaries. And yet MLB and Dechert decided to move the local market up to $180K and now it’s hard for Drinker to say no.
But where does this flattening across markets end? Maybe there’s some statistical analysis proving that a Philly office generates as much revenue as a Dallas office as a New York office as a Charlotte office. If so, I’ve not seen it yet. Couple the differences in value to the firm with the cost-of-living variance, and at some point we need to reintroduce some sort of New York premium.
Alas, when you have a complaint about your firm (or if 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.
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.