Why does ATL consistently misstate the increase as only $15k? It's a $15k raise for first through third year associates and $20k-$30k raises to midlevel and senior associates. It's not just an "extra $15k." It's $15k to $30k depending on class year.

Thanks, that's right; someone sent us an email pointing this out too. Revising this post and the prior post.

Which firms are considered to be Simpson's peers?

Anxious, if you have to ask, you're probably not at one of them.

skadden, weil gotshal, and others surely will follow

I was asking about Latham.

Like I said...

I would not worry--they will match.

Is Paul Weiss considered a peer?

Paul Weiss is a peer of Skadden, but not Simpson. Skadden is a peer of Davis Polk, which is a peer of Cravath, but not of Sullivan and Cromwell, even though S&C is a peer of Cahill which is a peer of Paul Weiss but not Skadden. Yet Cahill is a peer of every one of the above except for Cravath, because Cahill is also a peer of Weil, and Cravath didn't want to be Weil's peer. Weil got angry over this and made itself a peer of Schulte, but when Schulte found out the reason for its peerage, it too got angry and renounced Weil, so they are no longer peers.

But all the law students graduated and made more money than they could dream of, and lived happily ever after.

And no one with a brain believed that any other firm matched Simpson today. It takes more than a couple minutes for the requisite partners/committees to convene and make a decision that will cost anywhere from $10 to $50 million.

Lat,

I think it would be newsworthy to put the post in context. This is not merely the story of one firm (like Gunderson in 2000) raising the bar. I think Simpson move on this is the last step of their ascendency to the very top of the NY legal pyramid. I suspect that when the AM100 numbers come out, they will show that Simpson's PPP are now above both Cravath & S&C. The old guard is embattled. It's got Charney and Co. airing its dirty laundry, its old white shoe clients have many more places to go then they ever used to and in come Simpson and Kirkland and are now able to trump their salaries. These firms are doomed unless they start actually leading SIGNIFICANT increases in salary, especially at the senior levels. A class of 1999 should be at $400,000.

180 to achoo's post.

There are four tiers of NYC law firms:

Tier 1, Wachtell and Cravath;

Tier 2, Davis, Simpson, Sullivan, Cleary and Debevoise;

Tier 3, Paul Weiss, Latham, Skadden, Sherman and a handful of others I forget;

Tier 4, every other firm that pays $145,000 starting salary (there must be dozens of them).

Before today, all firms in Tiers 1 to 4 paid pretty much the same thing (with the obvious exception of Wachtell). The question now becomes, will only Cravath and Tier 2 firms match Simpson, or will Tier 3 firms do so as well?

In either case, I am fairly certain that the vast majority of Tier 4 law firms will not be able to match.

there is no way in which cravath is in the same tier as wachtell. if anything it's well below STB for not only matching milbank for bonuses but for announcing as soon as it could to forestall the arms race.

what about CWT? a definitely a simpson competitor for law students and PPP

Loafer, I should have clarified that my tier rankings are based on which offers students from Harvard or Columbia are likely to accept. Almost no one would accept an offer from a Tier 3 firm over a Tier 2 firm, for example, and the same goes for other tiers. But it is not uncommon for someone to accept an offer from, say, Cleary instead of Sullivan; hence they are both tier 2.

If you classify firms according to different criteria, you would obviously get different tiers.

1. CWT is not a competitor with Simpson for law students. It is for PPP no doubt, but I think in terms of law student preferences Cadwalader would end up below Paul Weiss, Latham, and Skadden... if for nothing other than those abysmal associate satisfaction rankings. Didn't they get a zero one year?

2. anonymous 11:46 - I don't know if things are as clear cut. It gets tricky when you think of practice areas. For instance if you wanted to do litigation you would probably take paul weiss over cleary. I also might swap debevoise and skadden.

3. anonymous 10:09 - Simpson is definitely on the rise, but to portray it as an upstart is kind of ridiculous. It is kind of the epitome of a white shoe firm. It's true that it might swap places with Sullivan but this isn't some big upstart firm like wachtell or skadden were back 30 odd years ago. That said, they are a bit set in their ways and are suffering for it - and Simpson is definitely reaping the revenues of having gotten into Private Equity before the other white shoe firms.

While a few firms will meet this, I think this may be the beginning of *some* differentiation between AmLaw50 firms. An associate at, say, Thelen may be smart and good but cannot be billed out at the rates of a place like Wachtell or Simpson or Skadden, and Thelen's not going to match this kind of bump (or at least not the next one).

to the commenter with the tiers: there are plenty of people who choose any of your "tier 2" firms over cravath. cravath has a unique rotation system and culture that are not for everybody. plus, only marginal prestige over the next "tier." it's missing certain practice groups and pays the worst on an hourly basis. it's much, much closer to s&c/dpw than it is to wachtell and probably functionally the same.

Within which tier would you place Sidley Austin?

Anonymous

Paul, Weiss was named the top litigation firm of 2006 and, that aside, is unarguably at least in the top 3 in that area. I know quite a few current and soon-to-be litigators who opted for Paul, Weiss over what you call Tier 2 and even Tier 1 firms (over Cravath, not Wachtell; incidentally, it's a bit of a stretch to put those two in the same league). So, unless you're looking at overall well-roundedness of practices across departments or put much more emphasis on corporate, I think that you're taxonomy is a bit shaky.

'your' taxonomy, rather, not 'you're'. I realize how gleefully people slam people here for that sort of error.

Cravath has two related upsides over other firms:

(1) Exit opportunities. Cravath associates can get a *business* position at an investment bank or a hedge fund. Associates from other top law firms can get *legal* positions at banks or hedge funds, but legal positions are not as appealing (or lucrative...) as business positions at the same firms.

(2) Because of (1), a lot of the very best people at Cravath leave early. That makes it easier for those who stay to make partners. At Sullivan, Davis, etc., you can pretty much assume that the best people are going to go for partner.

ridiculous. The options to go into banking are no different between CSM, davis, S&C. The same amounts of assocites at those firms go into business. CSM provides no additional prestige incentive, either. You go there because you like the rotation system, not because it'll give you a better in as a banker.

To lump Cravath with Wachtell, and over S&C, Davis, and a bunch of other firms, are both ridiculous claims.

Paul Weiss a 3d tier firm? Give me a frigging break.

Wasn't it named litigation firm of the year last year? Isn't the head of litigation currently defending Scooter Libby? Didn't they win Frank Quattrone a huge win in the 2d Circuit? You guys are crazy, and way too hung up on white shoe names.

And, no. I'm not employed by Paul Weiss (but I kinda wish I was).

to make partner at cravath, you basically have to hope a partner retires just before you're up for review. they work their associates harder than the rest of the V2-10 and pay the same. you'd be crazy to take them over any other top firm.

Paul weiss is arguably not in the same league as the other firms because

1) it is not as well rounded - its corporate dep't is kinda weak.

2) it is not quite as selective in recruiting. It is easier to get a job there than at Simpson, Sullivan, Cravath, Davis, etc. The difference isn't huge... but it is there.

I am the one who posted the tiers above. A few points in response to comments:

(1) Sidley Austin would be Tier 3 and Cadwalader, Tier 4 (but as another poster noted, the tiers would look quite different based on PPP).

(2) Paul Weiss is indeed good at litigation, but let's keep in mind that the most talented litigators from top law schools are much more likely to work in D.C. than in not New York. I can name more than a handful of D.C. litigation firms that are more selective than almost any New York firm (other than Wachtell). So to the extent that my rankings are "biased" in favor of corporate, I would say that this is fair for the New York market.

(3) I admit that I may have been wrong to put Debevoise in Tier 2.

Whatever it takes to make you feel like your misery at Cravath is worth it.

Do you honestly think that the Harvard and Columbia grads who go to (e.g.) Sullivan or Davis don't have or couldn't have gotten offers from Cravath?

To say that Cravath associates have far better exit opportunities (which leads to easier partnership prospect at Cravath!) is even more ridiculous.

I actually know many Columbia students who work at STB and S&C but didn't get offers from Cravath (yes I went there). There are also some who get offers at Cravath and turn it down; I was one such person. The general rule for getting a Cravath offer was Law Review and/or Kent Scholar (top 1-3%) or high Stone Scholar (top 1/3).

it's so demented that people are vying to have their souls sucked out through their faces. everyone at all these firms is smart, in that each attorney presumably performed well on the lsat and went to a top tier law school, for whatever that is worth, but also idiotic, for thinking that the prestige(ha)/money(haha) of working at a top firm is worth never seeing your family again while gaining copious amounts of weight rotting away at your desk. and also try to take a bigger view of the "universe"...investment bankers think you're poor (think brandon davis calling firecrotch disgustingly poor), and that you work for them, which is true...and public interest lawyers/professors/AUSAs think they are smarter than you, and better people, also (sometimes) true.

disclosure: i work at a "top tier" law firm.

If you really want to know who can and can't match, go take a closer look at the AMLAW numbers, and calculate revenue per lawyer. In 2005, Simpson had RPL of about $1.124M. that puts it in 6th place. Wachtell leads the field with $2.4M, S&C at $1.6M, Cravath at $1.28M, McKee Nelson (Who?) at $1.17M, Davis, Simpson, and a bunch of others fairly close behind. Bottom line: there are a few dozen firms that can easily afford to pay it, without taking a huge hit to profits, so long as they do not have unusually high leverage.

Who will pay it? That's a more interesting question.

I think the more interesting question is whether the spillover effects will trickle down to DC firms as well -- Cf. Anonymous 1:54 AM. There are a handful of incredibly selective DC litigation firms, and the question is what their draw will be in recruiting top students now that the gap in associate salaries (which always existed) looks to be significantly larger than before. Obviously, people have city preferences and practice preferences, but putting that all aside, 25K diff for your first year is nothing to scoff at.

Does anyone know how fast DC firms raised their base salaries the last time the "bump" happened?

Many (most?) DC litigation firms still haven't raised to $145K, so I wouldn't bet on a bump to $160K. Perhaps they will bump to $145 now, leaving "only" a $15K gap (for first years).

Not really my area, but what would be the top D.C. litigation firms?

Williams & Connolly, Kellogg, Huber, and Covington are the three that jump to mind.

Looking at the numbers etc. is nice, but the NY firms are going to match either way--and Im not just talking about the top 15 either. There is going to be a snowball effect when one firm outside that group decides to match. Say Schulte goes to 160. A whole host of firms that are more selective in recruiting will have to match, or else get effectively shut down at the top 5 law schools. And every time one of them matches, there will be more pressure on others to match. Will some firms choose not to match? Yes, but it's going to be a drastic decision. There's probably 50+ firms in NYC paying the $145k rate. Anyone who decides not to move up as 40 of those firms go to $160 will have to rewrite its business model, i.e. can no longer effectively recruit at the schools they want to recruit from.

Skadden, Weil, or Kirkland for bankruptcy? Which one is most prestigous and offers most exit oppurtunities for 5th year associate?

Kirkland

Yes, it would be a bad business model, but I wouldn't be surprised if many of the V100 firms stay at 145K and try to distinbguish themselves as "lifestyle" firms. "Sure you can make $160K, but with us you can go home at 9 instead of 11."

What tier would you all put Boies, Schiller in?

4th tier

Anonymous (11:19)-I'm at just such a firm in NYC. The trade off is bonus money--I was at the same 2006 base salary levels as the top 10 firms, but I make about half the bonus money that the associates my year at those places make. If you're talking about dropping behind in salary by $20k on top of that, you're basically asking me to make $40k less to do 200 fewer billable hours, or $200 per extra billable hour (We make about $75-90 per billable hour, as a point of comparison). The lifestyle firms are going to be much tougher sells.

Anon at 10:09 here.

1. I understand that STB is no startup - thank you.

2. It still doesn't change the fact that as a business story, they have the best one out there. They are far ahead of where they were 15 years ago, and it shows. Of course every other firm in New York will match including a substantial number of the "Tier 4" firms (according to that stupid chart above).

3. The chart really is idiotic - I hope you are still a student and not an associate. The reality that few law students recognize is that at most of these firms there is a specialty of some kind or another that beats the so called "tier 1, 2 & 3" firms by a margin. In fact, I was at a tier 2 firm where we had to ask a tier 4 firm for a precedent to do the deal we were doing. A GC hires one of the Tier 1, 2 or 3 firms for special situations in which the ability of those firms to drive their associates to the ground is important in achieving successful results. The "prestige" aspect comes from the fact that it just so happens, not surprisingly, that those deals are the most profitable ones.

Wow! You losers really are as sad as I've always thought (and as you so richly displayed in law school). I'm a state lawyer doing environmental work and make about $60,000 a year. I have more time than I know what to do with, recently married the most beautiful woman in the world and am constantly learning. I do my own work, not some other guy's. I get a great sense of pride when I stand before a judge representing the people of this great state. And imagine, all this for a fraction of what you money hungry animals make. It really is alarming. And yet, I get a certain peaceful easiness when I think of you all out there toiling away for little more than gold. I am reminded of Thoreau, but more importantly, you should be: "The mass of men [and women] lead lives of quiet desperation."

I'm starting to get nervous. When are we going to start hearing some matching firms?

whoever put skadden as a tier 3, but cleary and debevoise as a tier 2, is a fucking idiot, plain and simple.

hey mike,

only insecure losers (you) troll law message boards cutting other people down to make themselves feel better. you can wrap it in bullshit spirituality, but your denigration of others who you know nothing about does not reflect well on the kind of life you lead or the kind of person you are.
hth.

hth:

My apologies for striking a nerve. I certainly wasn't singling you out. really more just addressing the entire money hungry "big firm" associates as a whole. For the record, I know exactly who you people are.

I like to think that I lead my life in loud, obnoxious desperation rather than the quiet boring kind.

Mike, that's so sad. You're not striking a nerve as much as inviting derision. Why are you reading this post and these comments? They do not apply to you. What other people value (and the reasons for their value system) is certainly no business of yours, something you should have discovered in your process of enlightenment.

mike,
its jealous, closed-minded, judgmental fucks like you who give public interest a bad name.
hth.

Mike's not a public interest lawyer. He's just a government lackey who couldn't get a better job after he graduated in the bottom of his class from podunk u. law school. And by "better", I include low-paid public interest law jobs as well as biglaw jobs.

Wow! Also, wow. And finally, I didn't realize that we who work in the interest of the public have a "bad name." I guess that's the kind of stuff you guys talk about when you go down to the atrium to pick up dinner in the evening...

mike,

you clearly didn't get a firm offer in law school, as is the case for 99% of people who "choose" to go into public interest. or maybe your parents put you through school so you don't have loans. environmental law sucks by the way.

mike,
you are so bitter but don't even realize it. you should get some help in dealing with your feelings of inadequacy.

anon 1:19 - you forgot gov't lawyers with real jobs - antitrust and AUSA, for instance.

Mike - actually I think what they talk about how their dinner was more expensive than your suit. Also that weird birthmark on your wife's thigh.

idiot correction:

You are correct. I clerked in federal district court, took the summer and fall off, and was sworn in to this office in late December of '05. I paid for law school, my parents did not.

Anyone wondering why Mike is still here, reading the thread totally irrelevant to his life?

Very simple. I can simply flip back and forth while working on these rogs and am elated by the responses from these impotent lemmings.

Mike -- you sound lazy. I wish our Environment had a better lawyer. But then again . . . you get what you pay for.

Wow. That was clever.

Weil gotshal good place to work?

Anybody have info on TRAUB EGLIN LIEBERMAN STRAUS LLP, esp. salary, quality of life etc?

Hooray, another crappy marketing idea from BigLaw. If it's staving off the braindrain to IB/in-house/non-NYC positions, then why raise first-year and other junior associate salaries? The money would be better spent on a bigger jump for mid-level and senior associate salaries--the people who actually have a choice between being in-house, in-firm, and non-legal career, and who provide value for their billable hour. There's no good reason to raise the salary floor. $145k was already obscene.

IB and law require completely different skillsets (math vs. verbal.) This has nothing to do with IB and everything to do with competition for the best students.

How does raising salaries for first year associates affect those who leave to go to investment banks and private equity firms? Are banks hiring people right out of law school? If the purpose is to retain mid- and senior-level associates, wouldn't the money be better spent increasing those salaries (i.e., having a massive jump from year 3 to year 4), but leaving the entry-level salaries where they were? And don't tell me the standard "we have to attract the top students" rationale. You don't need them for junior-level deal work, and if they leave when they are mid-level (when you can start leveraging their talent), then what was the point?

On a related topic, the last run-up in salaries was due to a need to compete with technology firms that were hiring away lawyers. Shortly thereafter, the tech bubble burst. Now, firms are raising salaries to compete with banks and private equity. Will the pattern continue?

Milberg Wiess matches. Should be a big draw next year.

Any chance these raises apply to 2007 Summer Associates?

Answering an above question, the three best (large) D.C. litigation firms are Williams & Connolly, WilmerHale, and Covington & Burling, not necessarily in that order. My impression is that all three attract graduates comparable to those hired by CSM, S&C, DPW, STB, etc. So although I'm not a compensation expert, it's hard to imagine that W&C, WH, and C&B could continue paying $145K in their New York offices.

But I have no idea what this means for D.C., Boston, Palo Alto, etc. Any thoughts?

Mike -

District Court? Guess you weren't smart enough for the Circuit. Take THAT, bitch!

Seriously, you're hilarious. I can't believe how riled up these ppl get.

Williams and Connolly doesn't even have a New York office...and they pay below the going rate (no bonus, I think).

How can a firm like Williams and Connolly justify paying below the going rate even for DC?

Weil matched.

Can anyone at Skadden outside New York confirm raises to all domestic offices?

To: US Associates

From: Stephen J. Dannhauser

As announced at today's Town Hall Meeting, effective January 1, 2007, annual U.S. associate base salaries have been increased, as set forth below. You will receive a retroactive adjustment reflecting this increase in your paycheck or direct deposit on February 9th. Bonuses will be paid this Friday, January 26th. As we have previously told you, it is our intention to pay our associates commensurately with our peer firms.

The firm has enjoyed a very good year, and we recognize that your dedication and hard work have contributed, and will continue to contribute, to our success.

Class Year 2007 Salary

2006 $160,000

2005 $170,000

2004 $185,000

2003 $210,000

2002 $230,000

2001 $250,000

2000 $265,000

1999 $280,000

Base salaries for associates in the class of 1998 and more senior will be determined on an individual basis.

To: US Associates

From: Stephen J. Dannhauser

As announced at today's Town Hall Meeting, effective January 1, 2007, annual U.S. associate base salaries have been increased, as set forth below. You will receive a retroactive adjustment reflecting this increase in your paycheck or direct deposit on February 9th. Bonuses will be paid this Friday, January 26th. As we have previously told you, it is our intention to pay our associates commensurately with our peer firms.

The firm has enjoyed a very good year, and we recognize that your dedication and hard work have contributed, and will continue to contribute, to our success.

Class Year 2007 Salary

2006 $160,000

2005 $170,000

2004 $185,000

2003 $210,000

2002 $230,000

2001 $250,000

2000 $265,000

1999 $280,000

Base salaries for associates in the class of 1998 and more senior will be determined on an individual basis.

dclounger

Yes, banks are hiring right out of law school. I have friends in my class who are going IB instead of Law Firm. They're going to make my BigLaw salary look like a pittance. I don't know if I'll be making $145k or $160 just yet, but it's true either way. something like $190k.