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Nationwide Pay Raise Watch: Thelen Reid, and A Tale of Two Tiers

Thelen Reid Brown Raysman Steiner LLP Abovethelaw Above the Law legal blog tabloid.jpgAssociates at Thelen Reid were clamoring for a post shining the spotlight on their firm. Here are some representative emails:

"Since your posting on Bingham worked so well, how about starting one on Thelen? The silence from OTC [Office of the Chair] is deafening, and people are super-disgruntled."

"We've waited long enough here, and they haven't said anything. We've come up badly in who knows how many articles. We're the highest ranked firm (#17) on the Cal Law 25 not to raise, and several below us already have. And several firms that would be below us on the AmLaw 100 (we would be #69, but AmLaw refuses to count firms as merged unless the merger happened by a certain date, and our merger was officially Dec 1, 2006) post-merger have raised, and we haven't. And our PPP [profits per partner] is quoted in one article as $860K and in another as $850K, $15K-$25K behind Pillsbury who has raised."

"[A]lthough management hasn't said anything, popular opinion is that they will raise first years to $160K and compress everyone else across the board, mainly because that's what they always do. I don't quite understand how they feel they have "matched market" without lockstep salaries."

We meant to do a Thelen Reid post some time ago, but we never got around to it. And perhaps now one is no longer needed, since the firm has matched -- sort of.

More details, after the jump.

From The Recorder:

The last domino has fallen. That would be Thelen Reid Brown Raysman & Steiner, which on Friday become the last major California law firm to announce its response to the wave of associate salary increases.

But Thelen isn't precisely following the footsteps of the other firms that rushed to raise California first-years to the $160,000 mark over the last two months.

Instead, the firm has created a two-tier compensation structure that pays associates in most of its offices that work 2,000 hours a year on the $160,000 scale, while associates who work less will remain on a $145,000 scale similar to the old one.

It seems like a sensible solution. But there are some dangers:

"I think it will lead to class distinctions within firms and, in a sense, will give some associates the ability to self-select to a lower status," said Richard Gary, a consultant with Gary Advisors in Tiburon, Calif. "I don't know if it'll be good for morale in the long run."

Under the new Thelen pay system, which goes into effect July 1, associates can move between the two tiers without getting off the partner track, O'Neal said. Twice a year associates can, based on their last 12 months of work, move into the 2,000-hour tier. Once a year, associates can move back into the less-than-2,000-hour option.

The two-tier scale will be put into effect in California, Washington, D.C., and New Jersey. Thelen's New York office was already at $160,000.

Personally we don't think this is a bad thing. It gives both the firm and its associates greater flexibility, and it offers people a broader range of options when it comes to work-life balance.

But hey, we haven't worked at a law firm in years, so what do we know? We'd be interested in hearing your thoughts on two-track systems -- like those in place at Fenwick & West, Wiley Rein, and Thelen Reid. Please share them in the comments (and maybe we'll put up a reader poll later, too). Thanks.

Thelen Reid Responds to Associate Raises With Two-Tier Pay Scale [The Recorder via Law.com]


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Why, exactly, would it lower morale to allow associates to choose their own track? I don't get it. It beats having your track chosen for you, which is what is otherwise done.

FIRST BITCHES!

A two-tiered system makes absolute sense. It allows people who want to do things outside of the office (e.g. have a family, sleep regular hours) to do so, while still making what is, by most standards, a very good living. Those who don't make that choice can make more money and have better partnership prospects. The firm gets to keep good associates who can't (or won't) give up their entire lives in order to bill, but who still do good work and are profitable for the firm. I don't know why most Biglaw firms refuse to adopt the two-tier track.

perhaps the only amusing thing about these "first" trolls is that they are almost always wrong.

Hey Lat -- it's just "Thelen" now.

To me, 2 tiers does not make sense. It seems like the work you are currently working on chooses your hours, not the associate choosing the work based on needed hours. And the difference in tiers is what, 100 or 150 hours? That comes out to 2 or 3 billable hours a week, so maybe 5 total hours a week??? Will that extra 5 hours give you a life compared to someone in the other tier???
Just my opinion, but I think the better way is to just set a minimum, actually only require the minimum, and then reward those that go above and beyond with better bonuses, seems simple to me. For one, I think it is BS when the 1950 biller gets the same bonus as a 2450 biller, which happens at most biglaw firms.

what about compression?

I'd don't know what BL firms you're talking about that give the same bonus to 1950 and 2450 billers, but note to 2450 billers: LEAVE THOSE FIRMS.

Two tiers is great - people can choose between time and hom and $$$. 200 hours (diff between 1800 and the new 2000 Thelen requirement) equals five 40 hour weeks, or one or two reasonable vacations and a hell of lot less stress through the year. Good on you, Thelen. More firms should do the same - it will increase retention, improve associate QOL, and help you keep good associates in regulatory practice areas that don't have crazy billables but have great skills. More firms will be going two tier in the next couple years.

1:30 -- but those 100 or 150 hours are incredibly valuable for the firm. 100 hours lost could be $25-40K, which, incidentally, is likely more than the firm is recouping by paying the lower tier people less.

Sorry - meant to write "choose between time at home and $$$," not "time and hom."

1:30 - Thelen also is giving bonuses for meeting 2000 hours and has additional bonuses for higher hours.

brilliant move by thelen!

1:17, 1:20, 1:35 are Thelen partners trolling the blogs in an attempt at damage control.

No associate is buying your B.S.

1:44: no, I'm an associate in the midwest that understands that not all lawyers are tools. I know that's a tough sell in large swaths of NY biglaw. Deal with it.

What's the hours requirment for those on the $145K scale?

$145K scale would be anything less than 2000 hours, I presume.

In fairness to 1:44, what was the previous billables requirement (real or in practice) at Thelen before the tracking system? If everyone had to bill 2,000 anyway, it's just a raise.

If you got your numbers bumped to get to 160, well, too bad for you. [be careful what you wish for, you just might get it]

Howrey DC raised to 160 today. Effective July 1.

1:44 -

Thelen's response to associate raises is fitting given your response.

If you are not willing to make to effort to look out for yourself, then why should anyone else.

Have Alston & Bird or Sutherland raised to 160 in DC?

Is there a Howrey memo? If so, someone should get it to Lat and there should be another addition to this post.

Maybe the DC list of shame is shrinking in the summer heat.

1:52 - "officially" 1900 (or so summers get told). Real was already 2000.

There was an individualized memo that went around today. The firm is committed to ensuring competitive compensation of associates "who meet or exceed expectations". We expect a 2-tier salary structure to be announced at an associate meeting tomorrow.

The lack of Thelen associates posting here makes me think that they are content with their "QOL" firm.
OR...
they quietly looking for a move.

OR...
they're quietly looking for a move.

How about a post on Nixon which makes an appearance in every list of shame?

1:30 - you seriously have no idea what you can do with 5 hours every week? you and biglaw were obv. made for each other

2:19 - When I think about how sometimes I waste 45+ minutes a week watching the latest episode of House MD, I wonder if I'm wasting the precious gift.

I feel even worse when i see the ratings for shows like American Idol and America's Next Top Model.

2:16/2:17, either that, or they're busy working while you're lazing around.

What about Thelen Hartford? Still some tiny fraction of its other offices? Can you say bush league?

On a similar note, Lebeouf apparantly moved in Hartford finally and started paying NYC scale to its associates (some of whom doing all NYC work). That leaves Thelen as the last national firm in Hartford to cheap on it associates there.

What about big firms that have NO billable hour requirements? What should be expected?

You are obviously here too. So back at ya!

i guess dc list of shame got the raise.

Lat...you should do an update on Seyfarth. We have been told in the LA office that there is no plan to raise salaries right now. Good story. Good times...

$145k for 1800 sounds good to me -- how much pressure will this put on holdout firms that are claiming a "low" 1850-1950 requirement justifies keeping the pay at 145k?

I can't believe no one is bitching about Portsmouth on here today.

I miss the DC list of shame. Aw.

3:10,

Thank you for referencing a serious growing trend. By that I mean the fact that ATL still doesn't have Portsmouth salary info! We demand answers!!!!!!

2:18 -- I think the Nixon lawyers are all too busy getting their resumes ready.

My heart is encouraged that others are now rallying to the side of we beleaguered few in Portsmouth. With your help we WILL push this market to $95 or, in the alternative, get a guaranteed Taylor Pork Roll for every associate's daily lunch.

Lat-

I know there has been a lot of coverage of the major markets, but it looks like DC is one market that still has a lot of movement (i.e. K&S, Howrey). It might be interesting to do a post on DC exploring which DC offices of large firms have yet to move and what people think the outcome is likely to be.

Thanks!

Thelen=horseshit.

Don't go there, especially the "D.C. office."

does anyone have any idea what the thelen compression figures look like?

What's wrong, 4:12? Sad you didn't get an offer?

4:19:

Nope. Didn't apply. Wouldn't consider applying---especially with this compensation structure.

The horse flies are following you . . . shit associate at shit firm.

In the last three years, across the firm only about 30% of Thelen associates were billing over 2000, and another 30% were under 1700. The "minimum" was 1900 but until recently not hitting it was not a big deal; and bonuses were so bad it really didn't matter. Now, Thelen is paying better bonuses (at 2000, 2100 and 2200) and unless you are in a practice group that just doesn't generate the hours, billing less than 1900 really won't be an option.

4:17

short and fat. usually carrying a briefcase. and sweating.

What's so awful about Thelen's DC office?

4:40 -- sounds like 4:12/4:32 didn't get an offer and is pissed. Or maybe got fired for incompetence or something. Too strong a reaction for anything else.

4:39 - in which case Thelen associates have no right to bitch about anything. Getting paid 6 figures to bill under 1900 is stupidity personified. Even if it is in a big city.

4:40:

4:54 is either a shit associate at a shit firm or a shit partner at a shit firm. Horse flies!

For the record, credible people (see 2:17) who have actual knowledge about the place have told me what goes on there.

Men lie. Women lie. Numbers don't (see 4:39).

And on that note, back to billing. We don't have dual tracks here.

Hum, $145k for 1800 - 1900 hrs.???

Wow, Atlanta firms bitch and moan about paying $130k and reward us with 2000 billing requirments!!!!! Atlanta is great!!!

This makes Atlanta look even worse than it did already....

I nominate 5:03 for Post of the Day. Damn.

4:54 - don't work there, but nice try. And I don't see how 2:17 represents "credible people." Praising yourself as 6:50 was cute though.

(1) Two-tier tracks would be a great thing as long as partners aren't writing off the hours of people legitimately at the 2000 hour level to keep them at the 1900 level (or whatever).

(2) Bonuses should be available at 100 hour increments. These firms that give the same bonuses to associates that bill 2100 and 2350 aren't helping morale -- why should associates stay to bill that extra 250 / year???? Give extra bonuses to people for every 100 additional hours. Those that want or need the extra cash will do the work. Those that want to see their families will go home. All will be a lot happier because they will be in control of their own schedule and work demands.

Which reminds me, we really need transparency in bonuses. That can make a difference (a HUGE difference) in actual amount of $ taken home each year. May we have a post on that, please?

DC Vault of Shame

40. Baker Botts
50. Fulbright & Jaworski
58. Vinson & Elkins
59. Alston & Bird
64. Holland & Knight
68. Foley & Lardner
70. Hunton & Williams
71. Patton Boggs
74. Kirkpatrick Lockhart
75. Nixon Peabody
77. Bryan Cave
79. Crowell & Moring
86. McGuire Woods
88. Arent Fox
93. Kilpatrick Stockton
95. Dickstein
96. Venable

Vault of Extreme Shame
87. Squire Sanders

Yeah! DC Vault of Shame is back!!! ;-)

Lat - I second 2:59 -- Seyfarth needs to be outed -- their fearless leader Steve Poor (what a name!) have told their associates that they will NOT be raising salaries (except NY which is already at 160).

Lat, 2:59,
Please explose Seyfarth's poor man. What a sham, either admit you are a second tier firm or pay up.

The list continues to shrink. Apparently Howrey may have distinguished itself. Anyone object?

Continuing CA List of Shame:

1) Bryan Cave
2) Baker & McKenzie
3) Foley Lardner
4) Greenberg Traurig
5) Holland & Knight
6) Nixon Peabody

Permanent All City List of Shame
1) Seyfarth Shaw for planning not to raise.

11:04, second tier firm? Or is it simply the reality of lower billing rates for L&E work?

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