FIRST

Not credible -- move on to better gossip mongering

Sounds very plausible. That would allow them to have rumors running rampant right around the time students are making the Dec 1 NALP final descisions and could leave others with very little time to counter.

crazytalk.

Skadden-Wilmington to 195? Holy shit.

Possible, but I would be interested in getting a better description of the "source."

Sure Why Not (11:24) has the best analysis so far.

This should not be dismissed out of hand.

Interesting, but highly questionable.

11:24 (#1), I don't see how it's a recruiting advantage (save for outside of NY). If they raise, everyone raises.

I think 11:24 (SWN) is saying it would be a timing thing; it would catch the firms that hadn't been expecting it flat footed and unable to react before 2L's mulling multiple offers accepted at Skadden.

So Skadden finally found a way for first years to bill 25 hours a day? This sounds like great news!

I had a law professor who used to work at Skadden and actually DID bill more than 24 hours in a day, as he was flying from East to West.

it's shite

Ovary Bell: They must have been pissed at him when he flew back the other way and lost a few hours.

Forget $195 in NYC, when will Atlanta raise to friggin $145k????

The silence is deafening.

It's plausible and here's why: When starting salaries were way down at the 125K level, Skadden's was at 145K and then it paid out a smaller bonus to match the full market comp. Since the first raise to 145K and then to 160K Skadden has simply followed market. But now that Skadden sees that the market has probably settled at 160K it wants to go back to its previous model--i.e. being ahead in salary comp. but matched in overall comp. The one obvious difference between this 195K rumor and then 125/145 regime is that in the previous regime Skadden was only 20K ahead of market and now they would be 20K ahead. But in the last several years first year bonuses were at least 30K so it doesn't matter.

I don't buy it. That said, all Skadden associates in Houston and Wilmington are currently crossing their fingers, knocking on wood, saying their prayers, offering their souls to Satan, etc., in the hope that this is true.

Credible, these pay raises seem not just a way to attract associates, but rather a way for more profitable firms to strangle their competition. Skadden, STB, all have ppp of around 2.5-3 Mill - they won't feel a pay raise like this - Firms like Shearman and Pillsbury Winthrop on the other hand - a salary war now is a good way for the more profitable firms to stick it to the competition, that's why its the Skaddens and the Simpson Thachers that are leading the charge.

EDIT to 11:39 "Skadden was only 20K ahead of market and now they would be 20K ahead"

I meant now they would be 35K

11:39,
I think you got the math wrong. If Skadden raised to $195k, they would be $35k above market, which at least in NY would compensate for no bonus.

Very credible, I've heard this going around in Skadden for a while. It should take effect in January.

What about A&B going to $145k in Atlanta by September? This has been a rumor for months. Anyone hear anything?

Skadden partner meeting:
Partner 1: "We should screw the associates"
Partner 2: "We should screw them hard"
Partner 3: "Maybe we should only screw them a little."
Vote for screwing associate: 3-0

Skadden associates: "Did you hear what Partner 3 said when he voted to screw us?"

Above the law: "NYC to 195!"

A&B to 145 in September? Just in time to assure that their summer associates in Atlanta don't benefit. Clever, clever.

Amen, 11:40. Mega firms with low ppp #s (i.e., Jones Day, DLA, etc.) are really going to feel the pressure after the next raise. That will translate to a slimming of the ranks and increased pressure on associates to bill ridiculous hours.

Slight correction to 11:39 -- when market was 125, Skadden paid 140. They didn't bump to 145 until the other NY firms raised to 145 in early '06, and thus lost their "market leader" status.

11:49 - also, waiting until the last possible moment before OCI begins.

Why drop in Atlanta when every other large market is paying $30k+ more in base, with half the compression, and real bonuses?

All of you -- GET BACK TO WORK!!

Atlanta to 35K!

Crazy talk: The firms that Skadden competes with for talent could all match 195K. Therefore, there is no reason for them to move. When all those firms move within a week of each other, no rational second year law student will care about it and will make the choice based on a host of other factors.

If there is someone trying to decide between Skadden and Jones Day, Skadden doesn't actually want them and they benefit when that person does not join Skadden. Irrational actors belong at second tier firms anyway.

Dear Skadden,
Please raise to 195k so I can buy Oona O'Connell the diamond ring she deserves.
Thanks

Is Skadden really afraid of not having a good 2L recruiting season? Or is this more targeted at midlevel associates who are considering lateraling to/from Skadden?

It's the "fairly" in "fairly reliable source" that worries me. Lat gave himself some hedge. My hunch is "fairly reliable" = not reliable.

Also a 35K jump just sounds too reckless for normally conservative law firms. Combined with the previous 15K jump, it's a 50K bump in just one year. Regardless of where that money comes from, GCs will be bitching.

S'up

Does anyone think the rest of the 160K firms would have to bump up their compensation (to 175K, for example) if this happened? Or would "market" in the other major cities stay at 160K?

Round and round and round we go.....

11:24/Sure Why Not is a moron. The previous raises were to retain existing associates, not to recruit law students. That's why the raises are at the beginning of the year. I call bullshit.

after skadden raises, at least all the vault top 20 firms would raise to match in a heartbeat

Sounds like Skadden is planning on a $35k bonus. Could be a return to the pre-Gunderson "deferred comp" thing--i.e. there is a set $35k "bonus" for first years, payable to all who are employed at the firm on 1/1/--. That satisfies all three points of Lat's rumor while not being another raise in base comp. Seems the simplest explanation which assumes all parts of the rumor as true.

11:39- last comment does not makes sense, Satan has every Skadden associates' souls already

Lat is smart -- he posts this on Friday, now that overall traffic is down since most of the firms that are going to raise have raised, so he can make more money off of all the idiot-posting on a fake rumor.

The $195 fits in just fine under the existing comp- a $35k bonus is guaranteed anyway, and a good profitability year would leave room to pay $195k and then still pay a bonus on top of it.

I'm going to get $195k anyway, I'll just have to wait for my bonus check.

I'd rather get the $195 throughout the year--then if someone decides to raise the ante by paying a bonus, we get that too.

I think that those noting that 160 (base) + 35 (bonus) = 195 have a good point. Remember that the early-2006 raise was justified by S&C on the basis that they wanted to move away from a bank-like base/bonus model, and instead have the base salary as the overwhelming component of their compensation.

11:46 -A&B needs to go to $160 in DC before it moves in ATL.

It makes no sense for A&B to be higher than K&S in ATL but lower in DC. Everything should shake out with the ATL firms in the fall.

Because for fall OCI, most people who want to interview with one will want to interview with both.

Why are there any Skaddeners who agree to work in NYC at the same rate as their likely fewer-hour (or at least less stressed) counterparts in Wilmington or Houston whose $195k would easily equal $220 in NYC? This is ridiculous. I quit.

I agree. Get rid of firm-wide policies.

2000-2005: No raises
2006: 20K raise
2007: 15K raise
2008: 35K raise?

I call bullshit if the suggestion is a salary raise with no impact on bonus.

Does anyone remember why other firms didn't feel the need to match Skadden at 140K pre-2006? How did they signal to the market that they would pay a smaller bonus to simply match total comp?

Screw 145 - demand 160 in Atlanta like everywhere else.

Atlanta to 35K!

as long as market is 160 regardless of whether you are in NY or CA or DC, this will be offensive. NY has to be on top. I don't give a crap if Atlanta gets 160, as long as NY is getting 190.

Lawyers in Skadden's Wilmington office bill more hours on average than any other office.

1:03 - you're a moron too. NY was at a 125-scale just like the rest of the nation for a long time. Stupid young'uns.

I would be highly insulted if my firm paid more to, say DC or LA associates, though on the whole I don't give half a damn that they're making the same as me. There's always some whiner like 1:03 taking this as a insult. Regarding this, the best way to remedy this matter is to get the hell out of NYC. We've had enough of you anyway. If you think you'd be happier in Topeka, or whatever backwater you crawled out of, by all means please return from whence you came. I consider it an insult that people like you have the audacity to pose as real New Yorkers.

11:38 - the 145K in Atlanta is unimportant. You should be more focused on the fact that top of scale is 185K.

the skadden associates in houston, wilmington, etc... deserve the same comp. because they work the same hours and generate the same amount of revenue

you choose to live in NYC. stop complaining. it would be like saying "we spend a lot of money so we need to make a lot of money"

amen 3 firms already at 160 in the ATL. A&B and K&S can't call themselves 'market' at 145.

Atlanta to 35K!

3 out-of-town firms paying 160k does not make 160k the new market rate. Even $145k in ATL is too much to pay a 1st year associate.

no one gives a shit about atlanta

1:20: That's exactly what it's like, and it has a name: inflation.

What's the market rate these days for a 4th year associate's ransom in Atlanta?

by that logic, because you buy a big house you should receive a higher salary

Firms in London already pay more over $190,000.

2:10, that's not really true, though I don't have the time or energy to challenge your assertion. I hope someone else will.

1:17, is a real New Yorker one who was born and raised there, or one of the small-town folks who end up practicing law in the big apple?

2:10 - who cares? 90,000 pounds is not really the same as $190,000 in actual buying power, and they're not competing for the same pool of people. You're an idiot.

Question - Were these kinds of rumors swirling around before the firms bumped salaries up to 145K and again to 160K?

2:22, if you're still curious, yes: born, raised (and yes, actually in Manhattan), NYU Law, BigLaw (prefer not to say which). I realize now what I said sounded horribly condescending, but it's a sore point for me. Cost of living in Charlotte, Houston, etc., has nothing to do with what we get paid in NYC. That's it. I've heard too much of this irrelevant point.

If you want a pay increase, argue relevant points, such as the fact that we're worked to the bone on matters that make obscene amounts of money for the partners

195 total comp makes sense

OH MY GOD

Chicago to 200k!!!! Kirkland Ellis (Chicago) is probably the best law firm out there when you factor is COL, 160k, and the super fast bonuses for first years

Kirkland is definitely the best law firm in Chicago if your metric is the number of pricks who make partner.

I cannot deny the fact that a a lot of partners are pricks

how much are kirkland's bonuses...

Actually Houston I believe bills the most on average.

New York actually is on the low end of Skadden's offices for average billables. However, Skadden NY's average is lowered by the sheer size of the office, and the number of (relativey) inactive practice groups ... Skadden NY has a large restructuring practice relative to the other offices, and they are clearly bringing the average down. Houston, on the other hand, is heavy on project finance, private equity, etc. and has been very busy recently, and has a much leaner, smaller litigation group, and no restructuring.

White Girls With Asian Guys

12:49, I think your numbers only apply to New York. The rest of us got the big raise THIS year, not last year. So your numbers should be 10K for 2006, 25K for 2007 for major markets other than NY.

So -- with a trend like that 35K is not inconceivable.

White Guys With Asian Guys

More Queer As Folk!!!!

Howrey’s First-Year Texas Associates Earn $160,000
By Anne K. McMillan

Texas Lawyer

Tuesday, July 3, 2007

Washington, D.C.-based Howrey has bumped its starting salaries for first-year associates up to $160,000, effective July 1, Houston managing partner Steve Cagle says. The 635-lawyer firm also is ramping up work on a new merit-based compensation plan that will replace the old lockstep system of providing raises.

“I really love the fact that people are going to be able to make the choice of their own career path,” Cagle says. He notes that the merit-based plan will provide associates with choices they’ve indicated they want — accommodating those who want to bill 2,400 hours per year and make partner as quickly as possible as well as those who want to bill 1,900 hours per year and have a life outside the firm.

In addition, Cagle says, the merit-based system will “place a lot of pressure on the partners in the firm. . . . [It] represents a significant commitment on the part of partnership to get more involved in associate development.”

Focus groups, including several to be held in the 60-lawyer Houston office, outside consultants and the firm’s powers that be are working out factors for the merit-based system, which likely will include criteria such as productivity, quality and entrepreneurship.

Cagle expects the system to be in place by the first of the year.

When will Texas move?

> as well as those who want to bill 1,900 hours per year and have a life outside the firm.

i.e., unemployment

I see the Howrey recruiters are posting that insipid article again. Let's get our facts straight:

1) 1st years now make more than many 2nd years. Way to create a hostile work environment.

2) a good number of associates will end up making less next year than they did last year.

3) No way total associate compensation will increase under this plan. Only a select few gunner types who pad their hours more than most will benefit. Apparently this is exactly the type of person Howrey wants working for them.

4) Good luck recruiting new associates and good job making Howrey more of a joke than it already is.

195 makes sense if the raise is simply meant to distribute the bonus over the entire year.

If they want to make a statement, anything beginning with a 2 will do for obvious reasons.

It would be easy to justify: salaries paid on wall street, salaries paid to associates in London and Frankfurt given the wonderful $ to £ or € exchange rate (thanks Bush).

7:27, you're a moron. Two numbers does not make a trend. I love stupid law student math.

8.58:

You get post of the week:

Only a select few gunner types who pad their hours more than most will benefit. Apparently this is exactly the type of person Howrey wants working for them.

12:35, YOU'RE a moron. Calling names does not make an argument. I love stupid non-law student/non-lawyer "debating skills."

The purchasing power of 160k in New York is probably equal to the purchasing power of (Insert some lower number here, i.e. 140k) in Houston, Atlanta, Delaware.

Just because people are being the same amount of real dollars doesn't mean the value of their salary is equal.

Purchasing power in Manhattan is probably lower than purchasing power in Brooklyn. Should associates that live in Manhattan be paid more than associates that live in Brooklyn?

4th years in Atlanta make between $145 and $147k. Starting at$130k, that means annual raises barely beat inflation.

Welcome to th world of compression.

I heard that similar rumors about a raise were swirling in halls of White & Case.