first

Lat,
Can you call Aaron Charney and find out what he's up to these days? Last I heard he had to sell his apt.
Where is he living?
How is he supporting himself?
Does he have any hope for the future?
Does he regret complaining about the alleged poop comment?
Does he understand the meaning of "Don't know what you've got, til it's gone?"

Re: Charney
http://youtube.com/watch?v=7QiYTUGmYcI

does anybody have the math skills and knowledge (i.e., how many senior associates work at S&C) to figure out each associate's share of $2.5 million?

when "math skills" equal the ability to do simple division you know the country is f-ed.

Does this mean, assuming this type of senior associate compensation structure spreads to other big firms, that those of us more junior than 5th year are not going to be getting salary bumps any time soon?

Rather than split it, the associates should run a raffle and give it all to one person.

This should up the ante for firms with significant compression.

this is the alternative to 190k imo

I like 3:19's suggestion

David Lat sited outside of Dickstein & Shapiro DC, to what do "we" owe that visit?

Works out to be about $10,000-$15,000

anyone think any other firms might take this approach? or does this really only matter to those breathing rarified S&C air?

This seems to be an opaque way to raise senior associate salaries, but without any transparency as to the exact amount for each year, it seems unlikely many firms will follow suit in any meaningul and verfiable way.

spread like wildfire!!!

Insurance to 100!

Does this plan effectively turn senior associates at S&C into the equivalent of junior parters at other top shops?

3:08,

For whatever it is worth, according to the website of the NY State Court system, Charney is still registered as an active attorney with S&C. In other words, he hasn't notified the Courts that he has taken employment elsewhere or started his own practice.

3:33,

Sited? I presume, you meant that Lat was sighted outside of D&C.

You all realize what this means right?

Now, instead of asking associates to leave in the 7th or 8th years, these firms will force them out in the winter of the 6th year, just weeks before they were to receive their 5th year bonus.

And of course, that money doesn't get dished back into the associates pool.

Agree that this is the alternative to 190 -- and it is a good one. This is the way to keep senior associates (who actually know what they are doing and make money for the firm) in BigLaw.

And no, I'm not a senior associate. Just think it is crazy to start people who are clueless (first/second years) at higher and higher rates instead of rewarding them (us) when we actually develop client relationships and experience. Hope this spreads to more firms.

"in February of each year, when the Firm's results from the prior year are known"

So the December bonuses are determined without regard to results?

Amen, 3:45, Amen!

Sounds like a way to keep associates around until the spring, rather than have them leave after year end bonuses are paid.

This sounds like a populist measure to me. Let's say the PPP at S&C is 2.5 M a year, you are basically just "creating" a "partnership" whose members are all the senior associates. An (unwanted and unsolicited) increase of 10-15K is always welcome, but com'on, it is just peanuts compared with a real increase to ALL associates, i.e. NY to 190!!
Is this a measure intended to get some Lateral talent after all the bad publicity the have gotten from the Charney affair?

Also of note is that during a recent callback to S&C, I was told to expect another round of pay raises to $200k in early 2008, and I have a number of friends who were similarly informed.

Can anyone else confirm what 4:05 has stated - Lat, can you look into this?

If associates don't like the compensation math of big law, then associates should put their law degree to different use. It really is that simple. The new math is this. Get paid a lot of money and be expected to work your tail off. And on top of that, do all the things necessary to develop into a well-trained, trusted legal advisor and can not only serve clients very well, but also generate a lot of profitable business for the firm. If you can't do those things, then prepare for a life as a reasonably well-paid service lawyer or doing something in the corporate world or in government/public service.

Retention through ambiguity. If you want to go, I wouldn't advise sticking around just for this. If you want to stay, hey, good times.

Lat,

Can you make a printable version or a version that can be copied so associates at other firms can put this in the right hands? This is a brilliant policy.

4:05,

I heard the same rumor, but I did not really believe it.

4:16: Just save the memo as an image, then print the image.

Given the revenue per lawyer, S&C associates are getting screwed. This is a pittance. Glad I'm not working the extra hours there and am (for now) making the same money.

Cravath probably has similar RPL to Sullivan, but they're not doing this.

4:37,

You're right, which make Cravath even worse than S&C.

The amount seems small when you compare it to bonuses (or partner profits), but when you look at it as a raise to undo the $10-15k per year compression for more senior classes, it's not that far off.

When I say "not that far off" I mean that it doesn't take into effect the cumulative compression - this is not a $10-15k per year of seniority raise, but total. It gets less attractive the more senior the associate.

10-15? No way. Flexibility in the distribution is built into this and will matter -- read the last bullet -- producers will get more money, most likely with non-producers being told in a more subtle way that partnership is not on the horizon. That said, first years to 110, seniors to 300.

This is any interesting move. At 10-15K it's almost a token amount for associates earning 230-280K (after taxes, 6-8K on average - less for 5th years, more for 7th years).

I mean, it's better than a slap in the face, but it isn't close to a partnership draw, nor is close to a finance industry compensation.

And, since it's discretionary and uncertain, it's not the same recruiting tool a starting salary raise is.

Is there something I am missing here?

Re 4.59 - It's actually only 10-15K on top of 285-345K once you factor in the bonuses (assuming 2006 levels). So, maybe 5% on top of existing compensation expectations?

Lat asks: "Will this make the S&C pay scale, at least as to senior associates, more like that of Wachtell?"

Not at $10K-$15K a pop it won't.

Can someone explain where that range comes from? Are there really THAT many S&C senior associates running around?

Quick check of the S&C website shows there are 81 people in the various "counsel" categories, and 372 associates total. Not sure how many are 5th years and above. So, let's guess:

If you start with an 1st year class of 80 and assume attrition of 10 per year, that gets you 80+70+60+50+40+30+20+10 = 360 for the 8 years, which is about right. Class 5-8 total 100.

Add them to the counsel and you have a pool of 181. Divide into 2.5 million and you get a little under 14K.

Anyone care to correct my assumptions?

WSJ law blog provides further detail -- Apparently Cohen has stated approximately 125-135 attorneys will split the first bonus pool of roughly 2.5 million. That works out to roughly 18 to 20K per associate (assuming an even distribution, which, as someone has pointed out, may not be the case). Cohen also took no public position regarding salary increases (not surprising).

for having absolutely no information, that was remarkably good.

Cohan also apparently indicated to the WSJ Law Blog, that the bonus, as prior posters suggest, will be weighted toward "more senior associates."

15k=not much. Anyone else think this is just a ploy for "good" press. Sources tell me that recruiting season has been horrible and the lateral world hasn't been much better.

I'm guessing they do this knowing that 15k isn't going to make anyone happy at S&C but at least 'word on the street' across law schools is that S&C came out with an extra bonus.

Ultimately, I doubt my firm or others will think its worth following...Let's go 190k!!

Most interesting line from the WSJ blog:

"As for possible future base-salary increase for all associates, [Cohen] said the firm wouldn’t debate such matters for another month or so."

If that isn't intended to flame the fire of associate entitlement, I don't know what is...

Lat - Cohen speaks to the WSJ blog but not you?! That's what you get for being on Team Charney, I guess...

It will be interesting to see if S&C still lags Kirkland even after this new bonus. Could someone post the differences in total comp last year between S&C and Kirkland at the senior levels?

Bonus at Kirkland was way higher - talking $70-$105 K higher depending on year (and that's factoring in the new $15-$20K S&C bonus)

My Kirkland bonus paid off my school loans AND my '06 Bimmer. No shit.

I don't think you can collect the K&E bonus until June or July, though.

We really need a bonus thread. How they are determined (lockstep, hours based, performance, etc) and how much is paid out. With salary bases the same, the meaningful differences between firms gets played out in bonuses (but that's the least transparent component of the associate compensation package). Have heard that NYC is generally much higher than other markets, and that some firms cancelled bonuses with the raise to 160K. Have read here that of the non-Wachtell firms, Orrick and Kirkland are the most generous?

Agreed. Create me.

$10-15k, $18-20k, doesn't really matter. It is a step in the right direction for dealing with compression/making senior people feel special, but it doesn't change the fact that the laws of supply and demand require salary increases in the near future.

lol@people crying about an extra 10-15k

5:53: Are you talking about bonuses for associates or for non-equity partners at Kirkland? These numbers seem way too high for associates.

5:53 is a legal recruiter for Kirkland.

I think it's about time that NYC first-year associates get a raise to $190K. Why should we get paid the same as people in Chicago? How is this right? For the love of God people, stand up for our rights! At least the V30 firms should do something. NYC OFFICES to $190K ARE YOU WITH ME PEOPLE?

Oh, and this S&C thing is funny. $15K making a difference when ibanking peers make about twice the money? C'mon!??

Don't they just call sixth year associates and above "partners" (non-equity) at Kirkland?

LA to 200k!

non-share partners at KE (yrs 6-9 or 10) are the equivalent of 6-10 year associates at firms without a two-tiered partnership

2006 Kirkland bonuses: http://www.infirmation.com/bboard/clubs-fetch-msg.tcl?msg_id=0035kz

And they're paid at the end of December.

I think NY first years should pay part of their salary to seniors while getting kicked in the sack for being beyotches.

6:54, you've obviously never had another job. First years work hard, but it is not something that a good paralegal or trained orangutan couldn't do...and you have to go through first year to get to the more senior levels - so why accommodate whiners? Pay to play. You want a banking job...go get one. They can en masse in a downturn. We are more genteel in the law and do it one at a time!

So here is the spread between S&C and Kirkland without the new S&C bonus:

Grad -- S&C -- Kirkland
Year -- Bonus -- Bonus -- Difference
2002 $50,000 $ 82,000 $32,000
2001 $55,000 $ 90,000 $35,000
2000 $60,000 $114,000 $54,000

Base salaries are the same at both firms. Therefore, differences in bonuses account for the entire difference in total compensation. Kirkland bonus amounts reflect the median bonus. the highest Kirkland bonusus for the classes of 2002, 2001 and 2000 were $133,000; $108,000 and $140,000, respectively.

I'd appreciate if a Kirkland insider wouldn't mind answering the following questions; this seems like a great firm.

(1) Do every 6th year associate at Kirkland gets to be a non-equity partner or do they ask the not so great associates to leave at that point?

(2) Can senior associates (e.g., 6th year) at top NYC firms ever get hired as non-equity partners at Kirkland?

(3) Do non-equity partners at Kirkland typically get asked to leave by their 10th year or so if they don't make equity partners, or can they just stay on as non-equity partners and enjoy a higher salary than senior associates at any other firm?

Also:

(4) Can non-equity partners pretty much figure out their odds of making equity partner based on their bonus (something that senior associates at other firms can't do when they all get the same bonus)?

To 7:48. Wrong on all counts. Thanks for playing! What I would prefer firms to do is bonus more aggressively. But since they will never do that, they should bump starting salaries. They made this mess competing in secondary markets for talent through salary hikes rather QOL marketing. They now have to bump the $$$ market (NYC) to $190K to differentiate it effectively. Otherwise people will MOVE "en masse" to secondary markets after getting a taste of NYC for a year.

8:02/8:04:

(1) Most 6th years become non-equity partner. By then, the poorly performing associates or the mess-ups were already "encouraged" to leave

(2) Only in very unusual situations

(3) Non-shares are generally asked to leave anywhere from their 9th - 12th year if it has been decided that they are not going to make equity partner. Alternatively, if they have been up twice for equity partner and have been passed over twice, then they are asked to leave. Some exceptions, but this is the general rule.

(4) People usually know by their 10th year if they have a legit shot at share partner. Bonuses will reflect this because such attorneys will be rated "above their class" or "top of their class" (which adds anywhere from $15k - 100k+ to someone's bonus), and they will also know it through their annual reviews.

Akin Gump NY gives a 60k longevity bonus after to sixth years. This dwarfs S & C's recent move. And Akin pays above-market bonuses.

The kirkland numbers are bullshit, unless they have a different structure in the NY office than elsewhere. I summered there and there were MANY associates who had bonuses between 2K and 10K. So, I don't know here this $25K bottom number of the range comes from.

The Kirkland numbers are correct, at least for the chicago office. I earned a 60k bonus as a 2nd year. All you NYC associates are idiots...

how many hours did you work for the 60K, and were you above the class?

No one cares about Kirkland. First off you have to swallow your pride and work for Kirkland. Some things don't wash off in the shower. This is one of them.

11:21 that made no sense

9:54

Yes I was above the class. Billed about 2250. Not sure what the class average was but it was lockstep at 18/20/22/24 so there were certainly those who got even more.

talk about the news you can use!

Yeah some bonus info would be useful Lat (and VERY much appreciated).

It does sound like Kirkland has the best. Followed by Orrick and the NY firms, then huge steps down and down and down (from MoFo -----> to Heller).

I would love to see some hard numbers and comparisons...

60K for 2250 as a second year is unbelievably good. I think second years at my firm earned $20,000 -- if they hit 2400 billable. Four times as much for 150 less hours is downright demoralizing (for us, not for you). Please, please, a bonus thread. We need this kind of info.

That should be three times as much. Sorry, am very tired.

From the NYLJ:

"A Sullivan & Cromwell partner who asked to remain unnamed said Wednesday that the supplemental bonuses would probably range from around $15,000 for fifth-years to around $30,000 for eighth-years. With the supplemental bonus, the most senior associates at Sullivan & Cromwell can expect to earn total compensation of around $400,000, based on the current top base salary of $310,000 and last year's $60,000 year-end bonus."

dying

9:17 - that may have been true a couple of years ago (in a non-NYC office), but as of last year K&E went to a firm-wide scale with a min bonus for 1st years of 25k (at 1700 hrs). The numbers people have been throwing around are accurate (search for the 2006 K&E bonus chart in the ATL archives).

9:17 - you are wrong - NY KE office has higher bonus than the other K&E office (e.g. the bonus was set at 35K for 1850 hours, and adjust up and down from there based purely on hours because nobody gets ranked above the class 1st year)

Here is the link to that NYLJ article: http://www.law.com/jsp/article.jsp?id=1190192576964

Where does the 310K number come from? 265K for 7th years is the highest on the Xoxohth table.

9:28 - You guys in NYC might get some sort of slight bump on the scale (I seem to recall something about that in the mtg last year), but my point was that the min was 25k (in response to the 2-10k claim from 9:17). Chicago was approx. 35k for 1900, so your adjustment doesn't seem to be particularly significant.

in others word we are going to make the carrot look that much bigger

Very smart on S&C's part. Seniors are the most valuable associates, and typically the most overworked and likely to leave the firm.

I wonder what firms will match.

I agree with plenty of comments here (about the original topic). But consider other issues/POV's:
1- Cohen said that the money won't be divided evenly, i.e. skewed to 7th and 8th years. Meaning that 5th years will probably get 12 o 14 K gross, while the lesser number of 7th and 8th years will get 25 K or so.
2- This is actually a smarter move in terms of throwing money at the associate retention problem. If you raise salaries across the board, junior associates will leave faster because they will have paid off their loans sooner. Ergo, raise senior associate "salaries" (total comp), so you keep your more senior talent, and don't raise across the board.

Come on, people... When did $10-15K become meaningless? It's still a lot of money for people our age. Also, S&C partners don't HAVE to give people more money to stay at S&C. People stay there because they like it there. No amount of money could make you stay at a place you're miserable at, especially if you work wicked hours. Case in point: Wachtell.

Good for S&C for doing something to TRY to dig themselves out of a bad situation.