First?

Simpson Thacher should preempt Skadden and raise first. It is inevitable that one of the NY powerhouses will raise, and then the top firms will match, so why not do it now to grab the publicity?

First!

Wow. You have no better stories to cover than this? This is garbage. And OLD news . . .

Who really cares if Simpson or Skadden or SullCrom matches first. The real interest will be down the list and in other markets. At some point there's got to be a firm that either 1)says we can't afford to raise and has an associate mutiny or 2) can't afford a raise, gives one anyway and has a partner mutiny or 3) can't afford a raise and jacks up rates beyond what people are willing to pay for that firm and implodes.

As to which scenario is most likely I don't know. But partners are probably still sore about the recent 145-160 hikes after years of the steady 125 pittance and they're not going to like another round at all.

Fourth! yeah baby

NY to 250!

I absolutely guarantee that the talks of these raises are just make-believe by greedy law students. With the pathetic state of the market, and low consumer confidence, everyone is very cautious with their dollars. With businesses looking to reign in spending, guess where the biggest cuts will happen - let me guess - legal costs! Already many big businesses are decreasing the amount of work they give to outside law firms either by hiring my in-house counsel or sending their work to lower cost firms in the South and the Midwest.

In essence, NY to 190K is not happening anytime soon (read before 2009 at the earliest). Just hope that BigLaw does not start firing associates, a rumor which has more legs and for good reason…

I meant "more" in-house counsel, not "my" in-house counsel...

Mets to Pathetic Collapse!

What's unsaid in this article is that when DC matches NYC pay, the associate's compensation (not to mention quality of life, housing, having a car, etc.) goes a LOT further in DC, so it's really like being paid MORE to have a better life in a non-NYC market.

Come on lat - Only tier 2-4 students have time to read Harry Potter.

I'm just a lowly Harvard grad with a JD/MBA from Michigan.

I've heard rumors of "an increase" (not sure to what) in about four months. I'm guessing $180.

Willie Randolph to 5 over par!

NY to 190k...Mets to the house.

I hear you 1:04, let's hope BigLaw's collapse isn't as spectacular as that of the Mets...

even at 70 hours per week, i'm certainly not worth $160k...but several firms out there are willing to pay it. lat's conclusion is right--the top firms are going to attract top talent, and the lower firms are essentially overpaying.

Google to 600 before NY to 190. So obvious.

1:28...I'm worth every bit of $160...time to go wipe my a$$ with this $100 bill...

I shit appellate briefs.

"According to an internal memo obtained by the blog Above the Law, Kilpatrick Stockton announced raises for all associates-all, that is, except those who work in capital markets."

http://www.law.com/jsp/tal/PubArticleTAL.jsp?hubtype=Inside&id=1190883782960

Seriously?

What about the rumors that Latham is laying people off? Is that true? Lat, get on that.

NY firms to 190!

NY Yankees to 27!!!

"even at 70 hours per week, i'm certainly not worth $160k...but several firms out there are willing to pay it. lat's conclusion is right--the top firms are going to attract top talent, and the lower firms are essentially overpaying."

Really? You aren't worth it? Multiply your hourly rate by the number of hours you billed. Pretty big number, isn't it. You only get paid about 25% of the revenues you bring in. Feeling pretty stupid aren't you? You should.

Not sure I agree that the lower ranked firms are getting the same people they would've gotten if they had stayed at 145.

Some law students have done their research and are informed about prestige, quality of life, quality of work, etc., but I've been surprised by how many of my top-ranked classmates don't know much at all about firms' reputations and are making their decisions based solely on where they liked the people who interviewed them the most. And for the most part, they're only considering the 160k firms.

I could definitely see them turning down a firm ranked in the top 10 for a 16o paying firm ranked 90th if they thought the 90th ranked firm had "cooler people." I think a lot of them haven't even looked at rankings.

1:54...you don't know...stop running it!

1:57...I don't get it...what am I running/ruining?

"Law students pick firms for reasons other than just pay -- e.g., prestige, quality of work, etc. Why should a firm in the bottom half of the Am Law 100 struggle to keep up with the Cravath pay scale, when it probably won't get Cravath recruits anyway? Are non-top-tier firms paying $160,000 to first-years, but ending up with the same people they would have gotten at $145,000?"

Anyone think lower ranked firms will move salaries down once they realize top tier students aren't going to work there even though they pay the same as top firms.

1:50, you're the one who is stupid. In addition to salary, law firms pay for health insurance (including dental), costs for having a secretary and a paralegal, costs of overhead such as a blackberry, computer, internet, utilities, rental space, and westlaw access. If you were to break down the big costs (rental space and westlaw) pro rata, it would still be significant per associate. This means that your simple multiplication and division theory does not hold through b/c the cost of hiring an associate is FAR greater than just his take-home salary. Now who's stupid, stupid?

Regarding D.C. firms, I guess Williams & Connolly has "given up the chase."

1:50, you're the one who is stupid. In addition to salary, law firms pay for health insurance (including dental), costs for having a secretary and a paralegal, costs of overhead such as a blackberry, computer, internet, utilities, rental space, and westlaw access. If you were to break down the big costs (rental space and westlaw) pro rata, it would still be significant per associate. This means that your simple multiplication and division theory does not hold through b/c the cost of hiring an associate is FAR greater than just his take-home salary. Now who's stupid, stupid?

2:05, W&C is different- people there actually have a shot at making partner if they stick around, so the bonus is kind of "deferred." I don't think a person is leaving money on the table by taking an associate offer there.

to 1:41--

The capital markets people were already being paid the higher salary, so it's just that now all of the practice groups are getting the same (higher) wage.

2:05 (the stupid one):

I never said that there were no overhead costs associated with running a law firm. Check your firm's profits per partner. They make ALL that money after paying for your blackberry and health insurance. Idiot.

ATL is finally getting back to the bread and butter. Nice. I thought the article made decent points (vis-a-vis reasons for the last raise) not previously discussed here.

The real question is when a raise would happen. It's going to be a while after this latest meltdown. But maybe top NYC firms really do intend to use this as a tool to harm pretender firms.

ANON (1:04) gets it wrong. Firms will spend for bet-the-company litigation (which doesn't matter much here because litigation doesn't drive salary increases) and banks will pay for capital markets work (to the extend there is work). Besides, the banks make so much on deals compared to lawyers they seldom question bills. All the client furor banter is misguided or limited to smaller clients that don't matter to this salary discussion. (We're talking about a relatively small percentage of associates making big money.)

$160k is like those fancy iron mailboxes in subdivisions.

No one can see your shitty furniture, bad plumbing, leaky roof, or advacado-green kitchen until they come in.

However, with a budget mail receptacle everyone can guess your failure from the road, regardless of what is inside.

Latham is laying people off? WTF?

2:22 --

Nice...

The fact is that, at some point, the NY firms WILL succeed in separating themselves from the rest of the AmLaw 200. And salaries will be part of the reason. There is no way that an LA-based firm like MoFo, that already cut bonuses to afford the raise to 160, can affort to meet...190?

If S&C, Skadden, or any of the large NY M& pwoerhouses decide to push to $190 or higher, of course some firms will be left behind. Assuming BigLaw means the AmLaw 200, the fact that there are 200 firms says it all: not every firm can be the biggest, or most profitable, or pay the most.

Once the next pay raises come through, though, expect to see quality of life and partnership prospects take on greater importance in recruiting. If I have a 1 in 50 chance of making partner (and $3 mil a year) at S&C, but a 1 in 5 chance of making partner somewhere lower in the AmLaw 200 (and making only $1 mil a year), I'll take the relatively sure thing, and eat the salary difference.

So would you, even you gunners.

Mofo is not LA based.

I'm with 2:50. $160k scale is plenty if I even MIGHT make partner. But if it's going to be banker-style burnout and attrition then I'll need to get paid more so I can take my money and run (again, banker-style).

Wow - what a broad mix of intelligent and stupid posts.

Like many of you, I think the next raise may start to force law firms to differentiate themselves. This is a very good thing, but also pretty scary. (Remember, the firm you are at may differentiate itself in a way that is not to your liking.) As has been discussed ad nauseum here, there are the $160k shops and the $60k shops, with not enough in between. If some of the $160k shops become $200k shops (mine probably will not), other firms that "cannot afford it" (and I use that very loosely) will be forced to brand themselves in some way to attract talent (or just do nothing and watch their good associates leave).

Firms will become known for better benefits, lower hours requirements, prospects for advancement/exit opportunities, or whatever other traits the firms may want to leverage. The fact that firms have not started doing this already indicates that they CAN afford pay increases (and it is worth it to them) and, therefore, we are NOT overpaid.

If firms really start to separate themselves from each other, there will be better chances for assocaites (and partners, even) to find the right "fit," rather than relying on BS brochures, interviews, or rankings that are really only good for limited purposes.

Cravath is full of a-holes...i prank call their 1st years and they get peed off

Why isn't anyone talking about the simple fact that it costs more to live in NYC vs. almost any other market? Someone did point out that $160k in DC provides a much better quality of life than $160 in NYC. As a NY'er, I think the people in DC or Chicago (or any other market other than SF) making the $160k scale is way better off financially.

Raising first year pay is ridiculous. As is raising second year pay. First and second years across markets and firms don't have the experience or skill set to really contribute to the firm's bottom line. Plus, paying us more at these levels will just encourage/enable us to jump ship faster.

What firms should do is address compression at whatever point an associate usually starts to make $ for the firm and to be a real asset (I've heard third year at my firm) and to give healthy bonuses for performance (both firm performance and associate performance). That way, firms will attract summer applicants who want to stay at the firm longer term and will retain the associates that they've trained. They might even score a few laterals.

(And Skadden being the first to raise first years would be woefully misguided. Has Skadden reviewed the number of associates it loses between years 1-3? When was the last time you heard a BigLaw midlevel clamoring to transfer to Skadden? I've never heard it, although I have seen plenty of friends leave Skadden for other firms. Skadden's problem does not lie with attracting top talent; it lies with keeping it, or with attracting laterals.)

Sorry, should be "are way better" not "is way better"

Firms also pay for legal malpractice insurance and training. And, let's not kid ourselves, a LOT of first and second year associate time is written off clients' bills.

You are all stupid. Who gives a shit what you wankers make? You are the most over-paid collection of notalentassclowns out there. Too bad you don't have the creativity to do anything else but be a lame ass professional note taker or research monkey. You actually think you are worth half of what you are paid? Idiots.

3:41 is a big firm partner trying to convince associates that they are not worth anything so he won't have to pony up more money.

Um...what are these Latham layoff rumors floating around? Lat please investigate.

You cuts 3:41. You cuts deep.

3:18 is right on the money. I say bring in on. Compensation differences among peer institutions are standard in all other industries - and are also standard at top law firms in the UK.

In case anyone was wondering, King & Spalding Atlanta wants no part of the talent war. It won't even throw in a bid. Across the board pay raises starting sweeping the country in May, and here we are in October, with not a word about what anyone (other than first years) will be paid in 2008.

Then again, it is a brilliant short-term recruiting strategy. If the firm announced that it will continue to compress the hell out of the pay scale right now, it might be difficult to sucker the few law students who are still, for some unknown reason, interested in coming here. Better to say nothing, relying on the students to naively believe the pay will be competitive. By time they become 2d and 3rd years, they'll barely notice that they're paid at least $20-40k less than associates in Charlotte, Houston, DC, NYC . . . pretty much anywhere else.

Discussion of what associates are "worth" is idiotic without first putting what "worth" means in context. $160K is nothing. People in the mortgage and real estate industry were, and still are, making tons more than junior associates at big law firms. Do I think they are "worth" it? Hell no. But that's what the market pays. If a few firms say that the market should pay us more than $160K, so be it. And I'm worth every penny.

Discussion of what associates are "worth" is idiotic without first putting what "worth" means in context. $160K is nothing. People in the mortgage and real estate industry were, and still are, making tons more than junior associates at big law firms. Do I think they are "worth" it? Hell no. The only smart move they made was not going to law school. But that's what the market pays. If a few firms say that the market should pay us more than $160K, so be it. And I'm worth every penny.

Latham isn't laying people off.

Think agaion 4:06. It is going to happen.

Speaking of DC, does anyone know why the managing partner of Alston & Bird DC and several other partners are leaving the firm to go to DLA Piper?

Re JC's comment - I am begging people not to start the cost of living/which city is cooler debate again.

To summarize the hundreds of comments on previous threads: (1) cities have different costs of living (see CoL calculators on the web); and (2) everyone thinks their own city has advantages over other cities.

D.U.N. Done.

My guess, 4:14, is that DLA tossed lots and lots of money at them. Generally that's all partner moves are about.

I'm a second year at UVA and I just want to say that if New York doesn't raise to 190K, then I'm not sure if I'm going to accept any of my offers. I might just get my degree and try and get into I-banking. 160K is so TTT.

This "190k" number has no basis in reality. Why should NY associates enjoy a 30k advantage over associates in LA, DC, Chi, SF/SV, and Boston?

Leaving aside Kirkland, NY associates already get higher bonuses.

Yes, perhaps salaries in NY should be a bit higher to account for the housing cost, but not 30k higher. If anything, it should (and likely will) be $10k higher, as it was in the "Pre-160k Era" (i.e. 145k v. 135k). Or maybe 15k, as it was in the "Post-160k But Pre-Top-Tier-Markets to-160k-Era."

Atlanta to 35k!

I hope Skadden raises because it would make it a lot easier to decide whether to accept my permanent offer there! It seems like now would be the perfect time to raise because firms that are having trouble because of the credit markets will have an even tougher time meeting the raise than before.

Whether you'll get the same quality of recruits despite not raising depends on how many of the other firms raise. If you ask me, the firms still at 145k have become untouchables. I wouldn't go to any of them unless all the 160k firms rejected me. Even if the 15k isn't that big of a deal, not paying market is stigmatizing for a firm. If there's another round of raises and enough firms match, the firms that don't raise will become a new batch of last choice untouchables.

5:08-
the bonuses at these large national firms are the same nationwide; there's no advantage to being in NYC aside from the chance at having better work if that's where the mothership lies.

4:00 or should I say studdering 4:00/4:01 = If you actually think you are worth every penny, you are the most delusional of all the wankers on the board. You entitled little prick. Enjoy your miserable life.

By the by, just love that you don't know how to use a computer. Clearly you are worth every penny. Or was that your secretary's fault???

I'd also like to add that last year after a bunch of firms had raised, but mine still hadn't, I was already planning on bailing on my firm as soon as possible. My firm ended up matching though. I don't want the stigma of working at a firm that doesn't pay market.

5:48 - you're the only wanker on this board, and you probably walk around speaking in a fake british accent because you're a prick. My life is hardly miserable because I work at a great office with good work and a pretty balance life.

Sorry the double post got you out of whack. But it still doesn't change the fact I'm making good money and you're an idiot.

5:47 - "[T]here's no advantage to being in NYC aside from the chance at having better work if that's where the mothership lies."

Except that it's New York City.

Q.E.D.

Aiight, back to work. Respondents' briefs in the First Department are due Wed. November Term, bitches!

5:46 is right. If the next round of raises is followed by most firms, they will be in line behind all other firms paying market. I don't think firms can compete on hours or lifestyle because if they could, they would already be doing so. That means firms have to compete on salaries or qualifications, and I don't think anyone is hiring L2L (L3L?) anytime soon.

Firms can compete on hours or lifestyle. It is counter-intuitive, however, that it could be profitable to do so and BigLaw partners are such bad business people that they have trouble even grasping intuitive concepts.

5:47 -- Many firms pay higher bonuses in NYC than in LA, SF, DC, Chi, Boston, etc. And, NYC bonuses are guaranteed, where the bonuses elsewhere are often performance/hours based.

I know a few people that turned down Cleary, Weil, and Davis Polk for places like Perkins Coie and Dickstein Shitperio, because they "liked the people". I know they would have cared if they paid a little less. It blows me away how stupid smart people can be.

I'm with whoever said that it's stigmatizing to get paid less than market. When we're talking about the difference between $160k and $175 it's not about the money, especially after taxes.

The low bonus-payers, the non-raisers, and the pseudo-raisers are all untouchables to me right now. I don't want bosses like that to be in charge of whether I'm paid fairly over the next 7-10 years.

As a 3L getting ready to start out, I'd be embarrassed about going to a firm not paying market. I agree with that there's a stigma to it. When you're talking about $7500 after you get raped by ny taxes, it really isn't much of a difference financially.

When I was choosing which firms to apply to last year, I avoided all those paying below market (even though it was just by 10K) like the plague.

Who cares what we're worth? 'Worth' is a relative concept in a free market and if firms don't want to pay, I'll go to ones that do.

Top firms V5 maybe v10 should distinguish themselves by paying more. It's absolutely demoralizing to know you've worked hard and done well in law school so that you can go to a firm and work harder and work longer hours for the same pay as your classmates who screwed off in law school and got worse grades.

Where is the justice???!??!?!

If some big firms can't keep up with the next round of raises, it will likely drive more people to boutiques.

I'd rather work for a boutique that pays 120 than a BigLaw firm that pays 145. That way I can at least say I went there for the increased responsibility or for a certain practice area. If you're at a BigLaw firm that doesn't pay market, it's pretty obvious that you just couldn't get hired at one that does pay market.

Galveston to 190k! (With an ass grabbing as a bonus!)

The very smartest firms will let associates work for 1800 hours or less for lower pay, but with the same partnership prospects as others.

Even after the next raise, I would be happy to work 1800 hours and get only $160K. If only some of the more prestigious firms offered this (and not just on paper - its often a career dead end at places that have it).

10:56, there is no justice. I am just glad I chose b-school and went into banking, thus avoiding this lockstep nonsense.

My friend is first year at Simpson, he has seen a memo (which was suppose to be announced at oci this year). He doesn't know why they held off, but he said it is definitely going to happen before december.

I enjoy comments like "I know people who actually chose to go to firm X over firm Y just because they liked the people at the firm." I have to believe these comments come from law students who have never worked at a real job before.
Try working for a month or two and you will realize that liking the people you work with actually matters quite a bit. And here's a shocker, attorneys don't walk around the office high-fiving each other over their firm's ranking in the latest Vault survey. Salary is a legit consideration, but "prestige" is highly over-hyped in law school.

I actually completely disagree with the "once you have worked a little bit, oh young and naive ones, you will see how important it is to like the people you work with." Yes, this is true in theory. However, those of us that have worked in banking, or even at biglaw firms with difficult people can tell you--YOU NEVER MEET THE A$$HOLES DURING RECRUITING. They are hidden. Everyone avoids talking about them. So all the "nice" people you meet are usually just droids the firms put out to create a false impression of the kum-bay-ya we're such a happy familty PR crap. I'd rather know that I am going to a firm with difficult people than get fleeced in recruiting. But that's just me.

I agree with 3:28, hating the people at Davis Polk is different than hating the People at Dickstein...one gives you some really nice exits, the other...well...

The interesting thing is the people picking firms based on the people forget that there is turn over (yes the nice people will LEAVE!!!).

It's also funny how many of these people say they don't even want to work at a firm for more that a few years anyway. So why not go to a firm that will get you the exit you want.

Worth has NOTHING to do with pay and is a pointless argument. Teachers and Nurses to 190k then!

For example, my girlfriend works for a lender in subrime originations and refis. 1 year ago, working from her bed she was making 35k+ a month; her brokers 3x that. Just raping people and providing near ZERO value whatsoever-just tacking on points to loans for greedy opportunitistic and overzealous borrowers. Granted times are MUCH different now , but charging whatever price the market will bear is the issue, not whether someone is worth what they are paid.

12:52 AM -- Firm memo in hand: it says you are insecure and a moron.

3:28 AM -- I am pretty certain that I encountered some miserable people when I was interviewing. And you might be interested to know that with all the callbacks firms are doing, they can't afford to be too selective with who does the callback interviews; they simply need people to fill the time slots. In other words, they need attorneys to conduct interviews; while they weed out most of the the really wretched people, plenty of the people interviewing aren't always selected as the "best" faces for the firm. They just need bodies.

I'm not saying you shouldn't pick a truly top firm because you met some nicer people at a low-ranked firm. But outside of a handful of truly "top" firms, the rest pretty much fall into a big mass and are more or less the same, with some variations based on strengths in particular practice areas or in different regions. Between those non-"elite" firms, it does come down to the people. There really are differences in the kinds of people that different firms attract. Shame for you that you're unable to recognize it.

isiah to -$11.6m!

what is TTT?

Some of you juniors may not want to hear this, but it is likely that the bulk of furture raises will go toward keeping seniors around (see Sullivan's latest move). Firms make far more money off of these people than they do off of you, and they feel the sting much more when one of them leaves.

Also, there is at the major equity-only NY firms a gross disparity between what seniors make and what junior partners are paid. In many cases, a first-year partner makes 100% more (net of holdbacks - without which the number can be much higher) than an 8th year associate is paid.

In real dollar terms, this means that the pay gap between a first year partner and an 8th year associate is greater than the pay gap between a first year associate and an eighth year associate. That cannot be justified under any economic model (jp's bill at a 10% higher rate, at most), and it is not sustainable. Those of you that have worked in BIGLAW, ask yourself: is the difference in ability (added value, client service, etc.) between a first year partner and an eight year associate anywhere near the difference in ability between a first year associate and an eight year? Not even close.

Some of you juniors may not want to hear this, but it is likely that the bulk of furture raises will go toward keeping seniors around (see Sullivan's latest move). Firms make far more money off of these people than they do off of you, and they feel the sting much more when one of them leaves.

Also, there is at the major equity-only NY firms a gross disparity between what seniors make and what junior partners are paid. In many cases, a first-year partner makes 100% more (net of holdbacks - without which the number can be much higher) than an 8th year associate is paid.

In real dollar terms, this means that the pay gap between a first year partner and an 8th year associate is greater than the pay gap between a first year associate and an eighth year associate. That cannot be justified under any economic model (jp's bill at a 10% higher rate, at most), and it is not sustainable. Those of you that have worked in BIGLAW, ask yourself: is the difference in ability (added value, client service, etc.) between a first year partner and an eight year associate anywhere near the difference in ability between a first year associate and an eight year? Not even close.

third tier toilet

Has anyone heard anything about Bingham lay offs?

So where did this repetitive Latham layoff rumor come from in the first place, just to harp on the issue until we get a straight answer...