Anyone in biglaw get a pay cut?

[Anonymous]

Anonymous wrote:

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Anonymous wrote:My firm (20-30 range) has a global town hall today. Partners didn't get a draw this quarter and I'm thinking this will be layoffs, but I'm stupidly optimistic they'll start with paycuts.

Update: partner comp reduced by 20% for first half of year, hiring freeze, summer program will get dialed back (but not canceled), no salary reductions for associates or staff. Caveat re: layoffs/pay reductions - this is the absolute last resort; don't want to get there, but we really don't know how long this will last or how bad it will get so no blanket promise to never do so.

At the very least, reviews are going to get a lot tougher and there will be more “performance” terminations. No one wants to be the one to admit to Latham-ing associates, although Latham sure seems to have survived just fine.

What is "Latham-ing" an associate?

It’s when a firm lays off associates due to financial constraints or to boost profits but tells the associates fired that it was due to their poor performance. Done by most big firms.

Ah, okay. I'm not in the law profession myself but have plenty of friends who are, including a partner at Latham, so I was just curious.

Sounds about right from what I do know about big law!

Large law firms have devolved into a horrible cesspool. They need to follow a more corporate model and hire fewer people with a view to have them stay. Charge reasonable rates. Pay associates far less. Allow for more job security. Should devalue billable hours and value good work and team building etc. The accounting firms are like this. Big law can do it.

You aren’t wrong. The high associate salaries lead to high hours requirements and high rates and no tolerance for a dip in performance.

Haven't read the whole thread, but had to respond this post.

The current BIGLAW model evolved over the past 100+ years with the rise of corporations from the industrial revolution. Yet even before that, lawyers would often hire young "clerks," burn them out or they leave to start their own firms, then hire a new crop of fresh clerks. This model works well for law firm partners, but not for clients. We will only see a change to the corporate model if clients demand it. Since only the largest clients generate continuous legal work, the ones with intermittent work won't care because all they're interested in is solving their immediate problem, then letting their in-house counsel handle the day-to-day work.

I'm sure folks will disagree with some or all of the foregoing, but that's not the larger point here. The OP was interested in pay cuts, which are happening, as they have happened before, and as they will again. Law firm partners are not altruistic and never will be if they can simply hire just-as-smart and cheaper talent when times get better (which they can). The real solution is for the number of law schools to shrink along with the number of law school graduates. But because law schools are cash cows for universities (i.e. they pay for the 17th century Central African dance department), this won't happen. The ABA won't shrink the number either, because it's dependent on the fees paid by universities to get accredited or keep their programs accredited (and the more lawyers there are, the more ABA members).

Not asked by the OP, but still important, is what should a young BIGLAW associate do today to avoid getting hosed down the line? Bill 50-100 hours over the minimum, then spend the rest of your time learning the ins and outs of the "business" of law. How to get clients should be at the top of this list (hint: it is about good service, but that's only a small part of it - anyone can provide good service). Never bill crazy hours and expect gratitude from the partners down the line. They've gotten their profit off you, so why should they give you any more of it? After not sharing enough times, they know you'll grow bitter, so it will be time to find someone new and "eager". Put simply, start thinking like a partner (owner) rather than an employee. If you don't, that's all you'll ever be.

May be foreign concepts to attorneys who are used to being fed work generated by large, institutional clients that hire BIGLAW firms.

Most people who go to law school don't have the entrepreneurial mindset. There are quite a few BIGLAW partners who strut around like they're the cat's meow because they earn $600k+ a year. Then they meet a potential new client who's 22 years old, sold his/her company to FB for a couple billion, and is starting a 3rd company. Funny how pathetic 20+ years of hard work looks in the face of that. On the other hand, the law is a (relatively) safe endeavor compared to business. Business people just have higher upside, assuming they own a chunk of their company.

[Anonymous]

Can people please stop writing BIGLAW in caps as though it's an acronym for something? It makes me think you have no idea what biglaw is, and it somewhat undermines your positioning yourself as someone with biglaw experience, as well as just being really annoying to read.

[Anonymous]

Anonymous wrote:Can people please stop writing BIGLAW in caps as though it's an acronym for something? It makes me think you have no idea what biglaw is, and it somewhat undermines your positioning yourself as someone with biglaw experience, as well as just being really annoying to read.

I thought it was just to emphasize the BIG-ness of BIGLAW If went to keep it real, though "big law" is two words, not the one lowercase word that you made it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My firm (20-30 range) has a global town hall today. Partners didn't get a draw this quarter and I'm thinking this will be layoffs, but I'm stupidly optimistic they'll start with paycuts.

Update: partner comp reduced by 20% for first half of year, hiring freeze, summer program will get dialed back (but not canceled), no salary reductions for associates or staff. Caveat re: layoffs/pay reductions - this is the absolute last resort; don't want to get there, but we really don't know how long this will last or how bad it will get so no blanket promise to never do so.

At the very least, reviews are going to get a lot tougher and there will be more “performance” terminations. No one wants to be the one to admit to Latham-ing associates, although Latham sure seems to have survived just fine.

What is "Latham-ing" an associate?

It’s when a firm lays off associates due to financial constraints or to boost profits but tells the associates fired that it was due to their poor performance. Done by most big firms.

Ah, okay. I'm not in the law profession myself but have plenty of friends who are, including a partner at Latham, so I was just curious.

Sounds about right from what I do know about big law!

Large law firms have devolved into a horrible cesspool. They need to follow a more corporate model and hire fewer people with a view to have them stay. Charge reasonable rates. Pay associates far less. Allow for more job security. Should devalue billable hours and value good work and team building etc. The accounting firms are like this. Big law can do it.

You aren’t wrong. The high associate salaries lead to high hours requirements and high rates and no tolerance for a dip in performance.

Haven't read the whole thread, but had to respond this post.

The current BIGLAW model evolved over the past 100+ years with the rise of corporations from the industrial revolution. Yet even before that, lawyers would often hire young "clerks," burn them out or they leave to start their own firms, then hire a new crop of fresh clerks. This model works well for law firm partners, but not for clients. We will only see a change to the corporate model if clients demand it. Since only the largest clients generate continuous legal work, the ones with intermittent work won't care because all they're interested in is solving their immediate problem, then letting their in-house counsel handle the day-to-day work.

I'm sure folks will disagree with some or all of the foregoing, but that's not the larger point here. The OP was interested in pay cuts, which are happening, as they have happened before, and as they will again. Law firm partners are not altruistic and never will be if they can simply hire just-as-smart and cheaper talent when times get better (which they can). The real solution is for the number of law schools to shrink along with the number of law school graduates. But because law schools are cash cows for universities (i.e. they pay for the 17th century Central African dance department), this won't happen. The ABA won't shrink the number either, because it's dependent on the fees paid by universities to get accredited or keep their programs accredited (and the more lawyers there are, the more ABA members).

Not asked by the OP, but still important, is what should a young BIGLAW associate do today to avoid getting hosed down the line? Bill 50-100 hours over the minimum, then spend the rest of your time learning the ins and outs of the "business" of law. How to get clients should be at the top of this list (hint: it is about good service, but that's only a small part of it - anyone can provide good service). Never bill crazy hours and expect gratitude from the partners down the line. They've gotten their profit off you, so why should they give you any more of it? After not sharing enough times, they know you'll grow bitter, so it will be time to find someone new and "eager". Put simply, start thinking like a partner (owner) rather than an employee. If you don't, that's all you'll ever be.

May be foreign concepts to attorneys who are used to being fed work generated by large, institutional clients that hire BIGLAW firms.

Most people who go to law school don't have the entrepreneurial mindset. There are quite a few BIGLAW partners who strut around like they're the cat's meow because they earn $600k+ a year. Then they meet a potential new client who's 22 years old, sold his/her company to FB for a couple billion, and is starting a 3rd company. Funny how pathetic 20+ years of hard work looks in the face of that. On the other hand, the law is a (relatively) safe endeavor compared to business. Business people just have higher upside, assuming they own a chunk of their company.

Law is a business; the people who start law firms are starting businesses, etc. Those large personal injury firms that are always running ads are advertising their business, etc.

[Anonymous]

Cutting out the large re-post block.

The law is a business, and just like any other, the employees aren't going to get treated the same way as shareholders. If you think like a business person when you're an associate, you have a much better chance of making partner. Or, more likely, you'll recognize far, far earlier what a racket big law firms are and use your firm more than it uses you.

For example, long before Covid-19, I knew an associate who wanted to travel to far-flung locations like Bali, Japan, Patagonia, and similarly high-travel cost places. He volunteered to do document review and other menial work on-site in cities all over the U.S. and the world. Very few associates wanted to travel to North Dakota during the winter, or West Texas during the summer - but he did it. 1M+ frequent flyer miles plus hotel points, he would take vacations worth $10k+ while other associates were spending their own $$$ on bar tabs, dinners out, etc...

[Anonymous]

Anonymous wrote:Cutting out the large re-post block.

The law is a business, and just like any other, the employees aren't going to get treated the same way as shareholders. If you think like a business person when you're an associate, you have a much better chance of making partner. Or, more likely, you'll recognize far, far earlier what a racket big law firms are and use your firm more than it uses you.

For example, long before Covid-19, I knew an associate who wanted to travel to far-flung locations like Bali, Japan, Patagonia, and similarly high-travel cost places. He volunteered to do document review and other menial work on-site in cities all over the U.S. and the world. Very few associates wanted to travel to North Dakota during the winter, or West Texas during the summer - but he did it. 1M+ frequent flyer miles plus hotel points, he would take vacations worth $10k+ while other associates were spending their own $$$ on bar tabs, dinners out, etc...

Cool story bro

Your lame doc reviewer pal most certainly did not make partner

[Anonymous]

Anonymous wrote:

Anonymous wrote:Cutting out the large re-post block.

The law is a business, and just like any other, the employees aren't going to get treated the same way as shareholders. If you think like a business person when you're an associate, you have a much better chance of making partner. Or, more likely, you'll recognize far, far earlier what a racket big law firms are and use your firm more than it uses you.

For example, long before Covid-19, I knew an associate who wanted to travel to far-flung locations like Bali, Japan, Patagonia, and similarly high-travel cost places. He volunteered to do document review and other menial work on-site in cities all over the U.S. and the world. Very few associates wanted to travel to North Dakota during the winter, or West Texas during the summer - but he did it. 1M+ frequent flyer miles plus hotel points, he would take vacations worth $10k+ while other associates were spending their own $$$ on bar tabs, dinners out, etc...

Cool story bro

Your lame doc reviewer pal most certainly did not make partner

Yeah, former biglaw litigation associate here and I don't believe this. Nobody volunteers to do tank their career by doing doc review forever just for vacation points. And at some point you become far too expensive to spend countless hours on doc review. There are cheap, local contract attorneys for that.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Cutting out the large re-post block.

The law is a business, and just like any other, the employees aren't going to get treated the same way as shareholders. If you think like a business person when you're an associate, you have a much better chance of making partner. Or, more likely, you'll recognize far, far earlier what a racket big law firms are and use your firm more than it uses you.

For example, long before Covid-19, I knew an associate who wanted to travel to far-flung locations like Bali, Japan, Patagonia, and similarly high-travel cost places. He volunteered to do document review and other menial work on-site in cities all over the U.S. and the world. Very few associates wanted to travel to North Dakota during the winter, or West Texas during the summer - but he did it. 1M+ frequent flyer miles plus hotel points, he would take vacations worth $10k+ while other associates were spending their own $$$ on bar tabs, dinners out, etc...

Cool story bro

Your lame doc reviewer pal most certainly did not make partner

Yeah, former biglaw litigation associate here and I don't believe this. Nobody volunteers to do tank their career by doing doc review forever just for vacation points. And at some point you become far too expensive to spend countless hours on doc review. There are cheap, local contract attorneys for that.

This makes even a tiny amount on sense only for someone who wants to spend 1-3 years in Biglaw to pay back loans and not a second more. Even then, you are going to have a hard time finding the next thing if you did mostly doc review.

[Anonymous]

Do these firms think no one notices that they have not even given this sufficient time to determine whether there is an actual downturn in their business?

What other businesses that have remained open and operational have instituted paycuts and layoffs? Are they that risk adverse that they cut everyone based on what might happen?

[Anonymous]

Anonymous wrote:Do these firms think no one notices that they have not even given this sufficient time to determine whether there is an actual downturn in their business?

What other businesses that have remained open and operational have instituted paycuts and layoffs? Are they that risk adverse that they cut everyone based on what might happen?

You kind of need to get a clue. Clients are vanishing and blowing up. The whole country is becoming impoverished and unemployed . . . so yeah, there is going to be price pressure on lawyers and massive layoffs.

[Anonymous]

Anonymous wrote:Do these firms think no one notices that they have not even given this sufficient time to determine whether there is an actual downturn in their business?

What other businesses that have remained open and operational have instituted paycuts and layoffs? Are they that risk adverse that they cut everyone based on what might happen?

Are the pay cuts temporary or permanent? If permanent, then I'd surmise that the projected (and now likely) drop off in billable work is being used as an excuse to lower salaries across the board, while still preserving PPP.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Do these firms think no one notices that they have not even given this sufficient time to determine whether there is an actual downturn in their business?

What other businesses that have remained open and operational have instituted paycuts and layoffs? Are they that risk adverse that they cut everyone based on what might happen?

You kind of need to get a clue. Clients are vanishing and blowing up. The whole country is becoming impoverished and unemployed . . . so yeah, there is going to be price pressure on lawyers and massive layoffs.

Have you seen actual proof in the law firm that employs you that its clients are "vanishing and blowing up" to the extent that your pay would have already needed to be cut two weeks ago? And the copy/coffee/staff people laid off weeks ago?

[Anonymous]

Anonymous wrote:Cutting out the large re-post block.

The law is a business, and just like any other, the employees aren't going to get treated the same way as shareholders. If you think like a business person when you're an associate, you have a much better chance of making partner. Or, more likely, you'll recognize far, far earlier what a racket big law firms are and use your firm more than it uses you.

For example, long before Covid-19, I knew an associate who wanted to travel to far-flung locations like Bali, Japan, Patagonia, and similarly high-travel cost places. He volunteered to do document review and other menial work on-site in cities all over the U.S. and the world. Very few associates wanted to travel to North Dakota during the winter, or West Texas during the summer - but he did it. 1M+ frequent flyer miles plus hotel points, he would take vacations worth $10k+ while other associates were spending their own $$$ on bar tabs, dinners out, etc...

A true entrepreneur would not be pursuing a career in law, let alone Big Law. TBH, sounds like you're equivocating what your friend is doing to what an employee would do...a true "business person" according to your definition, i.e. partner material, would think ways to help the firm cut cost and maximize revenue rather than enjoying the perks of working for a company by being a glorified doc reviewer.

[Anonymous]

"Did you hear, that entire busload of lawyers went off the bridge on the way to the biglaw conference? It turned out OK though. The bus driver swam safely to shore. The worst part of it was there were a few empty seats"

[Anonymous]

Anonymous wrote:

Anonymous wrote:Do these firms think no one notices that they have not even given this sufficient time to determine whether there is an actual downturn in their business?

What other businesses that have remained open and operational have instituted paycuts and layoffs? Are they that risk adverse that they cut everyone based on what might happen?

You kind of need to get a clue. Clients are vanishing and blowing up. The whole country is becoming impoverished and unemployed . . . so yeah, there is going to be price pressure on lawyers and massive layoffs.

If the firms are requiring contemporaneous entry of billable hours, they can track pretty much in real time how much their revenues are falling off. And I think they are falling of quite a bit already, and most people realize that there's going to be a long term impact as the clients go belly up.