Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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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.

This same conversation takes place every 8-10 years.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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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.

All your points make sense, but I still do not understand if the model is bad for clients, why clients do not demand a change?

I’m no PP. but I think the clients were already demanding a change. They constantly ask for reductions in bills. They want top product with low rates.

Now more than ever with little-to-no money coming in the door. Those companies who do have money know that they have leverage to demand lower rates and are doing so. Rates crept up over the past 10 years at a pace that far exceeded inflation. Firms aren't going to cut rates because they expect the economy to bounce back, but they are offering to discount rates temporarily and cut already-billed hours.

This is what happened in 2001/2002 and in 2008/2009. If the current malaise continues to affect the economy, you'll see a freeze in rate increases until 2021 or even 2022, but you won't see across-the-board permanent rate reductions.

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.

All your points make sense, but I still do not understand if the model is bad for clients, why clients do not demand a change?

I’m no PP. but I think the clients were already demanding a change. They constantly ask for reductions in bills. They want top product with low rates.

Now more than ever with little-to-no money coming in the door. Those companies who do have money know that they have leverage to demand lower rates and are doing so. Rates crept up over the past 10 years at a pace that far exceeded inflation. Firms aren't going to cut rates because they expect the economy to bounce back, but they are offering to discount rates temporarily and cut already-billed hours.

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.

All your points make sense, but I still do not understand if the model is bad for clients, why clients do not demand a change?

Clients won't demand a change for the reason in italics and underlined above. The large clients with continuous work are only interested in the work getting done well, on time, and at/under budget. If these things happen, they don't care about law firm business models, and never did. The only real uproar came when firms bumped to $125k in 1999/2000 and large clients began to balk at paying 3x as many hours for a new associate to do their work, hence they were paying to train the law firms' new employees. Cue a large rise in the number of "Of Counsel" and non-equity partners. This layer of middle management would supervise young associates, do the more sophisticated legal work (at $500+ an hour), and insulate the equity partners from having to deal with the historical burden of partners (training the next generation), allowing them to do biz development and grow their books. It's this last piece that was and still is critical to preserving their status as real partners.

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.

All your points make sense, but I still do not understand if the model is bad for clients, why clients do not demand a change?

I’m no PP. but I think the clients were already demanding a change. They constantly ask for reductions in bills. They want top product with low rates.

Clients are going to demand change. The longer the quarantine persists, the more business as usual is gone forever....

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.

All your points make sense, but I still do not understand if the model is bad for clients, why clients do not demand a change?

High pay/high risk. If you go into big law, save, save, save and plan on the likelihood that you won't be there forever.

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.

OP here. the salary jumps in successive years is going to absolutely screw firms like mine (vault 60-ish ranked) that try to play the elite firm game but doesn't have the business model to support it. if we start laying people off, it will be in large part to us following the herd and paying first years $190k.

incidentally, there were jumps in biglaw pay in 2005, then 2006 - then the economy shit the bed in late 2007. looks a lot like now. and just before 9/111, i think biglaw jumped to 125k for first years.

are lawyers just inherently god-awful businesspeople?

anyway, i am a partner (or, i should say, "partner" as only 10% of my comp is equity), and there is a very good chance i'll be laid off.

That is a good question.

No, actually they're not awful business people at all. To the contrary, they generally know the model as a PP mentioned - churn and burn young, smart, eager associates. But this only works if they're not too greedy by pulling too much out of the firm's profits and failing to keep a healthy reserve for the lean times. Naturally these protections only protect the firm, not associates. Associates need to think for themselves. Unfortunately, your average 25-year old, fresh out of a top 50 law school is more interested in pleasing his/her boss (just like law school professors) than having the maturity of expecting something more than just a temporary paycheck for a few years. Now some might argue that first year associates aren't worth $190k, and I'd agree with that. But if firms reduced associate pay, they wouldn't change their business model. One of the reasons that firms raised associate pay back in 1999/2000 to $125k was because many start up tech companies were luring away the best and brightest.

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.

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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.

OP here. the salary jumps in successive years is going to absolutely screw firms like mine (vault 60-ish ranked) that try to play the elite firm game but doesn't have the business model to support it. if we start laying people off, it will be in large part to us following the herd and paying first years $190k.

incidentally, there were jumps in biglaw pay in 2005, then 2006 - then the economy shit the bed in late 2007. looks a lot like now. and just before 9/111, i think biglaw jumped to 125k for first years.

are lawyers just inherently god-awful businesspeople?

anyway, i am a partner (or, i should say, "partner" as only 10% of my comp is equity), and there is a very good chance i'll be laid off.

That is a good question.

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Anonymous wrote:I was a first year in 2001, there was a recession right after 9/11 and lots of law firm layoffs. There was just no work to give the new associates. They cut the junior associates and the expensive “of counsel” first. If you start billing less than 160/month regularly you will know you are in their radar to get axed.

Yep, and this was the true birth of the practice of firing associates for "cause" when the cause was really "no work to give them." Then the firms felt comfortable Latham-ing en masse in 2008.

Harder for associates, of course, but try not to rely solely on other people giving you work. Try to generate your own work that goes with you so if you are laid off, you still have clients.

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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.

Don’t worry, I think a lot of these “traditional” industries like big law and banking will change once the Boomers die out. Millennial men actually want to spend time with their families.

I hope so, but I wonder if they see what their Gen-X and Boomer counterparts have done and don't know how to work differently.

No, won’t change. All law firm partners are greedy- that determines their behaviors no matter what generation

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Anonymous wrote:"Not a lawyer, but why would a firm lay off an associate in a busy practice area? Seems dumb. I like the idea of cross-training strong associates in dead areas though."

Some will do it to protect partners whose practices have slowed down, but passing that associate's work on to the partner.

I suspect that unless our economy does a sharp "V", review time at big law will be ugly, with associates, of counsel and some non-equity partners getting false and overly-negative reviews in order to set them up for performance-based layoffs.

Hopefully not. Why bother with this charade, when when they're at-will employees, and the firm can just "blame the economy."?

Because law firms care very deeply about the perception that they're wildly profitable, even if that's not true. From a big law firm's perspective, it is infinitely better to gin up a reason to fire an associate who is actually performing decently than it is to acknowledge that the firm has money problems and needs to lay people off. This is precisely what Latham & Watkins did during the Great Recession and that reputation has followed them for the past decade.

This is an idiotic practice! In normal times when the industry is doing fine and they had some financial mismanagement they might be able to get away with that. But if ALL law firms all laying off and the reason why is obvious the performance excuse is not going to work.

didn't stop them in '07/'08.