Cravath SHATTERS THE MARKET! Forum

[c3pO4]

Cp, you started out with such promise ITT. Don't go all herp derp on us now.

Hah. Well if FP didn't show up just to troll some students and add nothing to the conversation except "I'm a biglaw associate, son" I wouldn't have said anything.

[Anonymous User]

btw, just to clarify, I was talking about the biglaw market as a whole, not just single firms. While a single firm certainly could drop to $120k, there's no question that firm would get lower-quality applicants. If all of biglaw wasw able to drop their pay to $120k without getting into antitrust issues, though, biglaw would still get basically the same quality applicant pool - meaning that the biglaw market in general is overpaying people.

OK. I'll give you that. But this would never happen, because enough firms would buck the trend to poach top talent. It's not like they have to reduce salaries, given soaring profits and the relatively low ratio of associate pay to profits.

The problem with lowering the starting salary to $120k is that you don't reduce billable hour requirements, and then you aren't competing with other big firms, but rather nonfirms. The difference between the $70-80k you can make in some government agencies, for a lot less work, starts to be more attractive. Smaller boutiques are a lot more attractive. Opening your own starts to seem less risky, when the alternative is less guaranteed salary. Companies like HP and others who are now starting to hire directly for in house can compete better for top talent. Of course you can still pay your loans on $120k a year, but now it's not in 4-5 years, but inching closer to the 10 it would take for them to just be forgiven if you took a lower stress public interest job. Firms will still be full of people from top schools but they'll have to reach lower in ranking and deeper in the class.

Now, why they care about that at all, idk. It's not like the bottom of Michigan or whatever won't be capable of doc review.

[ToTransferOrNot]

btw, just to clarify, I was talking about the biglaw market as a whole, not just single firms. While a single firm certainly could drop to $120k, there's no question that firm would get lower-quality applicants. If all of biglaw wasw able to drop their pay to $120k without getting into antitrust issues, though, biglaw would still get basically the same quality applicant pool - meaning that the biglaw market in general is overpaying people.

That's not true. If biglaw moved to 120, you'd see a lot of talented students from T14 schools move to other markets. Hell, the firm I SA'd at as a 1L is in a market that pays almost 100k starting off with a MUCH lower COL and QOL and lower billables.

There would have to be a shift downward not only from biglaw, but also midlaw and smaller non-shitlaw firms.

That's the point GTLR brought up. My point is that the financial reference points already are stacked overwhelmingly against going to NYC, yet people go in droves. Obviously, as I acknowledged, you eventually hit a tipping point where people will say "no" to biglaw and take offers in other markets and the like - people already do this at $160, more obviously would at $120 - the question, though, is whether (i) there are enough of those 'other' jobs available to really make a difference; (ii) people would be willing to forgo the 'prestige' and exit options; (iii) people would be willing to get out of the "I >3 NYC" camp; (iv) etc. I would say you'd need a number lower than $120k to get to the point where biglaw would start running into a problem with the caliber of their applicants, but that's not a provable 'line'.

And yes, as you drop the biglaw pay, you start competing with government agencies and the like as well. But again, there aren't enough of those positions to really do the deal (not to mention the fact that biggov is frankly more competitve than Biglaw already).

[Renzo]

btw, just to clarify, I was talking about the biglaw market as a whole, not just single firms. While a single firm certainly could drop to $120k, there's no question that firm would get lower-quality applicants. If all of biglaw wasw able to drop their pay to $120k without getting into antitrust issues, though, biglaw would still get basically the same quality applicant pool - meaning that the biglaw market in general is overpaying people.

That's not true. If biglaw moved to 120, you'd see a lot of talented students from T14 schools move to other markets. Hell, the firm I SA'd at as a 1L is in a market that pays almost 100k starting off with a MUCH lower COL and QOL and lower billables.

There would have to be a shift downward not only from biglaw, but also midlaw and smaller non-shitlaw firms.

Not only would they move into other markets, you just couldn't convince them to work as hard, because the next-best job wouldn't be that big of a pay cut. If your choices are bill 2000 hours or take a $70,000 pay cut, plenty of people are going to sleep in their offices; but if the choice becomes bill 2000 hours or take a $20,000 pay cut, all the sudden working every weekend of your life may not seems so appealing.

[ToTransferOrNot]

btw, just to clarify, I was talking about the biglaw market as a whole, not just single firms. While a single firm certainly could drop to $120k, there's no question that firm would get lower-quality applicants. If all of biglaw wasw able to drop their pay to $120k without getting into antitrust issues, though, biglaw would still get basically the same quality applicant pool - meaning that the biglaw market in general is overpaying people.

That's not true. If biglaw moved to 120, you'd see a lot of talented students from T14 schools move to other markets. Hell, the firm I SA'd at as a 1L is in a market that pays almost 100k starting off with a MUCH lower COL and QOL and lower billables.

There would have to be a shift downward not only from biglaw, but also midlaw and smaller non-shitlaw firms.

Not only would they move into other markets, you just couldn't convince them to work as hard, because the next-best job wouldn't be that big of a pay cut. If your choices are bill 2000 hours or take a $70,000 pay cut, plenty of people are going to sleep in their offices; but if the choice becomes bill 2000 hours or take a $20,000 pay cut, all the sudden working every weekend of your life may not seems so appealing.

"Bill 2000 hours or you're fired", on the other hand, is quite motivating. A lot of the posts in this thread seem to be assuming that there are enough "other" jobs to handle the evacuees that would result from a cut to base pay and elimination of salaries. But there aren't. Being able to get a biglaw job doesn't mean you automatically are going to be able to get another kind of job - even if you focus on different kinds of jobs through the entire hiring process (a biglaw person getting the ax for insufficient billing is going to have an even harder time, obviously).

Anyway, I'm really sorry that I managed to completely derail the thread. The whole "all of biglaw could lower base pay" thing was just a way to highlight my main argument that people complaining about being underpaid re bonuses should either (i) go get more money elsewhere, or, if they can't, (ii) STFU because if they can't get more money elsewhere, they're not actually underpaid.

[NinerFan]

btw, just to clarify, I was talking about the biglaw market as a whole, not just single firms. While a single firm certainly could drop to $120k, there's no question that firm would get lower-quality applicants. If all of biglaw wasw able to drop their pay to $120k without getting into antitrust issues, though, biglaw would still get basically the same quality applicant pool - meaning that the biglaw market in general is overpaying people.

That's not true. If biglaw moved to 120, you'd see a lot of talented students from T14 schools move to other markets. Hell, the firm I SA'd at as a 1L is in a market that pays almost 100k starting off with a MUCH lower COL and QOL and lower billables.

There would have to be a shift downward not only from biglaw, but also midlaw and smaller non-shitlaw firms.

That's the point GTLR brought up. My point is that the financial reference points already are stacked overwhelmingly against going to NYC, yet people go in droves. Obviously, as I acknowledged, you eventually hit a tipping point where people will say "no" to biglaw and take offers in other markets and the like - people already do this at $160, more obviously would at $120 - the question, though, is whether (i) there are enough of those 'other' jobs available to really make a difference; (ii) people would be willing to forgo the 'prestige' and exit options; (iii) people would be willing to get out of the "I >3 NYC" camp; (iv) etc. I would say you'd need a number lower than $120k to get to the point where biglaw would start running into a problem with the caliber of their applicants, but that's not a provable 'line'.

And yes, as you drop the biglaw pay, you start competing with government agencies and the like as well. But again, there aren't enough of those positions to really do the deal (not to mention the fact that biggov is frankly more competitve than Biglaw already).

People go in droves because most of the jobs are there, but I think if you polled a typical class, you'd see that all things being equal they'd probably prefer somewhere else.

[NinerFan]

"Bill 2000 hours or you're fired", on the other hand, is quite motivating. A lot of the posts in this thread seem to be assuming that there are enough "other" jobs to handle the evacuees that would result from a cut to base pay and elimination of salaries. But there aren't. Being able to get a biglaw job doesn't mean you automatically are going to be able to get another kind of job - even if you focus on different kinds of jobs through the entire hiring process (a biglaw person getting the ax for insufficient billing is going to have an even harder time, obviously).

Anyway, I'm really sorry that I managed to completely derail the thread. The whole "all of biglaw could lower base pay" thing was just a way to highlight my main argument that people complaining about being underpaid re bonuses should either (i) go get more money elsewhere, or, if they can't, (ii) STFU because if they can't get more money elsewhere, they're not actually underpaid.

The market could absorb some of the shift if they sought the mid to smaller jobs that are more likely to go to regional/state schools and the lower ranked portions of the T-14.

[Bronte]

It would be near impossible for the market to move to $120,000 because while the law firms engage in tacit price fixing, they're not a cartel. Tacit price maintenance is one thing, but no one's going to follow a firm that moves the base pay down. They're just going to laugh and scoop up the talent. If anything, NY is under pressure to increase base pay. Attorneys at top firms in Chicago do NY work and make almost twice as much when you adjust for COL.

[c3pO4]

It would be near impossible for the market to move to $120,000 because while the law firms engage in tacit price fixing, they're not a cartel. Tacit price maintenance is one thing, but no one's going to follow a firm that moves the base pay down. They're just going to laugh and scoop up the talent. If anything, NY is under pressure to increase base pay. Attorneys at top firms in Chicago do NY work and make almost twice as much when you adjust for COL.

+1. If you can get it, Chicago is clearly best bang for buck biglaw.

[ToTransferOrNot]

It would be near impossible for the market to move to $120,000 because while the law firms engage in tacit price fixing, they're not a cartel. Tacit price maintenance is one thing, but no one's going to follow a firm that moves the base pay down. They're just going to laugh and scoop up the talent. If anything, NY is under pressure to increase base pay. Attorneys at top firms in Chicago do NY work and make almost twice as much when you adjust for COL.

Yeah, I know. Like I said, just a hypothetical to illustrate my actual point.

The only way an individual firm would lower their base pay would be if they decided they didn't care about getting "lower-quality" applicants. Of course, all firms do this already by not matching Bartlit and the like, but there is a real difference between resisting upward pressure and going down.

[ToTransferOrNot]

It would be near impossible for the market to move to $120,000 because while the law firms engage in tacit price fixing, they're not a cartel. Tacit price maintenance is one thing, but no one's going to follow a firm that moves the base pay down. They're just going to laugh and scoop up the talent. If anything, NY is under pressure to increase base pay. Attorneys at top firms in Chicago do NY work and make almost twice as much when you adjust for COL.

+1. If you can get it, Chicago Texas is clearly best bang for buck biglaw.

But again, this is ignoring all the other parts of "compensation" (mainly exit options and 'ZOMG NYC') that go along with being a NYC attorney, for whatever an individual thinks those things are worth. (Given that I'm Chicago-bound, and I have talked more than one person into turning down NYC-prestige for Chicago-$$$, I don't think they're worth much; but people obviously attach significant value to them or, as I said, NYC would already be suffering for top=flight talent.)

[c3pO4]

It would be near impossible for the market to move to $120,000 because while the law firms engage in tacit price fixing, they're not a cartel. Tacit price maintenance is one thing, but no one's going to follow a firm that moves the base pay down. They're just going to laugh and scoop up the talent. If anything, NY is under pressure to increase base pay. Attorneys at top firms in Chicago do NY work and make almost twice as much when you adjust for COL.

+1. If you can get it, Chicago Texas is clearly best bang for buck biglaw.

Ya, fair. Tx ftw forever.

[Veyron]

I think the idea is that at 120k, you're really only talking 25 bucks an hour or so. At that point, there are plenty of non-legal jobs that will work you less and pay you the same on a per-hour basis. I think lots of people would be happy to make that tradeoff for less pay/hours, especially considering that you pay more taxes on the top portion of your income than the bottom.

[Bronte]

It would be near impossible for the market to move to $120,000 because while the law firms engage in tacit price fixing, they're not a cartel. Tacit price maintenance is one thing, but no one's going to follow a firm that moves the base pay down. They're just going to laugh and scoop up the talent. If anything, NY is under pressure to increase base pay. Attorneys at top firms in Chicago do NY work and make almost twice as much when you adjust for COL.

+1. If you can get it, Chicago Texas is clearly best bang for buck biglaw.

But again, this is ignoring all the other parts of "compensation" (mainly exit options and 'ZOMG NYC') that go along with being a NYC attorney, for whatever an individual thinks those things are worth. (Given that I'm Chicago-bound, and I have talked more than one person into turning down NYC-prestige for Chicago-$$$, I don't think they're worth much; but people obviously attach significant value to them or, as I said, NYC would already be suffering for top=flight talent.)

Chicago provides a much better middle ground than Texas. You're in a more cosmopolitan city and you're working on many of the same matters as NYC attorneys do (at least if you're at one of the top handful of Chicago firms). It's also much less insular, so it's a more realistic option for T14 students without ties to any major market.

[Julio_El_Chavo]

I think the idea is that at 120k, you're really only talking 25 bucks an hour or so. At that point, there are plenty of non-legal jobs that will work you less and pay you the same on a per-hour basis. I think lots of people would be happy to make that tradeoff for less pay/hours, especially considering that you pay more taxes on the top portion of your income than the bottom.

Just do engineering, bros who didn't get biglaw.

[Eco]

^ You're saying its $25/hr. But what you don't realize is that most jobs don't let you work 80 or so hours a week and pay you that much money. So yes, you work more, but you get paid more and if you find another job for $25/hr you will get paid less because you work less hours.

It IS worth it to work that hard to get your loans paid and become at least semi-successful while being exposed to hardcore law. As opposed to being worthless (jk).

[Veyron]

^ You're saying its $25/hr. But what you don't realize is that most jobs don't let you work 80 or so hours a week and pay you that much money. So yes, you work more, but you get paid more and if you find another job for $25/hr you will get paid less because you work less hours.

It IS worth it to work that hard to get your loans paid and become at least semi-successful while being exposed to hardcore law. As opposed to being worthless (jk).

That's clearly exactly what I pointed out. However, I think a fair number of kids doing biglaw would rather work 2000 hours for 25 bucks an hour (post tax) than 3200 hours for Cravath for the same 25 bucks an hour. Most people behave according to the principle that the more time they are required to spend working, the more they demand for each additional hour of their time. Think about it, even if I offered you $1000 an hour to work, there would come a point where you would say "no more" because sleep/life/family would be more important than the next grand.

Besides, not everyone has the same debt loads, especially when you're talking the creme de la creme, many of whom have substantial scholarships to their T-14.

[Eco]

Honestly I'm just saying, from someone who did well academically at GW but still haven't found anything, people in Cravath should really be grateful in this shit economy to have a job like that.

[Veyron]

Honestly I'm just saying, from someone who did well academically at GW but still haven't found anything, people in Cravath should really be grateful in this shit economy to have a job like that.

-

[NinerFan]

Honestly I'm just saying, from someone who did well academically at GW but still haven't found anything, people in Cravath should really be grateful in this shit economy to have a job like that.

Hm, I bet you get angry at pro sport players who haggle over contracts.

[Eco]

I wasn't saying that they want to hire me or anything. I'm just saying, for someone at a school like GW where even with good grades big law is still tough to get, those who got the jobs we all want can be at least happy they are getting a bonus.

Hm, I bet you get angry at pro sport players who haggle over contracts.

I guess I should re-phrase: I'm not saying that there is no cause for concern or reason to be pissed about a lower bonus. I'm just saying when there's 9% unemployment out there, you're lucky to be at Cravath, even if the pay wasn't what it used to be.

[Veyron]

I wasn't saying that they want to hire me or anything. I'm just saying, for someone at a school like GW where even with good grades big law is still tough to get, those who got the jobs we all want can be at least happy they are getting a bonus.

Thats just the point, I DON'T want the Cravath gig at the current pay levels and a lot of other talented people with other options don't either. It doesn't make much sense to work so much more for so little extra money.

[NinerFan]

I guess I should re-phrase: I'm not saying that there is no cause for concern or reason to be pissed about a lower bonus. I'm just saying when there's 9% unemployment out there, you're lucky to be at Cravath, even if the pay wasn't what it used to be.

I think part of the annoyance being felt by associates right now is that the firm that they slave for is doing just as well if not better than it did when it gave out higher compensation, but the benefits are not being shared as much as in the past.

It's funny, you could view it as an "unequal distribution of wealth" argument like what OWS is complaining about.

[Renzo]

I wasn't saying that they want to hire me or anything. I'm just saying, for someone at a school like GW where even with good grades big law is still tough to get, those who got the jobs we all want can be at least happy they are getting a bonus.

Hm, I bet you get angry at pro sport players who haggle over contracts.

I guess I should re-phrase: I'm not saying that there is no cause for concern or reason to be pissed about a lower bonus. I'm just saying when there's 9% unemployment out there, you're lucky to be at Cravath, even if the pay wasn't what it used to be.

I agree with the sentiment, but the sports analogy is apt.

People aren't mad about the absolute level of salary, they are mad because the law firm partners are holding back a bigger share of the money for themselves. If the law firms were doing poorly and bonuses were low, (most) people wouldn't be upset; but when profits are high and bonuses get cut, it's nothing more than the richest people in the room getting richer at the direct expense of the less rich people.

It's the same as ball players; they aren't going to reduce season ticket prices if they pay the players less; but rather the owners are just going to get richer. So hell yeah the players want more--they're the ones working the hardest.

[Old Gregg]

It would be near impossible for the market to move to $120,000 because while the law firms engage in tacit price fixing, they're not a cartel. Tacit price maintenance is one thing, but no one's going to follow a firm that moves the base pay down. They're just going to laugh and scoop up the talent. If anything, NY is under pressure to increase base pay. Attorneys at top firms in Chicago do NY work and make almost twice as much when you adjust for COL.

+1. If you can get it, Chicago Texas is clearly best bang for buck biglaw.

But again, this is ignoring all the other parts of "compensation" (mainly exit options and 'ZOMG NYC') that go along with being a NYC attorney, for whatever an individual thinks those things are worth. (Given that I'm Chicago-bound, and I have talked more than one person into turning down NYC-prestige for Chicago-$$$, I don't think they're worth much; but people obviously attach significant value to them or, as I said, NYC would already be suffering for top=flight talent.)

Chicago provides a much better middle ground than Texas. You're in a more cosmopolitan city and you're working on many of the same matters as NYC attorneys do (at least if you're at one of the top handful of Chicago firms). It's also much less insular, so it's a more realistic option for T14 students without ties to any major market.

Too bad the weather is shit.