Bonus Rollout (alternate title: law is boned) Forum

[Renzo]

Probably have to sell blood and sperm too just to make ends meet.

Not mixed together, I hope

[Anonymous User]

Don't think this means anything at all. Every industry is experiencing this. I work currently in healthcare, and even there will be no bonuses this year, and workers up and down the chain (right up to the top levels) are being asked to flex (take some days off.) It's just the economy.

[ToTransferOrNot]

Am I the only one not surprised at all that associate bonuses were slashed in a bad economy?

I think the reason some people are confused is that it seems like PPP isn't going to be down too much this year (because of the drastic cost-saving measures taken, i.e. crushing the hopes and dreams of law students/associates,) which some people take to mean bonuses shouldn't be down too much.

I tend to agree with you. Though, I wouldn't be surprised if every biglaw firm got together and decided "Um, hey guys, see what Howrey is doing over there with the $100k a year? They still have more resumes than they could ever read. $100k for everyone!"

[nealric]

Though, I wouldn't be surprised if every biglaw firm got together and decided "Um, hey guys, see what Howrey is doing over there with the $100k a year? They still have more resumes than they could ever read. $100k for everyone!"

Meh, I would. There is a huge collective action problem here.

Howery was never really competing with Cravath for talent. By lowering to 100k, Howery made the decision that they could make do with less than top-tier talent. Sure, they get a ton of resumes, but do you think anybody with the choice between a 160k firm and a 100k firm is really going to pick the 100k firm (unless the 100k firm has some serious quality of life guarantees)?

The crisis is now a year old, and we still haven't seen any top tier firms drop salaries. The majority of the V100 (and even some of the higher amlaw 250) are still at 160.


As an aside: I think one BIG problem with Howery is that they aren't calling the juniors associates. Instead, they are labeling "trainees" or something like that. To me, that's an idiotic move. Job titles cost nothing to confer, but imagine the blow of having to put "trainee" on your resume if you wanted to lateral after 2 years. As a result, If I were on the job market now, I would only choose Howery if every other biglaw firm and every federal government agency rejected me.

[ToTransferOrNot]

Fair enough--I didn't use accurate language. I would be surprised if we saw a simultaneous, precipitous drop in salary across the biglaw board, because of the collective action problems, as you mention. I was referring more to the economic benefits and the fact that every biglaw firm in the country could still draw the very top talent if they were paying considerably less.

Obviously, what Howery has done to itself on its own is going to render it the last choice for most people; although, for the forseeable future, they're still going to get a very high level of talent in that last choice slot. That said, if all but the top-of-the-top all dropped their salaries, they would get largely the same talent pool that they draw now--those who aren't taken on by the Wachtells-->Skadden/Cravath/Covington/Kirklands (this is not an exclusive list) of the world. In other words, I don't quite understand what motivation firms in the second band have to match the salaries of firms in the first band. People who could have gotten jobs at those firms are going to take the jobs at those firms, regardless of whether other firms match the salary.

I see firms largely as a hierarchy. You can draw a (very, VERY) rough analogy to law schools: Wachtell (Yale) is on top, there is a band of firms below Wachtell--perhaps the V 5/10, plus or minus a few (Harvard, Stanford), a third band below that, perhaps the V20 (CCN), and the rest of the V100 (the rest of the T14). Everyone who gets in to Wachtell goes, the V5-10 command a very high degree of talent, the V20 are still seen as impressive, but they are certainly on something of a lower level than the very top firms, and the rest of the V100, while still composed of extremely impressive firms, do not have people with the same level of credentials.

Wachtell pays for the people it gets. I understand why the V5-10 would maintain their current salary structure. I can see the V20 keeping their salary structure the same in an effort to poach a few of the people who could have gone in to the higher firms (akin to CCS offering large scholarships to people who could go to HYS, in an effort to snag them.) What I don't understand is why the rest of the V100 insists on keeping up with that first and second band. Most people are not going to be enticed out of taking the prestigious job at Skadden over a job at McDermott, despite the fact that McDermott is a fantastic firm, just like most people who are admitted to Harvard are not going to be enticed by a huge scholarship offer from Michigan, Duke, or Georgetown (no, I'm not saying those three schools are on the same level, by the way. Like I said, very, VERY rough analogy.)

Edit: (And yes, I understand that the Vault rankings are largely worthless, people who choose firms based solely on them are tools, there are practice area considerations, location, etc. etc. etc. to take in to account. Like I said... this is an incredibly rough analogy, but I think it is at least a bit illustrative of what I'm trying to say.)

[nealric]

What I don't understand is why the rest of the V100 insists on keeping up with that first and second band

I think a lot of it is that they aspire to be in those bands and see getting top talent as one of the ways to get there. Occasionally, they do manage to snag people who would otherwise go top band firms. The economy is kind of a golden opportunity for firms looking to upgrade talent.

I have a family member who is a hiring partner at a non-vault firm that pays market. Right now, they have people seriously considering them against firms like Covington. Drop to 100k, and they could still snag the talent level they used to, but they would have no hope of upgrade. The firm is doing fairly well against its peers in the market (some are vault-ranked). Even though some of the peers may not be doing as well, they don't want to risk dropping salaries and being seen as in decline.

[ToTransferOrNot]

Fair enough. I'm willing to admit when reasoning that I am using is contradicted by evidence to the contrary. I would be amazed if people who receive offers from the Covingtons of the world would, as a matter of course, choose a firm with significantly less force behind the name (pay being equal,) but my perception here might just be completely wrong.

[nealric]

I would be amazed if people who receive offers from the Covingtons of the world would, as a matter of course, choose a firm with significantly less force behind the name (pay being equal,) but my perception here might just be completely wrong.

Effective pay is higher because of secondary market COL & Tax rates. Plus, some people don't really want the V10 pressure-cooker even if it means less prestigious options down the road. Most people do pick Covington over the lower-ranked firm, but the point is there are a few who do who would not if the firm dropped salaries.

[CE2JD]

I would be amazed if people who receive offers from the Covingtons of the world would, as a matter of course, choose a firm with significantly less force behind the name (pay being equal,) but my perception here might just be completely wrong.

Effective pay is higher because of secondary market COL & Tax rates. Plus, some people don't really want the V10 pressure-cooker even if it means less prestigious options down the road. Most people do pick Covington over the lower-ranked firm, but the point is there are a few who do who would not if the firm dropped salaries.

Yeah. 160 in TX is like 320 in NY.

I'd take market in TX over market in NY in a heartbeat.

[Anonymous User]

well at least cravath prob needed to cut bonuses

what sucks is the firms that are doing swimmingly but are slashing bonuses because of the market. at least two firms have had big ole' ASSOCIATEZ COMMITEEZZ meetings to discuss bonuses...where the partners informed them bonuses were going down 'cause of the market.

ASSOCIATEZ COMMITTEEZ 4 LIFEEE

[Renzo]

I would be amazed if people who receive offers from the Covingtons of the world would, as a matter of course, choose a firm with significantly less force behind the name (pay being equal,) but my perception here might just be completely wrong.

Effective pay is higher because of secondary market COL & Tax rates. Plus, some people don't really want the V10 pressure-cooker even if it means less prestigious options down the road. Most people do pick Covington over the lower-ranked firm, but the point is there are a few who do who would not if the firm dropped salaries.

Yeah. 160 in TX is like 320 in NY.

I'd take market in TX over market in NY in a heartbeat.

Funny, because I'd actually pay not to have to live in Texas.

[Anonymous User]

I would be amazed if people who receive offers from the Covingtons of the world would, as a matter of course, choose a firm with significantly less force behind the name (pay being equal,) but my perception here might just be completely wrong.

Effective pay is higher because of secondary market COL & Tax rates. Plus, some people don't really want the V10 pressure-cooker even if it means less prestigious options down the road. Most people do pick Covington over the lower-ranked firm, but the point is there are a few who do who would not if the firm dropped salaries.

Yeah. 160 in TX is like 320 in NY.

I'd take market in TX over market in NY in a heartbeat.

Funny, because I'd actually pay not to have to live in Texas.

i wouldnt mind TX if i were white

-underdawg (wtf you cant delete an anon post?)