Tracking COVID-19's effect on V100 associate pay/layoffs Forum

[ghostoftraynor]

Do we think there’s going to be a major vault shakeup after this?

To me, the subjectively perceived prestige of a firm should absolutely depend in Major part on that firm’s ability not to cut salaries during this time.

Vault rank is actually proving to be surprisingly on the mark here. If you look at our tracker, of the 20 V100s that have frozen/cut pay or conducted layoffs so far, 15 are in the V51-100 tier, and only a quarter - 5 - are V50s. That says something about the relative strength of those firms.

Now, is the argument that the 20 who've announced so far should be ranked V81-100? I'm not sure we can say that for sure. For one thing (unfortunately), the pay cuts/freezes/layoffs are unlikely to stop at the 20 firms that've announced so far. We have to wait for the dust to settle first.

I think this is all showing Vault to be representative of something. The v50 is doing way better than the v100, and none of the v30 has done anything. We shouldn't expect the firms who've announced to be v81-100 because, in addition to things still moving:

1. Nobody thinks vault is perfect by any means. It has all kinds of biases (e.g., New York M&A practices).

2. This crisis is going to affect different firms differently based on practice groups and client base. You'd expect some "randomness" in it. But, all told, you'd expect the average v10 to be better than v90. And that is exactly how this has played out. The firms in the 30s-40s do seem over-represented comparatively, so not sure what is going on there. But, down for speculation.

[personofinterest]

Do we think there’s going to be a major vault shakeup after this?

To me, the subjectively perceived prestige of a firm should absolutely depend in Major part on that firm’s ability not to cut salaries during this time.

Vault rank is actually proving to be surprisingly on the mark here. If you look at our tracker, of the 20 V100s that have frozen/cut pay or conducted layoffs so far, 15 are in the V51-100 tier, and only a quarter - 5 - are V50s. That says something about the relative strength of those firms.

Now, is the argument that the 20 who've announced so far should be ranked V81-100? I'm not sure we can say that for sure. For one thing (unfortunately), the pay cuts/freezes/layoffs are unlikely to stop at the 20 firms that've announced so far. We have to wait for the dust to settle first.

I think this is all showing Vault to be representative of something. The v50 is doing way better than the v100, and none of the v30 has done anything. We shouldn't expect the firms who've announced to be v81-100 because, in addition to things still moving:

1. Nobody thinks vault is perfect by any means. It has all kinds of biases (e.g., New York M&A practices).

2. This crisis is going to affect different firms differently based on practice groups and client base. You'd expect some "randomness" in it. But, all told, you'd expect the average v10 to be better than v90. And that is exactly how this has played out. The firms in the 30s-40s do seem over-represented comparatively, so not sure what is going on there. But, down for speculation.

# of firms on list, grouped by ten spots on overall Vault list:
1-10: 0
11-20: 0
21-30: 0
31-40: 3
41-50: 2
51-60: 2
61-70: 5
71-80: 1
81-90: 3
91-100: 4

This shows a strong, upward trend for more pay cuts as rank gets worse. I think the bumps (e.g., 61-70 with 5, while 71-80 has 1) are best explained by randomness.

[PeanutsNJam]

My vault survey response consisted of me ranking Milbank 1st, rating some firms that I've had personally bad experiences with poorly (so like 2 firms), vice versa (again, like 2 firms), and leaving everything else blank, if that helps anyone determine how reliable vault surveys are.

I do answer the questions about my firm honestly, but I don't think those play into the vault rankings.

[kengh]

Why are some firms, like Kramer Levin, ranked so low?

[T3TON]

Do we think there’s going to be a major vault shakeup after this?

To me, the subjectively perceived prestige of a firm should absolutely depend in Major part on that firm’s ability not to cut salaries during this time.

Vault rank is actually proving to be surprisingly on the mark here. If you look at our tracker, of the 20 V100s that have frozen/cut pay or conducted layoffs so far, 15 are in the V51-100 tier, and only a quarter - 5 - are V50s. That says something about the relative strength of those firms.

Now, is the argument that the 20 who've announced so far should be ranked V81-100? I'm not sure we can say that for sure. For one thing (unfortunately), the pay cuts/freezes/layoffs are unlikely to stop at the 20 firms that've announced so far. We have to wait for the dust to settle first.

I think this is all showing Vault to be representative of something. The v50 is doing way better than the v100, and none of the v30 has done anything. We shouldn't expect the firms who've announced to be v81-100 because, in addition to things still moving:

1. Nobody thinks vault is perfect by any means. It has all kinds of biases (e.g., New York M&A practices).

2. This crisis is going to affect different firms differently based on practice groups and client base. You'd expect some "randomness" in it. But, all told, you'd expect the average v10 to be better than v90. And that is exactly how this has played out. The firms in the 30s-40s do seem over-represented comparatively, so not sure what is going on there. But, down for speculation.

This may just show the "wisdom of the crowd" in action. Metrics like profit margin have greater predictive utility. Eg Orrick and K&L Gates have high Vault ranks (V34, V40) but low profit margins (23%, 17%).

[Jchance]

This may just show the "wisdom of the crowd" in action. Metrics like profit margin have greater predictive utility. Eg Orrick and K&L Gates have high Vault ranks (V34, V40) but low profit margins (23%, 17%).

Agreed on purely groupthink. I think looking at the profit margin, without knowing how much debt a firm is carrying, is the right approach.

[wisdom]

https://abovethelaw.com/2020/04/foley-hoag-cuts/

15% associate pay cut for Vault No. 98

[ghostoftraynor]

Do we think there’s going to be a major vault shakeup after this?

To me, the subjectively perceived prestige of a firm should absolutely depend in Major part on that firm’s ability not to cut salaries during this time.

Vault rank is actually proving to be surprisingly on the mark here. If you look at our tracker, of the 20 V100s that have frozen/cut pay or conducted layoffs so far, 15 are in the V51-100 tier, and only a quarter - 5 - are V50s. That says something about the relative strength of those firms.

Now, is the argument that the 20 who've announced so far should be ranked V81-100? I'm not sure we can say that for sure. For one thing (unfortunately), the pay cuts/freezes/layoffs are unlikely to stop at the 20 firms that've announced so far. We have to wait for the dust to settle first.

I think this is all showing Vault to be representative of something. The v50 is doing way better than the v100, and none of the v30 has done anything. We shouldn't expect the firms who've announced to be v81-100 because, in addition to things still moving:

1. Nobody thinks vault is perfect by any means. It has all kinds of biases (e.g., New York M&A practices).

2. This crisis is going to affect different firms differently based on practice groups and client base. You'd expect some "randomness" in it. But, all told, you'd expect the average v10 to be better than v90. And that is exactly how this has played out. The firms in the 30s-40s do seem over-represented comparatively, so not sure what is going on there. But, down for speculation.

This may just show the "wisdom of the crowd" in action. Metrics like profit margin have greater predictive utility. Eg Orrick and K&L Gates have high Vault ranks (V34, V40) but low profit margins (23%, 17%).

Yup, obviously agree there are better yardsticks to use. Vault is a highly flawed ranking system. This just seems to be supportive of that general idea that it is somewhat relevant.

[QContinuum]

https://abovethelaw.com/2020/04/foley-hoag-cuts/

15% associate pay cut for Vault No. 98

Thanks, original post updated with Foley.

[plmqazw]

Love the color coding. Thanks for continuously updating, QContinuum!

[Anonymous User]

Love the color coding. Thanks for continuously updating, QContinuum!

Yes, thank you to the mods who have updated the OP!

[wisdom]

https://abovethelaw.com/2020/04/am-law- ... -measures/

Fox Rothschild, Vault No. 85 - 10-15% salary cut for associates

Sorry, I was the poster above who said thanks to the mods, inadvertently made my posting anonymous. Thanks guys!

[QContinuum]

https://abovethelaw.com/2020/04/am-law- ... -measures/

Fox Rothschild, Vault No. 85 - 10-15% salary cut for associates

Sorry, I was the poster above who said thanks to the mods, inadvertently made my posting anonymous. Thanks guys!

Thanks, will put this in!

[2020Graduate]

DLA Piper (v33) has piped up and joined the chat.

Partners’ monthly draws will be reduced beginning on May 1, and partners will defer quarterly distributions for three months. Further, the firm’s reduced profits due to the coronavirus crisis will have an impact on partner pay going forward in 2020.
Pay raises will not be awarded for the first half of the 2020-2021 financial year, and possibly for the entire year, but this will be reviewed in November.
Bonus payments will be delayed, and a decision won’t be made on when such awards will be paid until June.
The firm may ask some people to temporarily reduce their working hours or take sabbaticals.

https://abovethelaw.com/2020/04/top-ran ... d-bonuses/

Assuming no raises and no bonuses, reduced hours, and sabbaticals counts as effect on associate pay.

[Anonymous User]

Does DLA give associate raises and bonuses midyear instead of in December/January? If so that could cause an even bigger financial hit than a 15% paycut.

[wishywashy]

DLA Piper (v33) has piped up and joined the chat.

Partners’ monthly draws will be reduced beginning on May 1, and partners will defer quarterly distributions for three months. Further, the firm’s reduced profits due to the coronavirus crisis will have an impact on partner pay going forward in 2020.
Pay raises will not be awarded for the first half of the 2020-2021 financial year, and possibly for the entire year, but this will be reviewed in November.
Bonus payments will be delayed, and a decision won’t be made on when such awards will be paid until June.
The firm may ask some people to temporarily reduce their working hours or take sabbaticals.

https://abovethelaw.com/2020/04/top-ran ... d-bonuses/

Assuming no raises and no bonuses, reduced hours, and sabbaticals counts as effect on associate pay.

Note these cuts are all EMEA offices and they haven't changed their stance on US offices it seems.

[QContinuum]

Note these cuts are all EMEA offices and they haven't changed their stance on US offices it seems.

Thanks for the clarification. Updated.

I've also updated the titular post to note that even though we have 6 V50s announcing salary cuts/freezes/layoffs vs. 17 V51-100s, only 4 of the 6 V50s have announced measures impacting US associates (whereas all 17 of the V51-100s have announced measures impacting US associates). So really, for US lawyers, it's 4 vs 17, not 6 vs 17.

[QContinuum]

Updated to reflect the potential Boies Schiller move reported by an anonymous TLS poster at http://www.top-law-schools.com/forums/v ... #p10423173 - with the important cautionary caveats that this report (i) has not been reported/vetted by the media, and (ii) even taken at face value, is something that has not (yet?) been officially announced within the firm.

[objctnyrhnr]

DLA Piper (v33) has piped up and joined the chat.

Partners’ monthly draws will be reduced beginning on May 1, and partners will defer quarterly distributions for three months. Further, the firm’s reduced profits due to the coronavirus crisis will have an impact on partner pay going forward in 2020.
Pay raises will not be awarded for the first half of the 2020-2021 financial year, and possibly for the entire year, but this will be reviewed in November.
Bonus payments will be delayed, and a decision won’t be made on when such awards will be paid until June.
The firm may ask some people to temporarily reduce their working hours or take sabbaticals.

https://abovethelaw.com/2020/04/top-ran ... d-bonuses/

Assuming no raises and no bonuses, reduced hours, and sabbaticals counts as effect on associate pay.

I believe DLA is one of those handful of amlaw100 firms where their global and their US are technically different entities.

For our purposes, I still think DLA is a no-cut firm based on atl reporting. More broadly, I don’t think info about what other global firms are doing specifically in other countries is relevant to the discussion. In fact, where a firm doesn’t touch US associates of staff (regardless of what they do with like their office in, say, Australia), I think there’s an argument to be made that it’s unfair to put them on the list at all (after all, if they uphold their commitments to American associates then isn’t that really what we’re after?)

[MarkmanPapers]

Updated to reflect the potential Boies Schiller move reported by an anonymous TLS poster at http://www.top-law-schools.com/forums/v ... #p10423173 - with the important cautionary caveats that this report (i) has not been reported/vetted by the media, and (ii) even taken at face value, is something that has not (yet?) been officially announced within the firm.

This set of defections has been confirmed by multiple reports now.

https://www.law.com/americanlawyer/2020 ... -spalding/

[Sackboy]

I believe DLA is one of those handful of amlaw100 firms where their global and their US are technically different entities.

Yep, the verein firms use localized profit pools.

[QContinuum]

More broadly, I don’t think info about what other global firms are doing specifically in other countries is relevant to the discussion. In fact, where a firm doesn’t touch US associates of staff (regardless of what they do with like their office in, say, Australia), I think there’s an argument to be made that it’s unfair to put them on the list at all (after all, if they uphold their commitments to American associates then isn’t that really what we’re after?)

Agree. I've removed the non-U.S.-only news from the original post. It's meaningless to selectively include non-U.S. news from firms that happen to have a strong U.S. branch.

[Wild Card]

This was late Friday night news:

Shearman & Sterling (V44)

Shearman is offering all of its employees globally the voluntary opportunity to take leaves of three to six months in length, while receiving 30% of their usual pay, according to the firm. Should the employees perform pro bono work during the period, they will receive 40% of their typical pay, according to the firm.

https://www.law360.com/articles/1267114

This is similar to the "voluntary" leave that Bryan Cave is offering its associates.

[objctnyrhnr]

This was late Friday night news:

Shearman & Sterling (V44)

Shearman is offering all of its employees globally the voluntary opportunity to take leaves of three to six months in length, while receiving 30% of their usual pay, according to the firm. Should the employees perform pro bono work during the period, they will receive 40% of their typical pay, according to the firm.

https://www.law360.com/articles/1267114

This is similar to the "voluntary" leave that Bryan Cave is offering its associates.

This seems like a good way to do it. Surprised there aren’t more firms following this.

[filibuster]

Curious as to how many Shearman associates will volunteer