NY GOES TO 180k! IT HAPPENED!!!! (CovingTTTon does a 180! Holder wept.) Forum

[Desert Fox]

[Desert Fox]

[Cobretti]

I don't think there is an unlimited supply of essentially equal replacements, but there are enough that you don't need to raise salaries to get people.

Plus, everyone knows that any move would be met by everyone. so why do it.

Because companies that do billions in revenue a year plan more than 3 years into the future and care about long term recruitment vis a vis attracting the right people to the profession.

lol no fucking way. My firm only recently started talking to 1st years (and only for IP because Finnegan poaches all teh EE's as 1Ls). I've never heard an attorney, let alone one with say, ever talk about attracting OL talent to the field.

Hell a lot of firms dont even give a shit about hiring juniors, they are happy to just take laterals when they need them.

1) you don't work at a compensation setting firm

2) you are Junior and have zero input or insight into long term strategic vision

3) any anecdotal evidence you could possibly have isn't enough to show the billion dollar legal industry is an irrational economic actor, which it would have to be for anything you argue to be true.

Aren't you a fucking 2L?

I'm not saying I have better anecdotal evidence than you, I'm saying your anecdotal evidence is worthless to disprove the given assumption that an industry as big as law would act as a rational actor.

[PMan99]

I'm not saying I have better anecdotal evidence than you, I'm saying your anecdotal evidence is worthless to disprove the given assumption that an industry as big as law would act as a rational actor.

The industry is acting rationally by engaging in oligopolistic coordination to suppress wages.

[Desert Fox]

[PMan99]

I don't think there is an unlimited supply of essentially equal replacements, but there are enough that you don't need to raise salaries to get people.

Plus, everyone knows that any move would be met by everyone. so why do it.

Because companies that do billions in revenue a year plan more than 3 years into the future and care about long term recruitment vis a vis attracting the right people to the profession.

lol no fucking way. My firm only recently started talking to 1st years (and only for IP because Finnegan poaches all teh EE's as 1Ls). I've never heard an attorney, let alone one with say, ever talk about attracting OL talent to the field.

Hell a lot of firms dont even give a shit about hiring juniors, they are happy to just take laterals when they need them.

1) you don't work at a compensation setting firm

2) you are Junior and have zero input or insight into long term strategic vision

3) any anecdotal evidence you could possibly have isn't enough to show the billion dollar legal industry is an irrational economic actor, which it would have to be for anything you argue to be true.

I'm not saying first year salaries will never rise, but you're not examining the issue correctly.

Firms are not the relevant actors. Rainmaking partners are. This wasn't necessarily true 20 years ago when firms had more institutional clients and partners had less mobility, so firms as a unit had more power. Even 10 years ago it was different. But power is only shifting more towards the individual rainmaking partners (both in the service partner vs rainmaker context, and associate vs rainmaker context). That shortens the relevant timeline considerably, given that the youngest are usually in their 40s and many (most) are 60+. This is what you'd expect in a rational setting, btw, since there are many individuals capable of doing the work but very few capable of bringing in clients with the ability to pay large bills.

So ask yourself: In what situation would it make sense for a 60 year old partner to pay his (her) first year associates more. Whatever you come up with will be the situation when first year salaries meaningfully rise.

[Johann]

cobretti not understanding shit about economics to argue he's entitled for a raise because the wheels of the locomotive that is law will shut down without his brialliant mind is hilariously ironic.

[UnicornHunter]

Comp setting firms pretty much hire from the T-14 + top %s of T1/top local schools, right? That's how they evaluate "elite" talent. That's a fixed # of people that the legal-academic complex churns out each year, it doesn't really matter what the inputs are, as far as I know class sizes have been stable at schools that place into BigLaw.

So firms raising salaries to attract 0Ls to the legal industry makes absolutely no sense. The number of elite candidates, as defined be the legal industry, will be the exact same. It's not like firms care about the LSAT score of their 1st years. MAYBE, it makes sense for firms that have a specific need for people with a specific type of background (i.e. Electric engineering) to worry about those people choosing to do something else other than law school on a systematic level. But if that's the case, then an across the board raise is a completely irrationale response. There's a million things they could do (bonuses for EE backgrounds, pay for law school for people with EE degree in return for x year commitment, etc...) that would make more sense and be more effective than an across the board raise.


Right now, firms are still leaving very qualified candidates adrift. It's not like a median student at Fordham doesn't have the mental firepower to do BigLawl. Attracting more people to the industry isn't going to change the equation for firms, who evaluate people using strict curves applied to strict class sizes.

[BigZuck]

Johann's struggles with mental illness, gambling addiction, etc. are fun to watch play out in the lounge but I'm uncomfortable when he starts making DECLARATIVE STATEMENTS about things like economics in on topic posts.

(mods plz)

[Cobretti]

I don't think there is an unlimited supply of essentially equal replacements, but there are enough that you don't need to raise salaries to get people.

Plus, everyone knows that any move would be met by everyone. so why do it.

Because companies that do billions in revenue a year plan more than 3 years into the future and care about long term recruitment vis a vis attracting the right people to the profession.

lol no fucking way. My firm only recently started talking to 1st years (and only for IP because Finnegan poaches all teh EE's as 1Ls). I've never heard an attorney, let alone one with say, ever talk about attracting OL talent to the field.

Hell a lot of firms dont even give a shit about hiring juniors, they are happy to just take laterals when they need them.

1) you don't work at a compensation setting firm

2) you are Junior and have zero input or insight into long term strategic vision

3) any anecdotal evidence you could possibly have isn't enough to show the billion dollar legal industry is an irrational economic actor, which it would have to be for anything you argue to be true.

I'm not saying first year salaries will never rise, but you're not examining the issue correctly.

Firms are not the relevant actors. Rainmaking partners are. This wasn't necessarily true 20 years ago when firms had more institutional clients and partners had less mobility, so firms as a unit had more power. Even 10 years ago it was different. But power is only shifting more towards the individual rainmaking partners (both in the service partner vs rainmaker context, and associate vs rainmaker context). That shortens the relevant timeline considerably, given that the youngest are usually in their 40s and many (most) are 60+. This is what you'd expect in a rational setting, btw, since there are many individuals capable of doing the work but very few capable of bringing in clients with the ability to pay large bills.

So ask yourself: In what situation would it make sense for a 60 year old partner to pay his (her) first year associates more. Whatever you come up with will be the situation when first year salaries meaningfully rise.

I like your argument, and its definitely true for the industry as a whole, but the traditional comp setting firms are the ones that have stayed with the lockstep model and have the narrowest spread of partner comp. There may still be relatively more "rainmakers" at these firms than in the past, but their model still diminishes the effect you bring up.

[dixiecupdrinking]

Bro what on earth do you know about law firms or how they run their business other than what you learned in microecon 101?

[kcdc1]

law firm recruiting is 0 sum. the goal is to have better talent than the competition to attract more business -- not to have more talent in an absolute sense. raising salaries in order to bring more talent into law school makes no sense because the additional talent will be shared with competitors, and will produce no comparative benefit.

what matters more is raising comp to keep your good people from going in house

[jbagelboy]

law firm recruiting is 0 sum. the goal is to have better talent than the competition to attract more business -- not to have more talent in an absolute sense. raising salaries in order to bring more talent into law school makes no sense because the additional talent will be shared with competitors, and will produce no comparative benefit.

what matters more is raising comp to keep your good people from going in house

This isn't true from a long term talent perspective

The best of the best from the Swarthmore's, Stanford's, Pomona's, Williams's, Ivy league research universities, ect. stopped going to law school three or four years ago. Law has been pleading talent to tech and finance (and even the banks have bled to silicon valley). Raising base comp would draw more of the "best and brightest" into law school, and a certain % of those people would go into private practice. On a firm by firm basis this is negligible, but industry wide its a meaningful talent investment when you consider the industries law firms as a whole compete with (and the salary price points).

[BigZuck]

law firm recruiting is 0 sum. the goal is to have better talent than the competition to attract more business -- not to have more talent in an absolute sense. raising salaries in order to bring more talent into law school makes no sense because the additional talent will be shared with competitors, and will produce no comparative benefit.

what matters more is raising comp to keep your good people from going in house

This isn't true from a long term talent perspective

The best of the best from the Swarthmore's, Stanford's, Pomona's, Williams's, Ivy league research universities, ect. stopped going to law school three or four years ago. Law has been pleading talent to tech and finance (and even the banks have bled to silicon valley). Raising base comp would draw more of the "best and brightest" into law school, and a certain % of those people would go into private practice. On a firm by firm basis this is negligible, but industry wide its a meaningful talent investment when you consider the industries law firms as a whole compete with (and the salary price points).

I fully acknowledge the inevitability of NYC to 190K and am proud of the work that I and everyone ITT have done to get us to that point. But, I don't see how a 30K bump in pay (and the bumps to other class years of course) is going to convince someone to just do big law bro who wouldn't have done big law before.

Are you thinking that the New York Times article that would eventually come out about the bump in pay would make people think "Oh yeah, hey, I should jump aboard that train!" If they don't want 160K now I just don't see 190K making a difference.

[Anonymous User]

It would at least make NY firms more competitive geographically. I'm borderline NYC vs other market and a 30k salary boost would make me accept my offer in a heartbeat.

[Tiago Splitter]

It would at least make NY firms more competitive geographically. I'm borderline NYC vs other market and a 30k salary boost would make me accept my offer in a heartbeat.

Until 5 minutes later when the other markets match

[Elston Gunn]

I don't know why, as this thread has gotten earnest, it has started focusing so much on law student recruiting. Clearly the people who need to be bribed are the 3rd years thinking of going in-house or leaving law or whatever other thing. And that's not about competing with other firms, but about competing with QoL. That's a much more plausible explanation for raises.

[Tiago Splitter]

I don't know why, as this thread has gotten earnest, it has started focusing so much on law student recruiting. Clearly the people who need to be bribed are the 3rd years thinking of going in-house or leaving law or whatever other thing. And that's not about competing with other firms, but about competing with QoL. That's a much more plausible explanation for raises.

I think everyone realizes that we just can't (except for Cobretti and I guess jbb) figure out why they always raise rookies when they when raise mid-levels.

[jbagelboy]

I don't know why, as this thread has gotten earnest, it has started focusing so much on law student recruiting. Clearly the people who need to be bribed are the 3rd years thinking of going in-house or leaving law or whatever other thing. And that's not about competing with other firms, but about competing with QoL. That's a much more plausible explanation for raises.

I think everyone realizes that we just can't (except for Cobretti and I guess jbb) figure out why they always raise rookies when they when raise mid-levels.

I'm not substituting one upward pressure on incoming associate salaries for the much more substantial and immediate pressure to retain midlevel talent. I don't think firms need to increase first year salary to increase third year -- the DPW scale, for example, was much more generous to midlevel and senior associates than juniors. Apples and oranges as far as I'm concerned. Hanging on to the lockstep model has downsides, in that many large firms can't hold on to valuable human capital by tempting them with individualized added compensation. Firms that do reward associates with variable compensation are often looked down upon by the risk-averse audience of law students/TLS.

[juzam_djinn]

law firm recruiting is 0 sum. the goal is to have better talent than the competition to attract more business -- not to have more talent in an absolute sense. raising salaries in order to bring more talent into law school makes no sense because the additional talent will be shared with competitors, and will produce no comparative benefit.

what matters more is raising comp to keep your good people from going in house

This isn't true from a long term talent perspective

The best of the best from the Swarthmore's, Stanford's, Pomona's, Williams's, Ivy league research universities, ect. stopped going to law school three or four years ago. Law has been pleading talent to tech and finance (and even the banks have bled to silicon valley). Raising base comp would draw more of the "best and brightest" into law school, and a certain % of those people would go into private practice. On a firm by firm basis this is negligible, but industry wide its a meaningful talent investment when you consider the industries law firms as a whole compete with (and the salary price points).

I fully acknowledge the inevitability of NYC to 190K and am proud of the work that I and everyone ITT have done to get us to that point. But, I don't see how a 30K bump in pay (and the bumps to other class years of course) is going to convince someone to just do big law bro who wouldn't have done big law before.

Are you thinking that the New York Times article that would eventually come out about the bump in pay would make people think "Oh yeah, hey, I should jump aboard that train!" If they don't want 160K now I just don't see 190K making a difference.

You're not thinking the way many academically-gifted striver undergrads think. It's easy to discount a bump in salary as relatively trivial in the grand scheme of things, but when the typical uncreative kid at a top UG considers careers, he/she is thinking about salary, long-term trajectory, prestige (in various forms), and work/life balance. There is overlap amongst these factors, in the sense that higher salary often begets higher prestige, etc. A bump to 190k would bring all-in comp for juniors at many top firms in line with 1st and 2nd year bankers, and if the firm gives stipends instead of salary advances, then the first year comp might actually exceed most BBs. Obviously the long-term earning potential is still higher in finance, but the point is that for some of the top kids at top colleges, the additional comp may very well cause them to take a second look at the legal profession.

And yes, the bump doesn't fully address the barrier to entry that is law school, but in the mind of the prestige-obsessed striver, debt is not a primary consideration.

[Johann]

It would at least make NY firms more competitive geographically. I'm borderline NYC vs other market and a 30k salary boost would make me accept my offer in a heartbeat.

You shouldn't be borderline. Give NYC a reason by not going.

[kcdc1]

law firm recruiting is 0 sum. the goal is to have better talent than the competition to attract more business -- not to have more talent in an absolute sense. raising salaries in order to bring more talent into law school makes no sense because the additional talent will be shared with competitors, and will produce no comparative benefit.

what matters more is raising comp to keep your good people from going in house

This isn't true from a long term talent perspective

The best of the best from the Swarthmore's, Stanford's, Pomona's, Williams's, Ivy league research universities, ect. stopped going to law school three or four years ago. Law has been pleading talent to tech and finance (and even the banks have bled to silicon valley). Raising base comp would draw more of the "best and brightest" into law school, and a certain % of those people would go into private practice. On a firm by firm basis this is negligible, but industry wide its a meaningful talent investment when you consider the industries law firms as a whole compete with (and the salary price points).

You completely missed my point. Adding more talent to the legal field as a whole does not benefit any given law firm. Law firms make money by winning business. They need comparatively strong talent in order to win business. If better talent goes to law school, every firm's level of talent improves, but no firm improves its position relative to others. The tide simply rises, and no strategic advantage accrues to any particular firm. Thus, the notion that firms would raise salaries to lure better 0L's into the legal profession makes no sense.

Other drivers for raising salary make sense. Just not this one.

[jbagelboy]

law firm recruiting is 0 sum. the goal is to have better talent than the competition to attract more business -- not to have more talent in an absolute sense. raising salaries in order to bring more talent into law school makes no sense because the additional talent will be shared with competitors, and will produce no comparative benefit.

what matters more is raising comp to keep your good people from going in house

This isn't true from a long term talent perspective

The best of the best from the Swarthmore's, Stanford's, Pomona's, Williams's, Ivy league research universities, ect. stopped going to law school three or four years ago. Law has been pleading talent to tech and finance (and even the banks have bled to silicon valley). Raising base comp would draw more of the "best and brightest" into law school, and a certain % of those people would go into private practice. On a firm by firm basis this is negligible, but industry wide its a meaningful talent investment when you consider the industries law firms as a whole compete with (and the salary price points).

You completely missed my point. Adding more talent to the legal field as a whole does not benefit any given law firm. Law firms make money by winning business. They need comparatively strong talent in order to win business. If better talent goes to law school, every firm's level of talent improves, but no firm improves its position relative to others. The tide simply rises, and no strategic advantage accrues to any particular firm. Thus, the notion that firms would raise salaries to lure better 0L's into the legal profession makes no sense.

Other drivers for raising salary make sense. Just not this one.

I did miss your point, since you said "law firm recruiting," not market share of clients, but I think what you're actually saying here makes even less sense. Firms want quality hires. Sure, in a perfect world, only your firm would have strong candidates, but each firm still benefits individually when the "tide rises." If three firms that compete for talent amongst each other and take in a substantial number of juniors each year -- say, Cravath, Davis Polk, S&C -- all increased the quality of attorneys, that would benefit all three firms. Law recruiting might be zero sum, but I don't agree the market for legal services is so much a zero sum game that improvements in human capital across the board, or at least across a tier, are no longer a worthy long term investment.

Law firms compete against each other, sure, but they are also facing more significant market pressures from clients related to the transformation of the chief industries we service (large corporations, financial institutions, start ups). In fact, most elite firms have institutional clientele that they represent and will continue to represent, and they couldn't be more aggressive with pitching even if they wanted to since they are conflicted out of most other matters. There are so many factors in play here aside from firm v. firm that disrupt the "zero sum" concept you've alluded to here.

[minnbills]

I just don't buy that there is any shortage of talent that would drive wages higher (for new lawyers). The downward pressure on legal fees is not going to stop any time soon, either.

I think you'll see even more non-equity partnerships and bigger bonuses to senior associates long before an increase in 1st year comp.

[dixiecupdrinking]

But Paul Weiss noticed that median LSAT scores at the T14 are down 2 points! How will they convince clients to keep paying for these dullards when they're junior associates? The only solution is to raise salaries to entice smarter people to join the labor pool they will be hiring from in 3 years.