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

[DELG]

Also there have been raises since 2007 in that many firms scaled back salaries/did away with lockstep so they could compress salaries, and then a bunch of those firms went back to 160k base.

[WestOfTheRest]

I'm just going to keep pointing this out until we get a raise or until people are pissed off enough to do something:

• We haven't had a raise in almost a decade
• Total compensation is actually lower (in non-inflation adjusted terms) across most class years, and it's worth noting that 1st years in 2007 received a bonus of $45K
• PPP has risen steadily since 2007, as much as 75% at some firms
• 2015 was the most active M&A market EVER, topping $2 trillion for the first time
• Average rental price in New York has risen dramatically since 2007
• Average tuition costs have increased by a factor of about 1/3, but it's more at many schools

The only relevant metric is PPP.

The lateral market is not that hot, so they feel no pressure to raise. And they won't.

Recruiters I spoke to in the latter half of the year all felt that the lateral market was fairly hot (admittedly haven't spoken to anyone more recently).

[WestOfTheRest]

Also there have been raises since 2007 in that many firms scaled back salaries/did away with lockstep so they could compress salaries, and then a bunch of those firms went back to 160k base.

The top firms certainly did not, which are the firms that will need to move first anyways. The closest you can get to that is saying that they stopped laying people off.

[DELG]

I'm just going to keep pointing this out until we get a raise or until people are pissed off enough to do something:

• We haven't had a raise in almost a decade
• Total compensation is actually lower (in non-inflation adjusted terms) across most class years, and it's worth noting that 1st years in 2007 received a bonus of $45K
• PPP has risen steadily since 2007, as much as 75% at some firms
• 2015 was the most active M&A market EVER, topping $2 trillion for the first time
• Average rental price in New York has risen dramatically since 2007
• Average tuition costs have increased by a factor of about 1/3, but it's more at many schools

The only relevant metric is PPP.

The lateral market is not that hot, so they feel no pressure to raise. And they won't.

Recruiters I spoke to in the latter half of the year all felt that the lateral market was fairly hot (admittedly haven't spoken to anyone more recently).

If they could just raise for trans, they probably would.

[DELG]

Also there have been raises since 2007 in that many firms scaled back salaries/did away with lockstep so they could compress salaries, and then a bunch of those firms went back to 160k base.

The top firms certainly did not, which are the firms that will need to move first anyways. The closest you can get to that is saying that they stopped laying people off.

Top firms have definitely pulled salary shenanigans (for example Sidley).

[WestOfTheRest]

Also there have been raises since 2007 in that many firms scaled back salaries/did away with lockstep so they could compress salaries, and then a bunch of those firms went back to 160k base.

The top firms certainly did not, which are the firms that will need to move first anyways. The closest you can get to that is saying that they stopped laying people off.

Top firms have definitely pulled salary shenanigans (for example Sidley).

Fair enough, but again, not a firm that will be moving salaries. But Sidley has definitely pulled some shady shit.

[WestOfTheRest]

until people are pissed off enough to do something

what are they gonna do

not take jobs?

1. Stop going to law school at the outset.
2. Take jobs in markets other than NYC.
3. Take alternative jobs. In-house salaries have continued to rise despite the lack of increases in firm salaries and many corporations have started in-house training programs in recent years that weren't available in the past.

Wait are we back to joking around in this thread or is this actually serious?

this individual appears to be serious and is likely a 0L with no actual comprehension of how to get law jerbs

Sorry, you're a first year with what...at most 4 months with a biglaw job?

[DELG]

Also there have been raises since 2007 in that many firms scaled back salaries/did away with lockstep so they could compress salaries, and then a bunch of those firms went back to 160k base.

The top firms certainly did not, which are the firms that will need to move first anyways. The closest you can get to that is saying that they stopped laying people off.

Top firms have definitely pulled salary shenanigans (for example Sidley).

Fair enough, but again, not a firm that will be moving salaries. But Sidley has definitely pulled some shady shit.

I'm just saying there was actually a lot of backslide, at some pretty major players in the market, so to say there haven't been raises doesn't really represent what has happened: really quick advances, backslide, and then what we have now. With that context raising base seems a lot less inevitable, whatever happened with PPP.

[DELG]

You also have to consider the collapses of some firms and serious instability at others, which certainly will make partners hesitant to take on a big increase to overhead.

An interesting metric, if it could be found, would be comparing the ratio of an associate's salary to PPP: my gut is that associate salary around 2007 was at a high relative to PPP totally inconsistent with the history of biglaw.

[WestOfTheRest]

You also have to consider the collapses of some firms and serious instability at others, which certainly will make partners hesitant to take on a big increase to overhead.

An interesting metric, if it could be found, would be comparing the ratio of an associate's salary to PPP: my gut is that associate salary around 2007 was at a high relative to PPP totally inconsistent with the history of biglaw.

I generally agree that there has been a big bifurcation of the legal industry since the crisis. The very top firms have seen revenues skyrocket and PPP shoot through the roof. Other firms are struggling to keep up. An analysis of the top 5, 10, 15, and 20 firms compared to the rest of the firms would be interesting to see.

Point being, the Cravaths, Skaddens, S&Cs, etc., of the world are definitely in a position to raise salaries.

[smaug]

You also have to consider the collapses of some firms and serious instability at others, which certainly will make partners hesitant to take on a big increase to overhead.

An interesting metric, if it could be found, would be comparing the ratio of an associate's salary to PPP: my gut is that associate salary around 2007 was at a high relative to PPP totally inconsistent with the history of biglaw.

I agree that this would be interesting but my gut says that PPP today is also an outlier. Firms are doing very well right now.

[smaug]

That said, in terms of earnest discussion, DELG is clearly right that firms just want to juice PPP and that desire runs against raising comp. only way firms will feel safe in the PPP Rush is if they make a competitor go Dewey

[WestOfTheRest]

That said, in terms of earnest discussion, DELG is clearly right that firms just want to juice PPP and that desire runs against raising comp. only way firms will feel safe in the PPP Rush is if they make a competitor go Dewey

This is obviously true. There's a money grab occurring in the partner ranks. Boomers make up the majority of partners and they are in their last years at the firms. They will grab all they can as an end game.

[smaug]

That isn't even what I'm saying/that seems dumb to me.

You make money by having a real book of business. Firms want rainmakers. PPP gaps lure rainmakers away to more profitable firms. Those firms need to keep the PPP juiced or they will lose the people they poached.

Obviously this doesn't apply the the super genteel firms that don't hire laterals, but how many places don't do lateral partners at this point? And of those that don't how many don't have absurd leverage to make the system work?

[DELG]

You also have to consider the collapses of some firms and serious instability at others, which certainly will make partners hesitant to take on a big increase to overhead.

An interesting metric, if it could be found, would be comparing the ratio of an associate's salary to PPP: my gut is that associate salary around 2007 was at a high relative to PPP totally inconsistent with the history of biglaw.

I generally agree that there has been a big bifurcation of the legal industry since the crisis. The very top firms have seen revenues skyrocket and PPP shoot through the roof. Other firms are struggling to keep up. An analysis of the top 5, 10, 15, and 20 firms compared to the rest of the firms would be interesting to see.

Point being, the Cravaths, Skaddens, S&Cs, etc., of the world are definitely in a position to raise salaries.

But now your arguments for why they should do it, like attracting people to law school, start to fall apart, because that's so few firms and they already get the pick of the litter.

[Monochromatic Oeuvre]

An interesting metric, if it could be found, would be comparing the ratio of an associate's salary to PPP: my gut is that associate salary around 2007 was at a high relative to PPP totally inconsistent with the history of biglaw.

No idea how far back you'd have to go--salary data is pretty spotty before the mid-90s (and there wasn't really a "market wage") and PPP figures are almost impossible to find before 1986 or whenever it was that Amlaw started publishing them. General gist is that law used to pay much less to both partners and associates. But the data we DO have is depressing. For first years, back in 2000, a number of market-paying firms had PPP/come ratios of like 8:1 or 7:1. Even Cravath was 10:1. Now they, along with S&C and Quinn, are over 20:1. I don't have enough data to say for certain, but the amount that is available suggests that ratio is historically high.

[DELG]

An interesting metric, if it could be found, would be comparing the ratio of an associate's salary to PPP: my gut is that associate salary around 2007 was at a high relative to PPP totally inconsistent with the history of biglaw.

No idea how far back you'd have to go--salary data is pretty spotty before the mid-90s (and there wasn't really a "market wage") and PPP figures are almost impossible to find before 1986 or whenever it was that Amlaw started publishing them. General gist is that law used to pay much less to both partners and associates. But the data we DO have is depressing. For first years, back in 2000, a number of market-paying firms had PPP/come ratios of like 8:1 or 7:1. Even Cravath was 10:1. Now they, along with S&C and Quinn, are over 20:1. I don't have enough data to say for certain, but the amount that is available suggests that ratio is historically high.

A partner told me when he started fed clerks and first year associates made the same salary. Not sure what PPP might have been at the time.

[DELG]

That said, in terms of earnest discussion, DELG is clearly right that firms just want to juice PPP and that desire runs against raising comp. only way firms will feel safe in the PPP Rush is if they make a competitor go Dewey

Don't you think the idea of competitors going Dewey makes them shit their pants rather than feel safe

[smaug]

That said, in terms of earnest discussion, DELG is clearly right that firms just want to juice PPP and that desire runs against raising comp. only way firms will feel safe in the PPP Rush is if they make a competitor go Dewey

Don't you think the idea of competitors going Dewey makes them shit their pants rather than feel safe

I think they're in the race exactly so they don't go Dewey.

My point above is that the only way the arms race will really de-escalate is if a big firm or two explodes and everyone comes to their senses.

[DELG]

That said, in terms of earnest discussion, DELG is clearly right that firms just want to juice PPP and that desire runs against raising comp. only way firms will feel safe in the PPP Rush is if they make a competitor go Dewey

Don't you think the idea of competitors going Dewey makes them shit their pants rather than feel safe

I think they're in the race exactly so they don't go Dewey.

My point above is that the only way the arms race will really de-escalate is if a big firm or two explodes and everyone comes to their senses.

I am pretty sure the exact opposite is true

[TLSModBot]

That said, in terms of earnest discussion, DELG is clearly right that firms just want to juice PPP and that desire runs against raising comp. only way firms will feel safe in the PPP Rush is if they make a competitor go Dewey

Don't you think the idea of competitors going Dewey makes them shit their pants rather than feel safe

I think they're in the race exactly so they don't go Dewey.

My point above is that the only way the arms race will really de-escalate is if a big firm or two explodes and everyone comes to their senses.

I am pretty sure the exact opposite is true

Short-term more work goes elsewhere when a firm goes Dewey but it's really unsettling to the legal industry especially given the outside pressures being put on firms to change - it's a sign the golden age of firm growth is well and truly over. If a bunch more continue to go under I don't know how that shakes out for PPP long-run. But in any case the law firm world is more a cartel than a series of independent competitors out to wreck the others.

[DELG]

Yeah I mean I'd say there's a lot of uncertainty about where things are going all the way up and down the vault chain, and I bet that insecurity is bad, not good, for associate salary prospects.

[dixiecupdrinking]

Aside from "it's not fair that salaries are stagnant," what reason is there for firms to increase?

[beepboopbeep]

Aside from "it's not fair that salaries are stagnant," what reason is there for firms to increase?

Almost everyone I know at my school who had the choice to go to boutiques instead of biglaw did so. Maybe they aren't valuing the upper end of the class anymore, perhaps rightly so - any argument that top grades = top biglaw performers isn't super compelling to me, and you can probably snag the tip-top by offering crazy scotus clerk/bristow bonuses or whatever. But the idea would be - they'll raise if they perceive they're losing valuable candidates to firms that wouldn't have the cash flow to match + those candidates are going to take the highest offer.

Or the predatory pricing thing above, I guess

[kcdc1]

Aside from "it's not fair that salaries are stagnant," what reason is there for firms to increase?

Competition with IH positions for talent. More relevant for mid-level and senior salary tho -- most companies aren't looking to hire at entry level because they can't / don't want to invest in the training.