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

[Tls2016]

http://www.legalbusiness.co.uk/index.ph ... -to-an-end

I don't know why anyone sees 2015 as a good year. That is just one article I'm sure more will be out.

Also, Citibank report says firms are looking at two years by just one year of results because of volatility.
https://www.privatebank.citibank.com/pd ... visory.pdf

[Monochromatic Oeuvre]

I mean, if the standard is just "did firms completely crush it this year," then you just ignore the unspectacular but steady growth (on average--some firms may be down in some years) of elite firm PPP that beat inflation for the sixth consecutive year while real associate comp stagnates or worse, to say nothing of the fact that firms are eventually (likely far down the line, but still) going to have to respond to massive tuition increases.

[Tls2016]

I mean, if the standard is just "did firms completely crush it this year," then you just ignore the unspectacular but steady growth (on average--some firms may be down in some years) of elite firm PPP that beat inflation for the sixth consecutive year while real associate comp stagnates or worse, to say nothing of the fact that firms are eventually (likely far down the line, but still) going to have to respond to massive tuition increases.

I'm thinking the partners may need to feel they are crushing it before they do base raises. Possibly this basically flat growth is what stops them? I'm not sure partners are that aware or concerned about tuition costs. My feeling is that partners think 1st year salary is more than enough and they are out of touch. Maybe the younger partners will have better grasp on reality.

[TLSModBot]

I mean, if the standard is just "did firms completely crush it this year," then you just ignore the unspectacular but steady growth (on average--some firms may be down in some years) of elite firm PPP that beat inflation for the sixth consecutive year while real associate comp stagnates or worse, to say nothing of the fact that firms are eventually (likely far down the line, but still) going to have to respond to massive tuition increases.

You might be overestimating what "steady growth" really means though in the big picture. We're looking at ~3.3% revenue growth (adjusted for inflation) since pre-recession times. That's not per year, btw, that's total.

oh but PPP has gone up 46% in that time because if you can't attract/retain the mid-level partners with mobile books of business then you can't keep your doors open. Also non-equity partner expenses have gone up ~92% in the same time because they make the firm the most money (high rates, clients will actually pay for their services, knowledge experts, etc.)

[Monochromatic Oeuvre]

The "Oh, we can't raise comp because our partners will get poached and we'll collapse" argument makes sense for the Stroocks and Kaye Scholers of the world. It's a pathetic argument for, say, S&C.

Nope, those guys won't care until associate quality gets so shitty that it impedes profitability. That's not just every associate leaving at any lateral opportunity, but the increasingly shitty incoming associates because smart people stopped going to law school five years ago, which is happening and does matter. It won't move the needle anytime soon, but push will eventually come to shove, particular if firm class sizes keep going up.

[legends159]

The "Oh, we can't raise comp because our partners will get poached and we'll collapse" argument makes sense for the Stroocks and Kaye Scholers of the world. It's a pathetic argument for, say, S&C.

Nope, those guys won't care until associate quality gets so shitty that it impedes profitability. That's not just every associate leaving at any lateral opportunity, but the increasingly shitty incoming associates because smart people stopped going to law school five years ago, which is happening and does matter. It won't move the needle anytime soon, but push will eventually come to shove, particular if firm class sizes keep going up.

Law is not rocket science. There won't be a dearth of competent law students coming into law firms. Partners will care when there's a mass exodus like when 30% of s&c's associates left at a time (I think in 2010?), forcing s&c to do a spring bonus to help boost morale.

[Anonymous User]

I personally am trying to leave my nyc firm for a 160 Philly firm. Others will too.

[Anonymous User]

I plan on leaving NY biglaw after 2 years for my home secondary market if comp doesn't move in that time.

[Anonymous User]

I plan on leaving NY biglaw after 2 years for my home secondary market if comp doesn't move in that time.

+1

[Monochromatic Oeuvre]

The "Oh, we can't raise comp because our partners will get poached and we'll collapse" argument makes sense for the Stroocks and Kaye Scholers of the world. It's a pathetic argument for, say, S&C.

Nope, those guys won't care until associate quality gets so shitty that it impedes profitability. That's not just every associate leaving at any lateral opportunity, but the increasingly shitty incoming associates because smart people stopped going to law school five years ago, which is happening and does matter. It won't move the needle anytime soon, but push will eventually come to shove, particular if firm class sizes keep going up.

Law is not rocket science. There won't be a dearth of competent law students coming into law firms. Partners will care when there's a mass exodus like when 30% of s&c's associates left at a time (I think in 2010?), forcing s&c to do a spring bonus to help boost morale.

Incoming associates are not *entirely* fungible. There's a reason firms don't just fire everyone and hire $40k Touro grads, and why they give a shit about the schools they hire from, and why they give a shit about GPA. The number of 165+ LSAT students has gone down for five consecutive years, at the same time summer classes have increased for five consecutive years. I'm not saying GULC's medians went down = NY to 190. Any structural change in Biglaw is not going to happen within the next couple of years. I am saying that as long as it keeps costing more and more to obtain this increasingly shitty job, more and more smart people are not going to bother, and that eventually is unsustainable under the current model. The exact level of competence that is intolerably low, in the aggregate, will be up to the firms.

[kcdc1]

The idea that some V10 firm will raise salaries of its current associates in order to persuade more 21-year-olds to apply to law school tickles me. Not saying they won't raise salaries -- obviously, they will and very soon -- but it won't be to lure 0L's into applying to, e.g., Northwestern.

[Anonymous User]

I plan on leaving NY biglaw after 2 years for my home secondary market if comp doesn't move in that time.

+1

+2

[Anonymous User]

I plan on leaving NY biglaw after 2 years for my home secondary market if comp doesn't move in that time.

+1

+2

+3 seriously I'm out.

[Johann]

I plan on leaving NY biglaw after 2 years for my home secondary market if comp doesn't move in that time.

+1

+2

+3 seriously I'm out.

this is built into the model. beacuse there is 1 fucker out of the 10 of you who wants to be a partner at a white shoe firm and work with the biggest clients with the biggest $$$ .

[Johann]

The "Oh, we can't raise comp because our partners will get poached and we'll collapse" argument makes sense for the Stroocks and Kaye Scholers of the world. It's a pathetic argument for, say, S&C.

Nope, those guys won't care until associate quality gets so shitty that it impedes profitability. That's not just every associate leaving at any lateral opportunity, but the increasingly shitty incoming associates because smart people stopped going to law school five years ago, which is happening and does matter. It won't move the needle anytime soon, but push will eventually come to shove, particular if firm class sizes keep going up.

It doesnt matter! Law just requires hard work, not brains.

[rpupkin]

GULC's medians went down = NY to 190.

Credited.

[Clearly]

I plan on leaving NY biglaw after 2 years for my home secondary market if comp doesn't move in that time.

+1

+2

+3 seriously I'm out.

this is built into the model. beacuse there is 1 fucker out of the 10 of you who wants to be a partner at a white shoe firm and work with the biggest clients with the biggest $$$ .

yeah, but people will bail at a much higher rate than before. The alternative is much more tempting than its ever been now. You can work 2 hours away in Philly for the same salary, better taxes and actually live like a king with rent/property values. Or DE which moved to 160 too, and they practically pay you to occupy apartments there. There's always been competition, but now its indisputably more rational to avoid nyc. Some will stay for the reasons you said, but not enough to avoid 190 for long.

[UnicornHunter]

I plan on leaving NY biglaw after 2 years for my home secondary market if comp doesn't move in that time.

+1

+2

+3 seriously I'm out.

this is built into the model. beacuse there is 1 fucker out of the 10 of you who wants to be a partner at a white shoe firm and work with the biggest clients with the biggest $$$ .

yeah, but people will bail at a much higher rate than before. The alternative is much more tempting than its ever been now. You can work 2 hours away in Philly for the same salary, better taxes and actually live like a king with rent/property values. Or DE which moved to 160 too, and they practically pay you to occupy apartments there. There's always been competition, but now its indisputably more rational to avoid nyc. Some will stay for the reasons you said, but not enough to avoid 190 for long.

Do secondary market firms match NY bone us's and class year raises?

[Johann]

I plan on leaving NY biglaw after 2 years for my home secondary market if comp doesn't move in that time.

+1

+2

+3 seriously I'm out.

this is built into the model. beacuse there is 1 fucker out of the 10 of you who wants to be a partner at a white shoe firm and work with the biggest clients with the biggest $$$ .

yeah, but people will bail at a much higher rate than before. The alternative is much more tempting than its ever been now. You can work 2 hours away in Philly for the same salary, better taxes and actually live like a king with rent/property values. Or DE which moved to 160 too, and they practically pay you to occupy apartments there. There's always been competition, but now its indisputably more rational to avoid nyc. Some will stay for the reasons you said, but not enough to avoid 190 for long.

nah. people choose to live in NYC all the time for irrational reasons because its the best city in the world. there are still lots of lawyers addicted to the bottles and models, which isnt available outside of NYC. between the 2, they arent having any problems with talent. the other cities are having problems with talent - not NYC.

[Clearly]

I plan on leaving NY biglaw after 2 years for my home secondary market if comp doesn't move in that time.

+1

+2

+3 seriously I'm out.

this is built into the model. beacuse there is 1 fucker out of the 10 of you who wants to be a partner at a white shoe firm and work with the biggest clients with the biggest $$$ .

yeah, but people will bail at a much higher rate than before. The alternative is much more tempting than its ever been now. You can work 2 hours away in Philly for the same salary, better taxes and actually live like a king with rent/property values. Or DE which moved to 160 too, and they practically pay you to occupy apartments there. There's always been competition, but now its indisputably more rational to avoid nyc. Some will stay for the reasons you said, but not enough to avoid 190 for long.

nah. people choose to live in NYC all the time for irrational reasons because its the best city in the world. there are still lots of lawyers addicted to the bottles and models, which isnt available outside of NYC. between the 2, they arent having any problems with talent. the other cities are having problems with talent - not NYC.

You might be looking for the NYC -/->190 thread, this is the NYC-->190 thread. Simple mistake really.

[spyke123]

Law firms look at grades and school cuz they want to best available talent, not cuz it requires certain amount of talent to do the work. Gpa/school is all relative; Whether or not overall admission standard goes down, there always will be students eager to work at top law firms.

[rpupkin]

I would like to state for the record my disappointment with the direction of this thread over the past three or four pages.

At a minimum, I would like to see certain posters temporarily banned from TLS for repeatedly making off-topic posts ITT. Thx.

[Anonymous User]

Well I think you really gotta look at it from a historical point of view to see why comp will likely remain flat.

Year-First Year Associate Salaries-Adjusted for Inflation
1990 - $70,000 - $131,298.57
1991 - $70,000 - $123,742.52
1992 - $70,000 - $120,063.45
1993 - $70,000 - $116,678.99
1994 - $70,000 - $113,557.95
1995 - $72,000 - $113,759.51
1996 - $77,000 - $118,647.71
1997 - $80,000 - $119,306.43
1999 - $90,000 - $131,973.03
1999 - $97,000 - $137,981.23
2000 - $125,000 - $175,672.16
2001 - $125,000 - $169,917.38
2002 - $125,000 - $167,321.02
2003 - $125,000 - $163,436.29
2004 - $125,000 - $160,421.18

From the perspectives of the Partners, they probably feel like they are still just correcting for insane arms race that took place right before the Economic Crisis. Law school tuition isn't their concern and why would it be? They're the best paying gig in town by a mile.

[star fox]

I plan on leaving NY biglaw after 2 years for my home secondary market if comp doesn't move in that time.

+1

+2

+3 seriously I'm out.

this is built into the model. beacuse there is 1 fucker out of the 10 of you who wants to be a partner at a white shoe firm and work with the biggest clients with the biggest $$$ .

yeah, but people will bail at a much higher rate than before. The alternative is much more tempting than its ever been now. You can work 2 hours away in Philly for the same salary, better taxes and actually live like a king with rent/property values. Or DE which moved to 160 too, and they practically pay you to occupy apartments there. There's always been competition, but now its indisputably more rational to avoid nyc. Some will stay for the reasons you said, but not enough to avoid 190 for long.

Except people will still go to firms with higher billing requirements for the same amount of comp in more expensive cities because PRESTIGE

[Monochromatic Oeuvre]

The idea that some V10 firm will raise salaries of its current associates in order to persuade more 21-year-olds to apply to law school tickles me. Not saying they won't raise salaries -- obviously, they will and very soon -- but it won't be to lure 0L's into applying to, e.g., Northwestern.

If the causal chain ever came to fruition, I think it would run the other way. It's not "we need to raise salaries so more kids will apply to law school," it's "we have to raise salaries to keep talent, because the ones coming in are no longer adequate replacements."