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

[redtalun]

BakerHostetler (V65) - 10% pay cut for associates

Can we clarify that this is a 10% annualized pay cut which is effectively a 16% paycut going forward.

[QContinuum]

BakerHostetler (V65) - 10% pay cut for associates

Can we clarify that this is a 10% annualized pay cut which is effectively a 16% paycut going forward.

Yep, I've made that clear in the table, and included the annualized explanation in parentheses (because otherwise folks might be misled into thinking the table isn't accurate, based on Baker's announcement).

[Anonymous User]

Yet BB cut 20% with 42% margins and V&E hasn’t budged with 45% margins. Any theories here? V&E partners taking one for the team?

I'm guessing V&E is generally stronger financially than BB. Note that last year BB fell on several metrics while V&E rose, and V&E is stronger in M&A than BB (which extends beyond oil and gas, even in Texas).

V&E also has a stronger transactional practice, and transactional groups (particularly corporate) are the most profitable. BB has more litigation than V&E does.

[Wild Card]

BakerHostetler (V65) - Alleged unspecified pay cut for associates (see viewtopic.php?f=23&t=304915&start=200#p10425206); alleged paycut not publicly reported

Was reported by ATL today.

Alas, all of the Bakers have fallen. Flight of angels sing you to your rest.

BakerHostetler (V65) - 10% pay cut for associates

Can we clarify that this is a 10% annualized pay cut which is effectively a 16% paycut going forward.

Is this "annualized" business a comically sleazy way to hoodwink the mathematically illiterate?

[The Lsat Airbender]

Is this "annualized" business a comically sleazy way to hoodwink the mathematically illiterate?

I think maybe they put out a memo saying "1st-years lose: $19,000, 2nd-years lose: $20,000 ..."

Like getting preemptively nobonuesed

[Anonymous User]

Sadly, I think many of the law firms layoffs/furloughs tagged as lasting "3 months" or "temporary" will become permanent or indefinite as it's becoming more likely the recovery will be slow and painful (no speedy "V" shaped bounce as was assumed by many a few weeks ago).

[Anonymous User]

Sadly, I think many of the law firms layoffs/furloughs tagged as lasting "3 months" or "temporary" will become permanent or indefinite as it's becoming more likely the recovery will be slow and painful (no speedy "V" shaped bounce as was assumed by many a few weeks ago).

for each person who says it's V there's another who says it's going to be an L, a U, a W, or a hockey stick recovery. Fact is, no one knows. Another fact is, the lockdowns are just now being lifted and companies are also just now settling in to what is a new normal, so we really won't know what to expect for another 4-6 weeks. We're starting to see traditional M&A deals come in the door again and also an uptick in distressed deals, so I'm expecting to be busy in the near future (if I don't get laid off). firm still hasn't moved on anything and continues to say they're not planning anything, but I'm not holding my breath.

[Anonymous User]

Sadly, I think many of the law firms layoffs/furloughs tagged as lasting "3 months" or "temporary" will become permanent or indefinite as it's becoming more likely the recovery will be slow and painful (no speedy "V" shaped bounce as was assumed by many a few weeks ago).

for each person who says it's V there's another who says it's going to be an L, a U, a W, or a hockey stick recovery. Fact is, no one knows. Another fact is, the lockdowns are just now being lifted and companies are also just now settling in to what is a new normal, so we really won't know what to expect for another 4-6 weeks. We're starting to see traditional M&A deals come in the door again and also an uptick in distressed deals, so I'm expecting to be busy in the near future (if I don't get laid off). firm still hasn't moved on anything and continues to say they're not planning anything, but I'm not holding my breath.

Ready for round 2?

[redtalun]

BakerHostetler (V65) - Alleged unspecified pay cut for associates (see viewtopic.php?f=23&t=304915&start=200#p10425206); alleged paycut not publicly reported

Was reported by ATL today.

Alas, all of the Bakers have fallen. Flight of angels sing you to your rest.

BakerHostetler (V65) - 10% pay cut for associates

Can we clarify that this is a 10% annualized pay cut which is effectively a 16% paycut going forward.

Is this "annualized" business a comically sleazy way to hoodwink the mathematically illiterate?

It's a way of putting a smaller headline number. What it means is that they lowered annual salaries by 10%. For 1st years on the Milbank scale, that means total 2020 pay would be 190*0.9=172k. But since they've already been paid on the 190k scale for Jan thru May, it means that the actual paycut is a bit higher to bring the end of year payout down to 172k.

[Anonymous User]

I'm a senior associate at an Amlaw 50 / Vault 50 firm that hasn't taken any austerity measures. So far, everything I hear indicates that the firm will attempt to realistically hit budget target this year. Any other firms with a similar optimistic outlook?

[Anonymous User]

I'm a senior associate at an Amlaw 50 / Vault 50 firm that hasn't taken any austerity measures. So far, everything I hear indicates that the firm will attempt to realistically hit budget target this year. Any other firms with a similar optimistic outlook?

(Same anon) Also, everyone in my regulatory practice group appears to be sufficiently busy.

[objctnyrhnr]

I'm a senior associate at an Amlaw 50 / Vault 50 firm that hasn't taken any austerity measures. So far, everything I hear indicates that the firm will attempt to realistically hit budget target this year. Any other firms with a similar optimistic outlook?

V25 checking in (and we’re not talking like quinn or something) and hearing something similar. Pleasantly surprised with peer firms apparently in very different positions.

[Wild Card]

Pepper Hamilton (V84): 20% pay cut for associates

https://abovethelaw.com/2020/05/biglaw- ... th-merger/

Heartbroken "Pepper":

"What I cannot understand, and what is baffling just about every Pepper attorney I talk to, is that we are proceeding with the Pepper / Troutman merger to be effective on July 1st! . . . Many attorneys are confused as to why we are spending many millions of dollars on merger integration costs, when partners, counsels, associates and staff are taking 20% pay cuts! Why not put that integration money towards employees at a time during which we are all so vulnerable, and hold off on the merger until the times improve? All energy should now be on taking care of our clients and employees, and bringing in whatever new business is out there – not wasting millions of precious dollars on an unnecessary expense during the most critical time in our history. I think the vast majority of Peppers feel this way."

[QContinuum]

Pepper added.

Also added a new "Tally by Decile" feature tracking numbers of impacted firms in each increment of 10 (V1-9, V10-19, and so on). Increments without any impacted firms are green; increments with a minority (1-4) of impacted firms are in orange; increments with 5 or more impacted firms (out of 10) are red.

Overall we see a significant correlation between Vault rank and number of impacted firms as we move down the deciles. But the real "danger zone" - at which we move from a minority of impacted firms to 5+ impacted firms per decile - appears to occur at #60, instead of #50, suggesting the facially appealing "V51-100" grouping may not be reflective of actual firm strength.

[UMich11]

Pepper added.

Also added a new "Tally by Decile" feature tracking numbers of impacted firms in each increment of 10 (V1-9, V10-19, and so on). Increments without any impacted firms are green; increments with a minority (1-4) of impacted firms are in orange; increments with 5 or more impacted firms (out of 10) are red.

Overall we see a significant correlation between Vault rank and number of impacted firms as we move down the deciles. But the real "danger zone" - at which we move from a minority of impacted firms to 5+ impacted firms per decile - appears to occur at #60, instead of #50, suggesting the facially appealing "V51-100" grouping may not be reflective of actual firm strength.

Thanks, helpful, but since Vault is largely the industry's popularity contest, I think the AmLaw numbers would paint a better picture. At the end of the day even prestigious law firms go belly up. Amlaw, while still imperfect since you can't control for factors that impact profit margins (like leverage, non-equity partners, etc.), is less subjective than vault rankings.

[Anonymous User]

Holland & Knight 17.5% for U.S. associates. Smaller cuts for paralegals and staff based on sliding scale tied to compensation level. Some staff furloughs with benefits (no details on numbers).

[QContinuum]

Thanks, helpful, but since Vault is largely the industry's popularity contest, I think the AmLaw numbers would paint a better picture. At the end of the day even prestigious law firms go belly up. Amlaw, while still imperfect since you can't control for factors that impact profit margins (like leverage, non-equity partners, etc.), is less subjective than vault rankings.

The express intent of this thread is to track things by Vault. The title says "V100", not "AmLaw 100". ATL is running an AmLaw tracker, IIRC.

Holland & Knight 17.5% for U.S. associates. Smaller cuts for paralegals and staff based on sliding scale tied to compensation level. Some staff furloughs with benefits (no details on numbers).

Thanks, added.

[ghostoftraynor]

Pepper added.

Also added a new "Tally by Decile" feature tracking numbers of impacted firms in each increment of 10 (V1-9, V10-19, and so on). Increments without any impacted firms are green; increments with a minority (1-4) of impacted firms are in orange; increments with 5 or more impacted firms (out of 10) are red.

Overall we see a significant correlation between Vault rank and number of impacted firms as we move down the deciles. But the real "danger zone" - at which we move from a minority of impacted firms to 5+ impacted firms per decile - appears to occur at #60, instead of #50, suggesting the facially appealing "V51-100" grouping may not be reflective of actual firm strength.

Thanks, helpful, but since Vault is largely the industry's popularity contest, I think the AmLaw numbers would paint a better picture. At the end of the day even prestigious law firms go belly up. Amlaw, while still imperfect since you can't control for factors that impact profit margins (like leverage, non-equity partners, etc.), is less subjective than vault rankings.

Isn't Am100 just based on size? Don't think it would be relevant here. Definitely more interesting to see how this is playing out in Vault.

[QContinuum]

Thanks, helpful, but since Vault is largely the industry's popularity contest, I think the AmLaw numbers would paint a better picture. At the end of the day even prestigious law firms go belly up. Amlaw, while still imperfect since you can't control for factors that impact profit margins (like leverage, non-equity partners, etc.), is less subjective than vault rankings.

Isn't Am100 just based on size? Don't think it would be relevant here. Definitely more interesting to see how this is playing out in Vault.

There's different ways of doing it. You can rank the AmLaw 100 by gross revenue; RPL; PPP; PPL; partner comp. Could potentially be interesting if someone wants to put it together.

[UMich11]

Pepper added.

Also added a new "Tally by Decile" feature tracking numbers of impacted firms in each increment of 10 (V1-9, V10-19, and so on). Increments without any impacted firms are green; increments with a minority (1-4) of impacted firms are in orange; increments with 5 or more impacted firms (out of 10) are red.

Overall we see a significant correlation between Vault rank and number of impacted firms as we move down the deciles. But the real "danger zone" - at which we move from a minority of impacted firms to 5+ impacted firms per decile - appears to occur at #60, instead of #50, suggesting the facially appealing "V51-100" grouping may not be reflective of actual firm strength.

Thanks, helpful, but since Vault is largely the industry's popularity contest, I think the AmLaw numbers would paint a better picture. At the end of the day even prestigious law firms go belly up. Amlaw, while still imperfect since you can't control for factors that impact profit margins (like leverage, non-equity partners, etc.), is less subjective than vault rankings.

Isn't Am100 just based on size? Don't think it would be relevant here. Definitely more interesting to see how this is playing out in Vault.

based on reported revenue, but also proves RPL, PPP, PPL, leverage ranking, etc. PPP is a bit misleading since you can have equity/non-equity and mess with expenses for the sake of reported profits, but RPL is a decent metric. On the commodity side, those who are more efficient here will fare better. I personally think comparing who is taking measures based on the industry's perception of prestige doesn't do much for analyzing who is taking measures and who isn't. Even if we ignore the fact profit numbers are subjective, any objective observer is going to be more interested to see who is taking measures to shore up the business and compare to their profitability and revenue, rather than whose ego is being stroked.

[QContinuum]

I personally think comparing who is taking measures based on the industry's perception of prestige doesn't do much for analyzing who is taking measures and who isn't. Even if we ignore the fact profit numbers are subjective, any objective observer is going to be more interested to see who is taking measures to shore up the business and compare to their profitability and revenue, rather than whose ego is being stroked.

Are you volunteering to pull together this list?

[Wearthewildthingsr]

I think if anything this further cements the fact that Vault is a shit measure to use when comparing firms.

[QContinuum]

I think if anything this further cements the fact that Vault is a shit measure to use when comparing firms.

Okay, you clearly don't like Vault, which is fine, but your argument flies in the face of the facts. Here's the tally by decile:

Tally by Decile:

• 0 V1-9
• 0 V10-19
• 2 V20-29
• 4 V30-39
• 4 V40-49
• 3 V50-59
• 7 V60-69
• 5 V70-79
• 6 V80-89
• 7 V90-99

That doesn't "further cement the fact that Vault is a shit measure". It shows the exact opposite.

[parkslope]

I think if anything this further cements the fact that Vault is a shit measure to use when comparing firms.

Okay, you clearly don't like Vault, which is fine, but your argument flies in the face of the facts. Here's the tally by decile:

Tally by Decile:

• 0 V1-9
• 0 V10-19
• 2 V20-29
• 4 V30-39
• 4 V40-49
• 3 V50-59
• 7 V60-69
• 5 V70-79
• 6 V80-89
• 7 V90-99

That doesn't "further cement the fact that Vault is a shit measure". It shows the exact opposite.

It's striking to me that the prestigious, but not particularly profitable firms like Covington, Arnold & Porter, WilmerHale, etc. are not making cuts while less prestigious firms with similar numbers are. So A&P has not cut while firms with basically the same numbers like Pillsbury and Reed Smith and Holland & Knight have.

My take is that these firms compete with the NY V10 firms for top candidates from YHS, law clerks, etc. and need to maintain salary parity to do so. Even paying $20K less is going to matter to a lot of people. Maybe these firms are just stealthing people.

Vault has its flaws, and there is certainly a strong correlation between Vault prestige and strong numbers, but the correlation isn't perfect. Prestige is a explanatory factor for what is going on and Vault measures that.

[QContinuum]

Vault has its flaws, and there is certainly a strong correlation between Vault prestige and strong numbers, but the correlation isn't perfect. Prestige is a explanatory factor for what is going on and Vault measures that.

Agree. Obviously Vault has serious flaws. It penalizes non-NY-based firms, and it penalizes firms whose primary strength isn't corporate. Litigation boutiques like Irell and Munger, IP boutiques like Fish & Richardson, even regulatory powerhouse Covington are all disadvantaged by Vault.