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

[Anonymous User]

Getting concerned that Covington's statement that this goes back to the previous model of higher NY compensation and to some degree this addresses COL may be the 'out' that some cheap firms use.

Associate salaries haven't changed in a decade, and yet our cost of attendance at the schools they demand has increased something of the order of 25% - whereas it used to be closer to $30k, it's now closer to $40-$50k. We are incurring substantially higher debt loads, and thus monthly payments and interest expense.

Further, other cities, such as the Bay Area, have seen more drastic COL impact that New York.

Profits per partner have increased, associate salaries have not moved, our expenses via debt service and COL have increased and Covington feels that this is a return to the old model and makes any sense?

I guaranty that the highly-regarded firms that fail to follow market will see a bigger lateral outflow post-bonus season and decreased interest at OCI. I may not be jumping ship right away if my firm fails to follow market, but I definitely will make the move in the future because it makes no sense to stay put when a large portion of the market, my peers, are being paid a higher base for the same work.

Here's to hoping more firms don't get cheap and weasel their way out of following market compensation.

Firms that have traditionally attracted top-shelf associates, e.g., Covington, may not survive this move. Virtually every single associate at Covington presently had the opportunity during 2L to go to a firm that is now meeting market pay nationally; they are all tacitly aware that they still have the opportunity to lateral, as well. If the Covington partnership does not meet market in all their offices by the end of next week, other firms will have a bonanza recruiting away all their top associates.

Seriously, though, look through their associate profiles; lots of T3 kids and median associate probably went to a T6. Also, not an insignificant number of HYPS undergrad plus YSH law school resumes. Imagine being a Harvard undergrad and YLS grad -- exactly how would you feel being paid sub-market?

There is no way Covington to can maintain recruitment, particularly in the lateral market. You can always reach further down into a law school class, or down in the rankings (although your clients aren't going to be getting better services for it).

But for laterals who are already in the system, who have some value and can move fairly freely? Who in their right mind would lateral to a lower pay scale for the same work? Further, for the highly credentialed associates at Covington - who in their right mind wouldn't start looking at peer firms, doing the same work, but who are willing to meet the market's demands.

It's going to be a hot lateral market for recruiters come December/January if Covington doesn't budge and if others fail to act with the market.

[sublime]

..

[WinSome]

Do we have V and E confirmation

http://abovethelaw.com/2016/06/branch-o ... atch-180k/

[Anonymous User]

Talked to associate at V&E who confirmed.

[Anonymous User]

There is no way Covington to can maintain recruitment, particularly in the lateral market. You can always reach further down into a law school class, or down in the rankings (although your clients aren't going to be getting better services for it).

But for laterals who are already in the system, who have some value and can move fairly freely? Who in their right mind would lateral to a lower pay scale for the same work? Further, for the highly credentialed associates at Covington - who in their right mind wouldn't start looking at peer firms, doing the same work, but who are willing to meet the market's demands.

It's going to be a hot lateral market for recruiters come December/January if Covington doesn't budge and if others fail to act with the market.

I'm sure there are some people at YSHCCN who will still go to Covington even at sub-market pay, but those will be people who literally had no other options in the V15-V20. You're talking about a degradation of recruited students from those who are considerably above the median to those who are considerably below it. They'd be better off trying their luck at GW or American.

Already, their email is doing irreparable damage to their reputation. They need to fall in line, and do so as soon as possible.

[sublime]

..

[WinSome]

Also, didn't see anyone talking about a Gunderson match yet.
http://abovethelaw.com/2016/06/powerhou ... ssociates/

[Desert Fox]

Who is DC has matched? Covington might be able to hold the like is A&P, WH, Hogan, etc. are behind them.

[Anonymous User]

There is no way Covington to can maintain recruitment, particularly in the lateral market. You can always reach further down into a law school class, or down in the rankings (although your clients aren't going to be getting better services for it).

But for laterals who are already in the system, who have some value and can move fairly freely? Who in their right mind would lateral to a lower pay scale for the same work? Further, for the highly credentialed associates at Covington - who in their right mind wouldn't start looking at peer firms, doing the same work, but who are willing to meet the market's demands.

It's going to be a hot lateral market for recruiters come December/January if Covington doesn't budge and if others fail to act with the market.

I'm sure there are some people at YSHCCN who will still go to Covington even at sub-market pay, but those will be people who literally had no other options in the V15-V20. You're talking about a degradation of recruited students from those who are considerably above the median to those who are considerably below it. They'd be better off trying their luck at GW or American.

Already, their email is doing irreparable damage to their reputation. They need to fall in line, and do so as soon as possible.

Eh - don't buy the irreparable damage bit. If they match (which they will eventually) people will forget in a few weeks.

They took a bit of a gamble to try and signal to other firms - but they will match if they need to and everyone knows that.

[rpupkin]

Already, their email is doing irreparable damage to their reputation.

No it isn't. Y'all are hilarious. Law students/associates have ridiculously short memories. Latham laid off hundreds of first-year associates on the same day--in many cases, ending their legal careers--and yet the firm still has no problem attracting good law students from top schools. Covington's dumb email is trivial by comparison.

If Covington matches market eventually (and I'm sure they will), life will go on as before.

[5ky]

Who is DC has matched? Covington might be able to hold the like is A&P, WH, Hogan, etc. are behind them.

Think Skadden is the biggest match so far. None of the traditional DC firms have moved yet.

[Anonymous User]

Who is DC has matched? Covington might be able to hold the like is A&P, WH, Hogan, etc. are behind them.

Honestly I think Gibson is the one that's going to cause the dominoes to fall. Gibson has a ton of pull in DC - Hogan, A&P, WH, Hogan could too, but of those I think only WH is likely to potentially be a first mover.

If every national firm with a significant DC footprint moves, the DC firms will have to catch up or get left behind.

[jbagelboy]

There is no way Covington to can maintain recruitment, particularly in the lateral market. You can always reach further down into a law school class, or down in the rankings (although your clients aren't going to be getting better services for it).

But for laterals who are already in the system, who have some value and can move fairly freely? Who in their right mind would lateral to a lower pay scale for the same work? Further, for the highly credentialed associates at Covington - who in their right mind wouldn't start looking at peer firms, doing the same work, but who are willing to meet the market's demands.

It's going to be a hot lateral market for recruiters come December/January if Covington doesn't budge and if others fail to act with the market.

I'm sure there are some people at YSHCCN who will still go to Covington even at sub-market pay, but those will be people who literally had no other options in the V15-V20. You're talking about a degradation of recruited students from those who are considerably above the median to those who are considerably below it. They'd be better off trying their luck at GW or American.

Already, their email is doing irreparable damage to their reputation. They need to fall in line, and do so as soon as possible.

there aren't any students getting offers at Covington DC at OCI who had no other offers in the V20, unless they didn't bid on the less selective firms in the V20. This is exaggerating. It's more like people who are DC or bust will consider Sidley, Gibson, Skadden, Simpson, Cleary, and other firms with DC summer classes over Covington this year.

[Anonymous User]

I have a feeling some of these national firms are moving profits from high COL areas to pay for associates in lower COL areas with lower profits to keep their egos in tact and maintain a presence in that market. It's an investment in the market in most cases probably but I don't like that investment atm because it took 9 years to get a raise and I feel like we should get it first before investments go to the lower COLA.

But that's some generalizations and guesses on how it works on a firm by firm basis.

I think that's a very good point with respect to the NY-based firms and associates would certainly have a valid argument to partners for a raise. Skadden and STB come to mind for Houston. Tech firms in Austin is probably a valid investment, but agree about the long payoff window. But, GDC (Dallas) and Kirkland (Houston) were the most profitable offices firmwide on a relative basis (ETA: According to the firm). I think NY associates at Skadden, for example, should be irked though that they are paid the same as Skadden Houston associates. Although, I think most of that office came from NY so it seems like people who thought it would be worth it, and were permitted to, made the jump.

Incoming associate at STB here. We had a firm-wide presentation last summer that showed that the Houston was oddly the firm’s most profitable office. Also in the past year alone, three of STB’s biggest deals (Dell-EMC, Walgreen’s-Rite Aid, and Syngenta) were all brought to the firm by the same partner in Houston (link).

To say that associates in Houston offices of national firms don’t deserve a raise based on profitability may not be right. It’s a personal/business choice to live in NYC and deal with the high COL and state and city tax. It would be a better argument (and probably the only argument) to say attorneys in Texas don’t deserve the raise because of the absence of a state income tax and a low cost of living in Texas. That being said, with VE matching, the Big 3 have to match and Texas firms remain the compensation leaders in the country after COL is accounted for. The equivalent NY salary to $180K in Texas would be close to $310K.

[Anonymous User]

can't believe texas is matching before DC and california

[soj]

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[Br3v]

Lines at Subway outside CovingTTTon looking longer than usual.

sad

I knew Subway valued top tier management but I didn't think GMs made that much. Are they leaving their time at Cov off their resumes?

probably

wouldn't want the stain of CovingTTTon to run an otherwise sterling rezzie

might not be an issue at Quiznos tbh tho

cov refugee unable to enjoy employee CIABATTA TOASTIE on park bench after overhearing milbank bros sipping MOMOFUKU COLD BREW discussing FAT Govt Ks

[Anonymous User]

Rumor within Latham is announcement will come Friday. Previous rumor was today, so take that with a grain of salt

[smaug]

180k in NY is 500k in ND

It is known, khaleesi

[smaug]

Who moves next?

PH?

Need the dominos to keep falling

[Anonymous User]

Incoming associate at STB here. We had a firm-wide presentation last summer that showed that the Houston was oddly the firm’s most profitable office. Also in the past year alone, three of STB’s biggest deals (Dell-EMC, Walgreen’s-Rite Aid, and Syngenta) were all brought to the firm by the same partner in Houston (link).

To say that associates in Houston offices of national firms don’t deserve a raise based on profitability may not be right. It’s a personal/business choice to live in NYC and deal with the high COL and state and city tax. It would be a better argument (and probably the only argument) to say attorneys in Texas don’t deserve the raise because of the absence of a state income tax and a low cost of living in Texas. That being said, with VE matching, the Big 3 have to match and Texas firms remain the compensation leaders in the country after COL is accounted for. The equivalent NY salary to $180K in Texas would be close to $310K.

This.

NYC carries prestige but major deals coupled with lower overhead leads to relatively high profitability for Texas offices. Texas offices still need top talent and have to recruit outside of TX to do so. Thus, $180,000 was the right move by Vinson & Elkins.

Great move on the V&E's part to get in early and continue to establish itself as the top Texas-based law firm and one of the top national law firms.

[Anonymous User]

Incoming associate at STB here. We had a firm-wide presentation last summer that showed that the Houston was oddly the firm’s most profitable office. Also in the past year alone, three of STB’s biggest deals (Dell-EMC, Walgreen’s-Rite Aid, and Syngenta) were all brought to the firm by the same partner in Houston (link).

To say that associates in Houston offices of national firms don’t deserve a raise based on profitability may not be right. It’s a personal/business choice to live in NYC and deal with the high COL and state and city tax. It would be a better argument (and probably the only argument) to say attorneys in Texas don’t deserve the raise because of the absence of a state income tax and a low cost of living in Texas. That being said, with VE matching, the Big 3 have to match and Texas firms remain the compensation leaders in the country after COL is accounted for. The equivalent NY salary to $180K in Texas would be close to $310K.

quoted anon above, I didn't realize the STB Houston office was doing that well. That's impressive. Completely agree with the rest; that was the point I was making earlier in the thread. If you want to make more in NY, NY firms have to raise salaries until the TX firms cry uncle and only match for NY or not at all. Making a raise after 9 years that doesn't even cover inflation, much less the actual COL increase in NY and the increase in law school tuition, is unlikely to do that.

[oblig.lawl.ref]

I have a feeling some of these national firms are moving profits from high COL areas to pay for associates in lower COL areas with lower profits to keep their egos in tact and maintain a presence in that market. It's an investment in the market in most cases probably but I don't like that investment atm because it took 9 years to get a raise and I feel like we should get it first before investments go to the lower COLA.

But that's some generalizations and guesses on how it works on a firm by firm basis.

I think that's a very good point with respect to the NY-based firms and associates would certainly have a valid argument to partners for a raise. Skadden and STB come to mind for Houston. Tech firms in Austin is probably a valid investment, but agree about the long payoff window. But, GDC (Dallas) and Kirkland (Houston) were the most profitable offices firmwide on a relative basis (ETA: According to the firm). I think NY associates at Skadden, for example, should be irked though that they are paid the same as Skadden Houston associates. Although, I think most of that office came from NY so it seems like people who thought it would be worth it, and were permitted to, made the jump.

Incoming associate at STB here. We had a firm-wide presentation last summer that showed that the Houston was oddly the firm’s most profitable office. Also in the past year alone, three of STB’s biggest deals (Dell-EMC, Walgreen’s-Rite Aid, and Syngenta) were all brought to the firm by the same partner in Houston (link).

To say that associates in Houston offices of national firms don’t deserve a raise based on profitability may not be right. It’s a personal/business choice to live in NYC and deal with the high COL and state and city tax. It would be a better argument (and probably the only argument) to say attorneys in Texas don’t deserve the raise because of the absence of a state income tax and a low cost of living in Texas. That being said, with VE matching, the Big 3 have to match and Texas firms remain the compensation leaders in the country after COL is accounted for. The equivalent NY salary to $180K in Texas would be close to $310K.

Yeah I left out Houston for a reason. But I don't think those kind of profits and origination, outside of Oil+Gas has the same kind of history as NYC to say the least. I would be curious what their profits are like in the coming years or averaged out over 10-15 years compared to new york. In a boom and bust business Houston seems like one of the boomiest and bustiest and had been booming more than ever the last several years.

Outside the strangely and most profitable firms in Houston specifically, I think the discussion re NYC, DC, Chicago and Bay Area being bigger profit centers than fly over country stands true.

ETA: the fact that that dude got credit on those mergers certainly does not mean that he originated the business. Someone else probably originated it and brought him on and gave him also worked on credit in the press. So I don't even know that all your arguments are really valid. I will believe that STB's houston office was the most profitable in the boom years preceding this one.

[rpupkin]

Rumor within Latham is announcement will come Friday. Previous rumor was today, so take that with a grain of salt

(Partnership busy figuring out how many junior associates it needs to lay off in order to compensate for salary increase)

[Anonymous User]

The best argument against the current NY salary is that the top firms are clearly a cartel. If that's the argument for why the economics aren't working out "correctly," then I'm behind it 100%.