Biglaw Salaries going up? Forum

[Monochromatic Oeuvre]

In revenue per lawyer, second-place S&C is closer to something like the 175th ranked firm than is it to Wachtell. That's just a different planet.

Also, if WLRK partners made $5.5M this year, and bonuses were 100% of base when it was $4.4M...I don't even want to think about what bonuses were like there.

I don't think you're getting how PPP is accounted for here. An increase in associate bonuses would be a decrease in the PPP figures.

The one million more that WLRK pulls in RPL is absolutely absurd, though, you're right. They clearly know what they're doing.

Right, but since we don't know if their bonuses are up (or were up last year) we don't know if the figure includes increased associate bonuses and would in fact be even higher if they hadn't.

But hey, they're more like the model we should have. Demand top-level talent, and pay according top-level salaries. If I were at S&C and required to have a 3.7 before they'd even look at me, I'd be pissed they wouldn't pay me more than Cadwalader.

Those fee arrangements really are unique to them, though. Someone who knows Herb Wachtell said he described the firm's practice as "We do everything we can think of, research everything, write memos about everything, and bill for it all. And if a client doesn't like it, they can go somewhere else."

[NEdelton1987]

In revenue per lawyer, second-place S&C is closer to something like the 175th ranked firm than is it to Wachtell. That's just a different planet.

Also, if WLRK partners made $5.5M this year, and bonuses were 100% of base when it was $4.4M...I don't even want to think about what bonuses were like there.

I don't think you're getting how PPP is accounted for here. An increase in associate bonuses would be a decrease in the PPP figures.

The one million more that WLRK pulls in RPL is absolutely absurd, though, you're right. They clearly know what they're doing.

Right, but since we don't know if their bonuses are up (or were up last year) we don't know if the figure includes increased associate bonuses and would in fact be even higher if they hadn't.

But hey, they're more like the model we should have. Demand top-level talent, and pay according top-level salaries. If I were at S&C and required to have a 3.7 before they'd even look at me, I'd be pissed they wouldn't pay me more than Cadwalader.

Those fee arrangements really are unique to them, though. Someone who knows Herb Wachtell said he described the firm's practice as "We do everything we can think of, research everything, write memos about everything, and bill for it all. And if a client doesn't like it, they can go somewhere else."

Does anyone know how the profitabilities of the M&A practices at S&C and Cravath compare to Wachtell? I always thought the profitability of the M&A practices at S&C and Cravath are in Wachtell's neighborhood, and that S&C and Cravath have lower RPLs and PPPs compared to Wachtell because these two full service firms are much more diversified compared to Wachtell. Wachtell, Quinn, etc. are so profitable because they really focus only on the most profitable niches.

[Anonymous User]

Go

Does anyone know how the profitabilities of the M&A practices at S&C and Cravath compare to Wachtell? I always thought the profitability of the M&A practices at S&C and Cravath are in Wachtell's neighborhood, and that S&C and Cravath have lower RPLs and PPPs compared to Wachtell because these two full service firms are much more diversified compared to Wachtell. Wachtell, Quinn, etc. are so profitable because they really focus only on the most profitable niches.

Go look at the 8Ks of companies that have announced mergers. Wachtell advises on basically all of them, not Cravath or S&C (although, both advise on a lot of them). There's no comparison.

[CG614]

Can we return this thread back to its intended purpose? Baseless speculation on when and how much salaries will increase.

[sinfiery]

Can we return this thread back to its intended purpose? Baseless speculation on when and how much salaries will increase.

All the percentages went up. Clearly the trickling down is upon us.

[masque du pantsu]

So imho resources like this:

http://www.mergermarket.com/info/2015/0 ... nd-report/

are the best way to start understanding transactional practice (this example is for M&A) and how firms actually differ. 8-Ks are not going to tell you anything at all except with respect to public company deals, and even then only certain ones: a company like Johnson & Johnson could be buying assets and/or smaller medical device/consumer products divisions/companies left and right and they might never get K-ed because J&J is so huge that it's not material.

And i do think this sort of thing is relevant to the discussion at hand because my prediction is that the firms with the top transactional practices (and forget about vault, not talking vault) that are currently lockstep at $160 plus "market bonus" will continue to compete on comp, even more so than (as we saw with bonus season) they already are. People say people are always going to come work in NYC because of prestige, but that's not really the point: the fact is that fewer people are going to law school, these firms are recruiting the same pool and yes they will dig deeper in each class, but they don't view all associates as interchangeable and if they find themselves not getting all the candidates that they want (losing them to other "prestige"-comparable firms), they will pay to get them, it's probably cheaper to do that than dig really deep and expect attrition.

I agree it will probably be bonus and not base where we see the action because it preserves flexibility and can target any mid-level retention issues as well. But we'll see. I can't say i know what my firm is planning, but i do know this is something they are keeping an eye on.

[WhirledWorld]

.

[Desert Fox]

If firms are worried about retaining midlevels, then once-annual bonuses are a bad way of going about it. Midlevels are still going to jump ship in droves once that direct deposit clears.

But if there were no bonus, they wouldn't even wait for that.

[lhanvt13]

If firms are worried about retaining midlevels, then once-annual bonuses are a bad way of going about it. Midlevels are still going to jump ship in droves once that direct deposit clears.

They should just pay hourly.

[wiz]

Can we return this thread back to its intended purpose? Baseless speculation on when and how much salaries will increase.

A lot of firms increased revenue by 5 to 19%. A 19% increase on 160k would be 190k.

NY to 190.

[TTTooKewl]

Can we return this thread back to its intended purpose? Baseless speculation on when and how much salaries will increase.

A lot of firms increased revenue by 5 to 19%. A 19% increase on 160k would be 190k.

NY to 190.

In 2007, Simpson raised 1st year salary by 10%. 2015 is twice as far into the 21st century as 2007. Therefore, one could reasonably infer 20% raise in 2015 --> NYC to $190k.

[Big Shrimpin]

Can we return this thread back to its intended purpose? Baseless speculation on when and how much salaries will increase.

A lot of firms increased revenue by 5 to 19%. A 19% increase on 160k would be 190k.

NY to 190.

In 2007, Simpson raised 1st year salary by 10%. 2015 is twice as far into the 21st century as 2007. Therefore, one could reasonably infer 20% raise in 2015 --> NYC to $190k.

good point...



WAKE UP PEOPLE

[gaddockteeg]

I don't see big law salaries rising for a longggg time. big law seems to be going the way finance with regards to salary and using bonuses to increase compensation. I personally prefer it this way as it better insulates us and the firm when times aren't as great.

with bonuses almost doubling this last year, i have no problem with our total compensation rising but salary holding steady.

For what it's worth, I worked in finance 1 year before law school and our bonuses were nearly equivalent in size to our salary (65/50). I don't see why biglaw can't or wont do the same. Not sure what all your thoughts are on this.

[trebekismyhero]

I don't see big law salaries rising for a longggg time. big law seems to be going the way finance with regards to salary and using bonuses to increase compensation. I personally prefer it this way as it better insulates us and the firm when times aren't as great.

with bonuses almost doubling this last year, i have no problem with our total compensation rising but salary holding steady.

For what it's worth, I worked in finance 1 year before law school and our bonuses were nearly equivalent in size to our salary (65/50). I don't see why biglaw can't or wont do the same. Not sure what all your thoughts are on this.

You made $115k right out of undergrad? Why the hell did you go to law school?

[gaddockteeg]

I don't see big law salaries rising for a longggg time. big law seems to be going the way finance with regards to salary and using bonuses to increase compensation. I personally prefer it this way as it better insulates us and the firm when times aren't as great.

with bonuses almost doubling this last year, i have no problem with our total compensation rising but salary holding steady.

For what it's worth, I worked in finance 1 year before law school and our bonuses were nearly equivalent in size to our salary (65/50). I don't see why biglaw can't or wont do the same. Not sure what all your thoughts are on this.

You made $115k right out of undergrad? Why the hell did you go to law school?

short answer: i worked at a firm that went under shortly after the 2009 crash.
longer asnwer: i've always wanted to go to law school. just ended up going sooner than i thought.
(edited for semantics)

[MCFC]

Texas to 190???
http://www.dallasnews.com/business/head ... rocket.ece

[BearLaw]

Texas to 190???
http://www.dallasnews.com/business/head ... rocket.ece

No.

There are dozens of corporate attorneys charging that rate, and more will come around. Several of the big offices in Houston and Dallas run most of their partners "discounted" rate at over $850. I would be willing to bet that $1,000/hour + is going to be the norm in places like NYC for corporate partners soon.

Texas will not be the starting point for any market increases anyway.

[blsingindisguise]

160,000 today is about $136,000 in 2006 dollars, and housing, healthcare, and education costs have increased way faster than inflation since then (housing not in all markets of course, but huge in places like NYC). It's still not a bad salary, and maybe salaries were just unreasonably high for a few years, but I think if it doesn't increase in the next few years it could lead to a shortage of talent down the road as people with top credentials stop seeing law as a worthwhile option -- $300K debt and $2000/month to live with roommates might wind up seeming not worth it for $160K to start.

[Johann]

people become lawyers because they are uncreative and out of options for the most part today not because they are bursting at the seams with talent. biglaw doesn't care about talent - they care about a machine with a top law degree.

[MCFC]

Texas to 190???
http://www.dallasnews.com/business/head ... rocket.ece

No.

There are dozens of corporate attorneys charging that rate, and more will come around. Several of the big offices in Houston and Dallas run most of their partners "discounted" rate at over $850. I would be willing to bet that $1,000/hour + is going to be the norm in places like NYC for corporate partners soon.

Texas will not be the starting point for any market increases anyway.

You treated my post with a seriousness it did not deserve.

[blsingindisguise]

people become lawyers because they are uncreative and out of options for the most part today not because they are bursting at the seams with talent. biglaw doesn't care about talent - they care about a machine with a top law degree.

When I say "talent" I use the term loosely -- I don't mean the guy smart enough to create the next Uber, I just mean people competent and smart enough to do Biglaw work, and I really do believe there's a dropoff after the top few percentiles of LSAT (with exceptions I'm sure, you special snowflakes) in ability to do high-level legal work. I've seen it in litigators, a big difference in ability to comprehend nuanced arguments, to anticipate counterarguments, to keep a large universe of facts mentally organized, etc.

[wons]

Texas to 190???
http://www.dallasnews.com/business/head ... rocket.ece

No.

There are dozens of corporate attorneys charging that rate, and more will come around. Several of the big offices in Houston and Dallas run most of their partners "discounted" rate at over $850. I would be willing to bet that $1,000/hour + is going to be the norm in places like NYC for corporate partners soon.

Texas will not be the starting point for any market increases anyway.

You must've been in high school the last time there was salary growth. It was driven by the Bay Area in the dotcom boom. If salaries ever go up (and I doubt they will) it will be because TX or SV drive them up to steal talent from NYC.

[nothingtosee]

Texas to 190???
http://www.dallasnews.com/business/head ... rocket.ece

No.

There are dozens of corporate attorneys charging that rate, and more will come around. Several of the big offices in Houston and Dallas run most of their partners "discounted" rate at over $850. I would be willing to bet that $1,000/hour + is going to be the norm in places like NYC for corporate partners soon.

Texas will not be the starting point for any market increases anyway.

You must've been in high school the last time there was salary growth. It was driven by the Bay Area in the dotcom boom. If salaries ever go up (and I doubt they will) it will be because TX or SV drive them up to steal talent from NYC.

I think this is right. Look at above market paying lit boutiques- almost all based in CA and TX. Gotta raise salary cuz law students eat prestige breakfasts.

[Johann]

people become lawyers because they are uncreative and out of options for the most part today not because they are bursting at the seams with talent. biglaw doesn't care about talent - they care about a machine with a top law degree.

When I say "talent" I use the term loosely -- I don't mean the guy smart enough to create the next Uber, I just mean people competent and smart enough to do Biglaw work, and I really do believe there's a dropoff after the top few percentiles of LSAT (with exceptions I'm sure, you special snowflakes) in ability to do high-level legal work. I've seen it in litigators, a big difference in ability to comprehend nuanced arguments, to anticipate counterarguments, to keep a large universe of facts mentally organized, etc.

There is really no such thing as high-level legal work. Almost everyone in the legal field admits law is not hard work but you have to work hard. Biglaw don't care about your LSAT, they just care about a school name on their website.

[blsingindisguise]

people become lawyers because they are uncreative and out of options for the most part today not because they are bursting at the seams with talent. biglaw doesn't care about talent - they care about a machine with a top law degree.

When I say "talent" I use the term loosely -- I don't mean the guy smart enough to create the next Uber, I just mean people competent and smart enough to do Biglaw work, and I really do believe there's a dropoff after the top few percentiles of LSAT (with exceptions I'm sure, you special snowflakes) in ability to do high-level legal work. I've seen it in litigators, a big difference in ability to comprehend nuanced arguments, to anticipate counterarguments, to keep a large universe of facts mentally organized, etc.

There is really no such thing as high-level legal work. Almost everyone in the legal field admits law is not hard work but you have to work hard. Biglaw don't care about your LSAT, they just care about a school name on their website.

I disagree. I don't think the median LSAT taker can do biglaw work well in most cases. This board skews high and people tend to take for granted a certain level of intellectual ability and competency.