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

[Anonymous User]

Law students take prestige >>> money. It won't hurt them.

covington isn't more prestigious than gibson, wilmerhale, arnold & porter, williams & connolly, ect. Covington is making a dangerous wager that these firms won't up them; it's a bad one.

That's not quite right. Covington made the wager that going out on a limb (i.e., that letter) might give those other firms cover not to raise salaries, which will save all of those firms--including Covington, of course--money. If those other firms end up raising salaries anyway (which seems very likely at this point), Covington will follow.

From an associate relations standpoint, however, you are going to potentially sour things by showing that you really will fight tooth and nail to increase compensation commensurate with a significant portion of peer firms.

Sure, effectively that may not matter - but associates can get pretty pissed off if they feel they are getting stiffed. That absolutely translates into associates being more willing to pick up the phone when a recruiter calls. Imagine any of "gibson, wilmerhale, arnold & porter, williams & connolly" are looking for laterals and pay the increased scale. Do you stick around at Covington because...why? You go do the same work somewhere else where you are guaranteed significantly more money via base salary (not even looking into bonuses, which fluctuate and aren't a sure thing).

[rpupkin]

Law students take prestige >>> money. It won't hurt them.

covington isn't more prestigious than gibson, wilmerhale, arnold & porter, williams & connolly, ect. Covington is making a dangerous wager that these firms won't up them; it's a bad one.

That's not quite right. Covington made the wager that going out on a limb (i.e., that letter) might give those other firms cover not to raise salaries, which will save all of those firms--including Covington, of course--money. If those other firms end up raising salaries anyway (which seems very likely at this point), Covington will follow.

From an associate relations standpoint, however, you are going to potentially sour things by showing that you really will fight tooth and nail to increase compensation commensurate with a significant portion of peer firms.

We've already addressed this. Latham fired a massive number of first-year associates, ending their big law careers, without long-term impacts on the firm's "associate relations" and recruitment. How can you possibly think that Covington's stupid letter--which will be moot when it raises salaries in a few weeks anyway--is worse than what Latham did?

[TLSModBot]

Law students take prestige >>> money. It won't hurt them.

covington isn't more prestigious than gibson, wilmerhale, arnold & porter, williams & connolly, ect. Covington is making a dangerous wager that these firms won't up them; it's a bad one.

That's not quite right. Covington made the wager that going out on a limb (i.e., that letter) might give those other firms cover not to raise salaries, which will save all of those firms--including Covington, of course--money. If those other firms end up raising salaries anyway (which seems very likely at this point), Covington will follow.

From an associate relations standpoint, however, you are going to potentially sour things by showing that you really will fight tooth and nail to increase compensation commensurate with a significant portion of peer firms.

We've already addressed this. Latham fired a massive number of first-year associates, ending their big law careers, without long-term impacts on the firm's "associate relations" and recruitment. How can you possibly think that Covington's stupid letter--which will be moot when it raises salaries in a few weeks anyway--is worse than what Latham did?

It's also more telling that literally no one seems to remember Covington doing this exact same thing back in '07. Memories are short. So long as they eventually get on board, then it's whatever.

[Anonymous User]

Law students take prestige >>> money. It won't hurt them.

covington isn't more prestigious than gibson, wilmerhale, arnold & porter, williams & connolly, ect. Covington is making a dangerous wager that these firms won't up them; it's a bad one.

That's not quite right. Covington made the wager that going out on a limb (i.e., that letter) might give those other firms cover not to raise salaries, which will save all of those firms--including Covington, of course--money. If those other firms end up raising salaries anyway (which seems very likely at this point), Covington will follow.

From an associate relations standpoint, however, you are going to potentially sour things by showing that you really will fight tooth and nail to increase compensation commensurate with a significant portion of peer firms.

We've already addressed this. Latham fired a massive number of first-year associates, ending their big law careers, without long-term impacts on the firm's "associate relations" and recruitment. How can you possibly think that Covington's stupid letter--which will be moot when it raises salaries in a few weeks anyway--is worse than what Latham did?

I don't think the letter is irreparable injury at all - what this really turns on is whether/when they increase the pay scale.

The idea of potentially being laid off is a speculative one, and the circumstances are something most people do not expect to happen in the same way. The market crashed and things fell apart - but when you go to Latham you are not thinking the market is going to crash again while you're there and you'll be OK.

That is VERY different than the definite and immediate difference of "if I join Covington, I'm going to get paid less". Sure, they can probably forestall the raises for a while and not be injured much. But if December/January rolls around and they are not clear about their plan to raise salary, I can't imagine that won't be significant mid-level outflow in the lateral market. As a mid-level at Covington, you'll get your bonus and if they are still not at market, or promising market at a date certain, then how do you not make a move if you were even open to it?

If I was a Covington summer associate right now, I'd 100% be prepared to go to 3L OCI and see what I could make of it - assuming Covington doesn't very clearly signal that an increase will happen in the next couple quarters.

I think you're right that Covington won't be hurt, but that assumes they join the market within 6 months. If they intend to permanently partition their DC office from market salary, I think there is little ability to argue that this won't significantly hurt their recruitment and retention.

[jbagelboy]

Law students take prestige >>> money. It won't hurt them.

covington isn't more prestigious than gibson, wilmerhale, arnold & porter, williams & connolly, ect. Covington is making a dangerous wager that these firms won't up them; it's a bad one.

That's not quite right. Covington made the wager that going out on a limb (i.e., that letter) might give those other firms cover not to raise salaries, which will save all of those firms--including Covington, of course--money. If those other firms end up raising salaries anyway (which seems very likely at this point), Covington will follow.

From an associate relations standpoint, however, you are going to potentially sour things by showing that you really will fight tooth and nail to increase compensation commensurate with a significant portion of peer firms.

We've already addressed this. Latham fired a massive number of first-year associates, ending their big law careers, without long-term impacts on the firm's "associate relations" and recruitment. How can you possibly think that Covington's stupid letter--which will be moot when it raises salaries in a few weeks anyway--is worse than what Latham did?

It's not worse. But you're also underestimating the impact of Latham's move on its reputation. For several years Latham suffered in recruiting, in lateral hiring, and in the perception of law students and young attorneys (drop in vault is but one example). Yes, they have recovered seven years later, but its still mentioned--both on TLS and by actual attorneys in Los Angeles--in reference to Latham. Skadden and Gibson partners to this day will still tell recruits weighing various options that in the downturn they did not screw over their associates the way Latham did. Sure Latham still gets good people, but when choosing between Latham and a peer in LA (and CERTAINLY a peer in new york), there's a presumption against Latham that the firm has to overcome with other treats and culture-specific factors.

[1styearlateral]

It's also more telling that literally no one seems to remember Covington doing this exact same thing back in '07. Memories are short. So long as they eventually get on board, then it's whatever.

Kind of a weird thing to say since it's my recollection you're still a student. 2007 was almost 10 years ago; I doubt there's too many people who graduated law school in 07 trolling these forums... Idk about you, but I wasn't even out of high school in 2007.

[Anonymous User]

FYI - Hogan's a big dog too...just a reminder since 99% of you omit them in favor of talking about Covington, W&C, A&P, and WH.

[Anonymous User]

It's worth noting amid all this discussion that Covington still has not actually committed to raising NY salaries (although it seems inevitable they will). There is some real foot dragging here all around for some reason.

[Anonymous User]

FYI - Hogan's a big dog too...just a reminder since 99% of you omit them in favor of talking about Covington, W&C, A&P, and WH.

hogan associate account spotted

[Anonymous User]

FYI - Hogan's a big dog too...just a reminder since 99% of you omit them in favor of talking about Covington, W&C, A&P, and WH.

Bless your heart.

[soj]

.

[WinSome]

It's also more telling that literally no one seems to remember Covington doing this exact same thing back in '07. Memories are short. So long as they eventually get on board, then it's whatever.

It's not quite right to say the exact same thing. Not every firm publicly laid off nearly 200 associates, in addition to stealth layoffs. I hear excuses such as "every firm has had some layoffs" and "every firm would have mass layoffs if they had to," but neither addresses the fact that Latham's business practice made it more likely than more conservative peer firms that it would "have to" make mass layoffs, and that it did. But yeah, memories are short around here.

I think he meant the exact same thing as they are doing now, not the exact same thing as Latham did. As in, in 2007, they also resisted the salary increase.

[Anonymous User]

This is coming from a mid-level associate who is on his/her recruiting committee. I've been trying to work out the math on this. Assuming a $25k raise on average for associates (roughly taking into account there are more juniors, but mid-levels and seniors get bigger raises). That means a $2.5M increase in associate salaries per 100 associates. Even for firms with a smaller PPP like $1M, that doesn't seem like a huge hit to maintain reputation/not risk effing up recruiting. Am I missing something?

This won't just impact OCI, but also laterals coming in from other firms/clerkships as well as associates many of whom are less than content anyways leaving to other firms to get a market salary. It seems short-sighted to not just raise.

[soj]

.

[Anonymous User]

Law students take prestige >>> money. It won't hurt them.

covington isn't more prestigious than gibson, wilmerhale, arnold & porter, williams & connolly, ect. Covington is making a dangerous wager that these firms won't up them; it's a bad one.

That's not quite right. Covington made the wager that going out on a limb (i.e., that letter) might give those other firms cover not to raise salaries, which will save all of those firms--including Covington, of course--money. If those other firms end up raising salaries anyway (which seems very likely at this point), Covington will follow.

From an associate relations standpoint, however, you are going to potentially sour things by showing that you really will fight tooth and nail to increase compensation commensurate with a significant portion of peer firms.

We've already addressed this. Latham fired a massive number of first-year associates, ending their big law careers, without long-term impacts on the firm's "associate relations" and recruitment. How can you possibly think that Covington's stupid letter--which will be moot when it raises salaries in a few weeks anyway--is worse than what Latham did?

It's not worse. But you're also underestimating the impact of Latham's move on its reputation. For several years Latham suffered in recruiting, in lateral hiring, and in the perception of law students and young attorneys (drop in vault is but one example). Yes, they have recovered seven years later, but its still mentioned--both on TLS and by actual attorneys in Los Angeles--in reference to Latham. Skadden and Gibson partners to this day will still tell recruits weighing various options that in the downturn they did not screw over their associates the way Latham did. Sure Latham still gets good people, but when choosing between Latham and a peer in LA (and CERTAINLY a peer in new york), there's a presumption against Latham that the firm has to overcome with other treats and culture-specific factors.

Can confirm this. Chose a V50 firm with a good reputation for culture and work/life balance over Latham for this reason.

[TLSModBot]

It's also more telling that literally no one seems to remember Covington doing this exact same thing back in '07. Memories are short. So long as they eventually get on board, then it's whatever.

Kind of a weird thing to say since it's my recollection you're still a student. 2007 was almost 10 years ago; I doubt there's too many people who graduated law school in 07 trolling these forums... Idk about you, but I wasn't even out of high school in 2007.

Older (just graduated!) student with 10 year's work experience. I was a legal consultant starting in '06 doing e-discovery work.

And also I recently went through EVERY ATL announcement for the first half of 2007 tracking the NY to 160 updates as they occurred. Got a spreadsheet with all the info if anyone's interested.

[Anonymous User]

This is coming from a mid-level associate who is on his/her recruiting committee. I've been trying to work out the math on this. Assuming a $25k raise on average for associates (roughly taking into account there are more juniors, but mid-levels and seniors get bigger raises). That means a $2.5M increase in associate salaries per 100 associates. Even for firms with a smaller PPP like $1M, that doesn't seem like a huge hit to maintain reputation/not risk effing up recruiting. Am I missing something?

This won't just impact OCI, but also laterals coming in from other firms/clerkships as well as associates many of whom are less than content anyways leaving to other firms to get a market salary. It seems short-sighted to not just raise.

Let's say a firm has 500 associates and the PPP is $1M, that's a pretty big hit every year.

[terpie]

It's also more telling that literally no one seems to remember Covington doing this exact same thing back in '07. Memories are short. So long as they eventually get on board, then it's whatever.

Kind of a weird thing to say since it's my recollection you're still a student. 2007 was almost 10 years ago; I doubt there's too many people who graduated law school in 07 trolling these forums... Idk about you, but I wasn't even out of high school in 2007.

Older (just graduated!) student with 10 year's work experience. I was a legal consultant starting in '06 doing e-discovery work.

And also I recently went through EVERY ATL announcement for the first half of 2007 tracking the NY to 160 updates as they occurred. Got a spreadsheet with all the info if anyone's interested.

Yes, please post. Thanks.

[Anonymous User]

This is coming from a mid-level associate who is on his/her recruiting committee. I've been trying to work out the math on this. Assuming a $25k raise on average for associates (roughly taking into account there are more juniors, but mid-levels and seniors get bigger raises). That means a $2.5M increase in associate salaries per 100 associates. Even for firms with a smaller PPP like $1M, that doesn't seem like a huge hit to maintain reputation/not risk effing up recruiting. Am I missing something?

This won't just impact OCI, but also laterals coming in from other firms/clerkships as well as associates many of whom are less than content anyways leaving to other firms to get a market salary. It seems short-sighted to not just raise.

Let's say a firm has 500 associates and the PPP is $1M, that's a pretty big hit every year.

I get that, but it is still not a huge percentage of the profits if you work out the match. In that example, the additional cost would be $12.5M. Assuming even low leverage-say 150 partners to 500 associates, that takes the PPP from $1M to roughly $920k.

[Anonymous User]

Latham match, all U.S. offices, London, Middle East, Beijing, Shanghai, Hong Kong, and U.S. and U.K. quals in Tokyo. Reflected in July 15 paychecks.

[Anonymous User]

Something like 15 firms have matched in their DC branch offices. Collectively, I am guessing that is something like 2,000 associates in DC who are now on the 180 scale. Also, DC isn't really the kind of city where people only look at firms in that city. Most 2Ls who interview for DC interview for NYC too and many laterals are even open to moving back and forth between DC and other cities. DC tends to be the kind of city people live in for 5 years, then move somewhere else. The DC firms aren't somehow in a separate universe than the rest of biglaw. They'll need to pay market if they want to stay in the tier they're currently in. It is just a matter of when.

[Anonymous User]

Fenwick and WSGR getting embarrassed by Cooley and Gunderson. No doubt the best start-up minded law students will no longer apply to those unprestigious sweatshops. After that it's only a matter of time til their best clients leave for Gunderson as well. Oh well.

[Wolfpac2]

This is coming from a mid-level associate who is on his/her recruiting committee. I've been trying to work out the math on this. Assuming a $25k raise on average for associates (roughly taking into account there are more juniors, but mid-levels and seniors get bigger raises). That means a $2.5M increase in associate salaries per 100 associates. Even for firms with a smaller PPP like $1M, that doesn't seem like a huge hit to maintain reputation/not risk effing up recruiting. Am I missing something?

This won't just impact OCI, but also laterals coming in from other firms/clerkships as well as associates many of whom are less than content anyways leaving to other firms to get a market salary. It seems short-sighted to not just raise.

Let's say a firm has 500 associates and the PPP is $1M, that's a pretty big hit every year.

I get that, but it is still not a huge percentage of the profits if you work out the match. In that example, the additional cost would be $12.5M. Assuming even low leverage-say 150 partners to 500 associates, that takes the PPP from $1M to roughly $920k.

Has anyone done the math with respect to Covington specifically? How badly would they be hurt if they raise in DC?

[xcountryjunkie]

Latham match, all ofices.

It's about time. The silence from the major firms today is ticking me off. Need the 180K momentum to keep rolling.

[bern victim]

Cov isn't highly leveraged so it would hurt them even less