What's The Big Deal Forum

[olagold]

I have been tracking the hoopla of pay raises and want to know what is the big deal if your firm hasn't matched?
From a business sense, it would seem that those firms are being smart to not raise first-year associate salaries, especially as they have not proven themselves in the legal market. $180k is a lot of money (more than most have seen in any job prior to law school). Even with 122k in debt, the average if you went to a private institution, you can still live comfortably with that salary.

[jhett]

Because an associate has roughly the same job responsibilities at every biglaw firm. So if the job is essentially the same, you would want to be at a firm that pays more.

Of course, if a firm cannot afford the raises, it is in the interest of the associates for the firm not to raise because to offset the raises the firm will have to dump some of the associates. But not raising will signal to the associates that the firm is not financially secure enough, and they may seek to lateral for the reason stated above. It can be a vicious circle.

[Anonymous User]

The money is the only thing that keeps people sane in this job. An extra $10K is small potatoes when you’re already making $180K (comes out to $6K after taxes which is $500 a month.. yay?) and id trade it for more job security but I can see why people care.

[Civilservant]

The raises aren't just for first years... if a large firm cant afford to be lockstep, it creates the image that the firm isnt as successful as the firms that are matching.

[unlicensedpotato]

I have been tracking the hoopla of pay raises and want to know what is the big deal if your firm hasn't matched?
From a business sense, it would seem that those firms are being smart to not raise first-year associate salaries, especially as they have not proven themselves in the legal market. $180k is a lot of money (more than most have seen in any job prior to law school). Even with 122k in debt, the average if you went to a private institution, you can still live comfortably with that salary.

Biglaw isn't a normal business because everyone gets paid the same. There's no way to "prove yourself" and earn more money. This is the only way to get a raise, so if your firm doesn't raise, you're now losing out and could be making more money elsewhere for, as was said above, essentially the same job. Plus no biglaw firm is holding back on the basis of some business strategy like you're thinking -- the only reason not to is if you can't afford it, meaning a firm that doesn't raise is signaling its perception that it's in a more precarious financial position than its peers (or, I suppose, that partners think they can get away with it).

[Anonymous User]

As a first year at a firm that has not matched yet:

(1) I plan on being here 2 years max. Long-term health of the firm is a non-factor.

(2) This job controls my life. On pace for 2400 hours. I’m offended by the thought of busting my ass for this firm and receiving less money than someone who bills sub-2000 somewhere else.

(3) I chose my firm over multiple firms that have matched. Firm did a great job pitching itself has a lifestyle firm. If I’m going to work as much or more than associates at sweatshops, I want paid as much.

(4) The firm claims its finances are great. I think the lack of a raise reflects the partners’ hesitancy to make less money.

[olagold]

I appreciate everyone for their commentary and understand the sentiments. Here are my takeaways:

1. Raises indicate firm health and stability
or The willingness of partners to make less money
2. Someone could be weighing going to different firms and money is a big factor

Here are my thoughts/questions:

1. If all of these firms who raised had the money to do so, why wait until one firm sets the standard? and also why match and not make it a number that is calculated based on your firm's profits.
2. Wouldn't the firms also think about charging clients more per/hr for associates that they were just charged less for?
3. There are only but so many positions available to lateral or come in as an entry-level associate at a firm, if you do work at a firm that hasn't increased options are not that plenty.

Last caveat, I do not have feelings one way or another as I don't plan on staying in big law for many years. I just wanted to fully understand the pay raise conversation.

[spyke123]

I appreciate everyone for their commentary and understand the sentiments. Here are my takeaways:

1. Raises indicate firm health and stability
or The willingness of partners to make less money
2. Someone could be weighing going to different firms and money is a big factor

Here are my thoughts/questions:

1. If all of these firms who raised had the money to do so, why wait until one firm sets the standard? and also why match and not make it a number that is calculated based on your firm's profits.
2. Wouldn't the firms also think about charging clients more per/hr for associates that they were just charged less for?
3. There are only but so many positions available to lateral or come in as an entry-level associate at a firm, if you do work at a firm that hasn't increased options are not that plenty.

Last caveat, I do not have feelings one way or another as I don't plan on staying in big law for many years. I just wanted to fully understand the pay raise conversation.

1. Most firms have the money to raise associate salaries in the sense that they aren't going to go bankrupt if they raise. But higher associate salary means less money for partners. If you are a partner, would you raise until you have to? So firms wait around until someone bumps the pay. As mentioned above, once a firm matches, other firms have strong incentive to match.

2. Unlike what may be taught in economics theory, most salaries in the world aren't tied directly to firm profits. That is not how compensation works. This is especially true in biglaw where associate salaries are public information and uniform. Tons of firms with varying profitability pay the same.

3. Yes, firms may raise rates they charge clients.

4. Junior lateral market may not be hot but mid level market is. It isnt that difficult to lateral as a mid level.

To more directly answer your original question, I think it has a lot to do with the fact that biglaw compensation is public and uniform. A slight deviation from the status quo is seen as significant - it just feels odd and insulting to be suddenly making less than your next door neighbor.