NY to 210k Forum

[Anonymous User]

I recently talked to a family member who is a partner at a V10 and he said their executive committee is expecting a jump to 210 July 1st. Strap in folks.

[mvp99]

it's not April yet

[2013]

Highly doubtful considering two things:

1) clients will not be happy; and, more importantly

2) a lot of people, including law firm partners, think the economy will slow down in the next year or two. They won’t need those associates then.

[omar.comin]

The extra $20K would make all the sleepless nights worth it!!!

[Calbears123]

If they are "expecting" a bump and plan to match...why not just bump tomorrow and get that sweet sweet publicity.

[JohnnieSockran]

If they are "expecting" a bump and plan to match...why not just bump tomorrow and get that sweet sweet publicity.

Probably multiple reasons, but here's a few I can think of:

1. A firm that already knows it is able to match a move to $210k is probably a firm that already attracts top talent
2. Such a firm probably is more concerned with attracting top clients, because regardless it will continue to get top students
3. And clients would prefer salaries (and therefore their rates) to stay lower
4. The firm can save probably hundreds of thousands of dollars, if not millions, depending how many associates it has, with no downside, due to points #1 and #2.

[Npret]

My uncle works for Nintendo.

[werdrd]

If they are "expecting" a bump and plan to match...why not just bump tomorrow and get that sweet sweet publicity.

1) Why spend money until you have to?
2) The publicity will mean more as the top students are preparing their bids for OCI.

[QContinuum]

I think very unlikely, especially so soon after the move to 190. Also, I don't think firms want the bad publicity (to clients) of having stubs start at 200+. Far more likely that the next salary scale adjustment, whenever it comes, will involve raises for second-years and up, but keep first-years below 200 (maybe a nominal raise to 195).

[Love With The Coco]

Highly doubtful considering two things:

1) clients will not be happy; and, more importantly

2) a lot of people, including law firm partners, think the economy will slow down in the next year or two. They won’t need those associates then.

People who don't like the President have been expecting an economic slow down for the past 2.5 years. That doesn't mean it's actually going to happen and the stock market is fine. Firms don't play that guessing game.

[QContinuum]

Highly doubtful considering two things:

1) clients will not be happy; and, more importantly

2) a lot of people, including law firm partners, think the economy will slow down in the next year or two. They won’t need those associates then.

People who don't like the President have been expecting an economic slow down for the past 2.5 years. That doesn't mean it's actually going to happen and the stock market is fine. Firms don't play that guessing game.

It has nothing to do with liking or not liking DJT, and everything to do with the fact that we are only about half a year away from being in the longest-ever economic expansion in the modern era. If history is any guide, the good times are about to come to an end.

[Love With The Coco]

Highly doubtful considering two things:

1) clients will not be happy; and, more importantly

2) a lot of people, including law firm partners, think the economy will slow down in the next year or two. They won’t need those associates then.

People who don't like the President have been expecting an economic slow down for the past 2.5 years. That doesn't mean it's actually going to happen and the stock market is fine. Firms don't play that guessing game.

It has nothing to do with liking or not liking DJT, and everything to do with the fact that we are only about half a year away from being in the longest-ever economic expansion in the modern era. If history is any guide, the good times are about to come to an end.

Why be a lawyer when you can time the market?

[Npret]

Highly doubtful considering two things:

1) clients will not be happy; and, more importantly

2) a lot of people, including law firm partners, think the economy will slow down in the next year or two. They won’t need those associates then.

People who don't like the President have been expecting an economic slow down for the past 2.5 years. That doesn't mean it's actually going to happen and the stock market is fine. Firms don't play that guessing game.

It has nothing to do with liking or not liking DJT, and everything to do with the fact that we are only about half a year away from being in the longest-ever economic expansion in the modern era. If history is any guide, the good times are about to come to an end.

Why be a lawyer when you can time the market?

Of course firms consider the economy when deciding to make raises. Why wouldn’t they?

My feeling is this idea is bs because I see no pressure on firms to increase salaries.

If salaries are unexpectedly increased, I would expect class sizes to decrease.

[nealric]

Highly doubtful considering two things:

1) clients will not be happy; and, more importantly

2) a lot of people, including law firm partners, think the economy will slow down in the next year or two. They won’t need those associates then.

Regarding 1: it gets trotted out every time there is a 1st year salary increase. But let me say this: as a client, I couldn't care less what law firms pay first year associates. I care what they charge ME. I don't think for a second they would hold off on their annual billing rate increases regardless of what they do to associate salaries.

Sure, every time there is a raise, some legal publication gets a "hot take" that clients are unhappy- but it's more of an assumption that a true representation of what clients are thinking. The mag can always find someone to make the "clients unhappy" statement.

[Npret]

Doesn’t the Citibank annual review always discuss the concerns of clients regarding fees? Maybe that’s mitigated since the recession.

Not just fees but how associate and staff salary plays into that. I could be remembering incorrectly.

[Npret]

https://www.privatebank.citibank.com/iv ... visory.pdf

I haven’t read this yet. Might not deal with raises at all. It’s always interesting.

[LaLiLuLeLo]

Clients should complain about billing a second year out at over $800 rather than the fact that first years may go above some arbitrary salary.

[OneTwoThreeFour]

This is the kind of baseless speculation that keeps me coming back to this forum.

NY to 210 BAYYBEEEEE.

[nealric]

Clients should complain about billing a second year out at over $800 rather than the fact that first years may go above some arbitrary salary.

Exactly. First year salaries and partner billing rates are the two biggest red herrings in legal costs. I have no problem with the $2,000/hr partner if she can solve my problem or answer my question efficiently. A $2,000/hr partner who can answer my question with a 10 minute phone call is a lot cheaper than a $400/hr associate who spends all day researching the answer. I have no problem with the $210k first year associate if the firms are properly amortizing training costs rather than trying to pass the entire cost to the client.

I have a big problem with a second year associate spending 25 hours on some nonsense diligence item I don't care about and didn't ask for. But to be clear, the $2,000/hr partner is probably to blame if the juniors are wasting their time.

At the end of the day, what client should care about is whether they are getting value for their money (i.e. quality work product in relation to the price), and whether the amount spent on legal fees is reasonably proportional to the amounts at stake in the matter. Everything else is just noise.

[Npret]

Clients should complain about billing a second year out at over $800 rather than the fact that first years may go above some arbitrary salary.

Exactly. First year salaries and partner billing rates are the two biggest red herrings in legal costs. I have no problem with the $2,000/hr partner if she can solve my problem or answer my question efficiently. A $2,000/hr partner who can answer my question with a 10 minute phone call is a lot cheaper than a $400/hr associate who spends all day researching the answer. I have no problem with the $210k first year associate if the firms are properly amortizing training costs rather than trying to pass the entire cost to the client.

I have a big problem with a second year associate spending 25 hours on some nonsense diligence item I don't care about and didn't ask for. But to be clear, the $2,000/hr partner is probably to blame if the juniors are wasting their time.

At the end of the day, what client should care about is whether they are getting value for their money (i.e. quality work product in relation to the price), and whether the amount spent on legal fees is reasonably proportional to the amounts at stake in the matter. Everything else is just noise.

I see a correlation between what partners project they can bill and collect and what raises they feel they can give associates.
All that aside, I see absolutely no pressure on firms to raise salaries again and I’ve never seen partners willing to hand out more money without pressure.

[werdrd]

https://www.privatebank.citibank.com/iv ... visory.pdf

I haven’t read this yet. Might not deal with raises at all. It’s always interesting.

Per the Citi report:
"Despite past predictions that law firms would not be able to raise rates, our analysis demonstrated that firms did not sacrifice work as they increased their rates. Nor did the firms who saw the greatest growth in demand achieve this through slowing down rate increases. Rather, demand growth was determined more so by brand than by price. In our view, brand strength and product focus are among the most highly rewarded traits of a law firm in today’s market. In recent years, much of the demand growth has come from high value work—work that is typically undertaken by firms who enjoy a strong brand, and can command high rates. Firms who have established themselves as the go-to practice in a market—whether that be by industry, practice or region—have been able to increase demand for their services while also charging higher rates."

Clients will complain but they will still pay because, as the saying goes, a GC was never fired for hiring Cravath.

[LBJ's Hair]

Why would clients care what salary the first-years are making? They're not billed for the salaries, they're billed for the hours x rate that first-years work at.

If salary increases result in billable rate increases, then sure they'll be pissed, but there's no reason it should. Hourly rates have been trending up since the recession, without these supposedly concomitant increases in associate pay.

[Npret]

Why would clients care what salary the first-years are making? They're not billed for the salaries, they're billed for the hours x rate that first-years work at.

If salary increases result in billable rate increases, then sure they'll be pissed, but there's no reason it should. Hourly rates have been trending up since the recession, without these supposedly concomitant increases in associate pay.

I do understand how billing works. Clients care because, as mentioned above, they don’t want to pay for training juniors. I know the clients who have posted here don’t care. I have heard clients joke, more than once, about art or the views of offices and say they must be paying too much. As everyone seems to agree, clients object to paying more for legal work just because the firm gives a raise to associates. So where is the money for the raises going to come from?

Wasn’t the first raise in 10 years a few years ago? I’m sure it was post recession, so I don’t agree that salaries haven’t increased. You understand that costs increase apart from salaries.

My experience of big law is partners don’t lightly part with their money. I have yet to see anyone post a reason why firms would need to give raises at this time.

They could have kept the salary at $160,000 and still filled their classes.

Just my view.

[TheBlueDevil]

I do understand how billing works. Clients care because, as mentioned above, they don’t want to pay for training juniors. I know the clients who have posted here don’t care. I have heard clients joke, more than once, about art or the views of offices and say they must be paying too much. As everyone seems to agree, clients object to paying more for legal work just because the firm gives a raise to associates. So where is the money for the raises going to come from?

Wasn’t the first raise in 10 years a few years ago? I’m sure it was post recession, so I don’t agree that salaries haven’t increased. You understand that costs increase apart from salaries.

My experience of big law is partners don’t lightly part with their money. I have yet to see anyone post a reason why firms would need to give raises at this time.

They could have kept the salary at $160,000 and still filled their classes.

Just my view.

Occasional jokes are hardly evidence of meaningful opposition to increasing first-year salaries.

And, even though there may have been little reason to do so, firms have increased salaries past $160k, twice: first to $180k in June 2016, then $190k in June 2018.

[Bllljd115]

Billing rates are always going up. They will go up until clients stop paying them. They would go up regardless of associate salary increases because of AmLaw and the need for firms to maintain consistent revenue growth so they don't lose partners to other firms. And whether salaries move up will depend on whether firms think that they are at risk of losing capacity because they are overstretched.

This year I think the economic uncertainty will allow firms to avoid raising salaries, but if we continue to see strong demand we'll probably see another summer bonus paid.