Bonus Rollout (alternate title: law is boned) Forum

[bilbobaggins]

Shit, looks like it'll be the standard E320 instead of the AMG. Sucks for lawyers.

If you're working for Cravath you better not even be considering an E-Class ($50k). S, SL, CL, and CLS is what you should be reasonably aiming for...all AMGs if you're a real man.

LOL. As if the luxo-pigs were anything anyone under 60 should be purchasing. But, I guess if you want to be a "real" old man, go right ahead. And can't drive stick. And want a car with a computer to do your driving for you. I could go on...

[GatorBait09]

Shit, looks like it'll be the standard E320 instead of the AMG. Sucks for lawyers.

If you're working for Cravath you better not even be considering an E-Class ($50k). S, SL, CL, and CLS is what you should be reasonably aiming for...all AMGs if you're a real man.

LOL. As if the luxo-pigs were anything anyone under 60 should be purchasing. But, I guess if you want to be a "real" old man, go right ahead. And can't drive stick. And want a car with a computer to do your driving for you. I could go on...

Well...I mean...you COULD get these cars with the standard manual transmission instead. I used to work for Merc and I can't even remember ever coming across, let alone driving, an SL that was an automatic. S and CLS are more likely to be auto (probably about 50/50), but again...manual is standard with almost all high performance luxury cars no matter the brand.

Take a look at the new SLR AMG. If you wanted that thing in auto I bet Merc would just spit in your face and tell you to get the hell out.

Not that I'm necessarily a huge Mercedes fan, but there are few cars in this price range that I would take over an MB.

[Renzo]

Outrageous. How can anyone live in NYC on only 3.3 times the national median income. I mean COME ON! Last year they were in the 98th percentile of incomes, now they're only in the 94th!

[Leeroy Jenkins]

Outrageous. How can anyone live in NYC on only 3.3 times the national median income. I mean COME ON! Last year they were in the 98th percentile of incomes, now they're only in the 94th!

yea, because the COL in NYC is comparable to the national COL.

[bilbobaggins]

Shit, looks like it'll be the standard E320 instead of the AMG. Sucks for lawyers.

If you're working for Cravath you better not even be considering an E-Class ($50k). S, SL, CL, and CLS is what you should be reasonably aiming for...all AMGs if you're a real man.

LOL. As if the luxo-pigs were anything anyone under 60 should be purchasing. But, I guess if you want to be a "real" old man, go right ahead. And can't drive stick. And want a car with a computer to do your driving for you. I could go on...

Well...I mean...you COULD get these cars with the standard manual transmission instead. I used to work for Merc and I can't even remember ever coming across, let alone driving, an SL that was an automatic. S and CLS are more likely to be auto (probably about 50/50), but again...manual is standard with almost all high performance luxury cars no matter the brand.

Take a look at the new SLR AMG. If you wanted that thing in auto I bet Merc would just spit in your face and tell you to get the hell out.

Not that I'm necessarily a huge Mercedes fan, but there are few cars in this price range that I would take over an MB.

In the US almost all of the cars you listed are very difficult to get in manual. The SL 65 specs don't even mention a manual on the US site. Sad

[Renzo]

Outrageous. How can anyone live in NYC on only 3.3 times the national median income. I mean COME ON! Last year they were in the 98th percentile of incomes, now they're only in the 94th!

yea, because the COL in NYC is comparable to the national COL.

I know, seriously! It's like they're only making $71k in Laramie dollars!

[ScaredWorkedBored]

Outrageous. How can anyone live in NYC on only 3.3 times the national median income. I mean COME ON! Last year they were in the 98th percentile of incomes, now they're only in the 94th!

yea, because the COL in NYC is comparable to the national COL.

Average 2006 weekly wage in Manhattan was $1500 in 2006. Better than the nation, certainly, but also skewed by (a lot of) very high earners. And a Big Law lawyer is still making double that.

You'll live.

[joshikousei]

Outrageous. How can anyone live in NYC on only 3.3 times the national median income. I mean COME ON! Last year they were in the 98th percentile of incomes, now they're only in the 94th!

a $60,000 annual salary in NYC is equivalent to something like $30,000 in houston, tx (COL is about 50% lower) or $35,000 in cleveland (COL is about 40% lower)

you can't afford a 5% downpayment for a shitty apartment in NYC, but you can buy a house and a boat in cleveland off of that salary

[Renzo]

Outrageous. How can anyone live in NYC on only 3.3 times the national median income. I mean COME ON! Last year they were in the 98th percentile of incomes, now they're only in the 94th!

a $60,000 annual salary in NYC is equivalent to something like $30,000 in houston, tx (COL is about 50% lower) or $35,000 in cleveland (COL is about 40% lower)

you can't afford a 5% downpayment for a shitty apartment in NYC, but you can buy a house and a boat in cleveland off of that salary

So, you're telling me that a 1st yr biglaw associate with a puny $5k bonus makes 3.3 times the average median household income, but the cost of living in NYC is 2 times higher that the rest of the country. That kind of math could make my head explode, but I think that means they're making 156% of median household income in cost-adjusted dollars.

Those poor souls. They might have to sell their cars and take the subway like everyone else. That's awful!

[GatorBait09]

Outrageous. How can anyone live in NYC on only 3.3 times the national median income. I mean COME ON! Last year they were in the 98th percentile of incomes, now they're only in the 94th!

a $60,000 annual salary in NYC is equivalent to something like $30,000 in houston, tx (COL is about 50% lower) or $35,000 in cleveland (COL is about 40% lower)

you can't afford a 5% downpayment for a shitty apartment in NYC, but you can buy a house and a boat in cleveland off of that salary

So, you're telling me that a 1st yr biglaw associate with a puny $5k bonus makes 3.3 times the average median household income, but the cost of living in NYC is 2 times higher that the rest of the country. That kind of math could make my head explode, but I think that means they're making 156% of median household income in cost-adjusted dollars.

Those poor souls. They might have to sell their cars and take the subway like everyone else. That's awful!

Probably have to sell blood and sperm too just to make ends meet.

[joshikousei]

So, you're telling me that a 1st yr biglaw associate with a puny $5k bonus makes 3.3 times the average median household income, but the cost of living in NYC is 2 times higher that the rest of the country. That kind of math could make my head explode, but I think that means they're making 156% of median household income in cost-adjusted dollars.

Those poor souls. They might have to sell their cars and take the subway like everyone else. That's awful!

oh, no. i wasn't following the thread - that was just me, not biglaw lawyers.

[Posner]

.

[ToTransferOrNot]

Outrageous. How can anyone live in NYC on only 3.3 times the national median income. I mean COME ON! Last year they were in the 98th percentile of incomes, now they're only in the 94th!

a $60,000 annual salary in NYC is equivalent to something like $30,000 in houston, tx (COL is about 50% lower) or $35,000 in cleveland (COL is about 40% lower)

you can't afford a 5% downpayment for a shitty apartment in NYC, but you can buy a house and a boat in cleveland off of that salary

So, you're telling me that a 1st yr biglaw associate with a puny $5k bonus makes 3.3 times the average median household income, but the cost of living in NYC is 2 times higher that the rest of the country. That kind of math could make my head explode, but I think that means they're making 156% of median household income in cost-adjusted dollars.

Those poor souls. They might have to sell their cars and take the subway like everyone else. That's awful!

To be fair, biglaw lawyers work at least 156% as much as the average job holder, and may have $200k in debt to go along with it.

However, also to be fair, NYC is not twice as expensive as the rest of the country. It is nearly twice as expensive as some of the cheaper locals, but it certainly doesn't have two times the average cost of living.

All of that said, there are lots of people in NYC who survive on 40k a year and have education loans. No matter what way you slice it, $160k a year is a lot of money--taxation, loan payments and high CoL notwithstanding. I feel like a lot of people going in to law school have a really skewed perspective on just how much money it is, because the majority of law students come from relatively privileged backgrounds. Those of us who didn't have a much different perspective on questions of work/life balance and compensation: my parents both worked 2 jobs and our household income never cleared 60k, so I have a really difficult time feeling much pity.

[bahama]

I'm not sure anyone is asking for sympathy for the folks at the big NYC law firms (I mean they at least have a good job which is better than a lot of people with the same credentials who got laid off or no offered can say).

However, it is valid to point out that their salary doesn't go as far as most people (especially those who have never worked in an expensive city) would imagine. In a lot of places in the US you can buy a respectable home and car on $50-60k salary, but in NYC, even with three times the income you are still going to be renting a small apartment and taking the subway/bus.

[ToTransferOrNot]

In the places in the US where you can buy a nice house comfortably on $50k-60k of income, $50-60k/year is much, much higher than the income most people are pulling in. You can't just say "well look, this guy makes $60k in NYC, so he could go make $60k somewhere/anywhere else he desired." Doesn't work that way.

You act like $50k-60k a year jobs are at all common in most places in the country. They aren't. Median *household* incomes are somewhere near 50k a year. Correct me if I'm wrong, but that number includes a whole lot of households with more than one income earner.

I'll say again, the view that people bring to this issue is just flat-out skewed, because most law students come from lives of relative privilege. I understand your argument, but, to be frank, only people from a skewed perspective can say $160k isn't a very large amount of money, notwithstanding any other factors.

[mr.undroppable]

I'll say again, the view that people bring to this issue is just flat-out skewed, because most law students come from lives of relative privilege. I understand your argument, but, to be frank, only people from a skewed perspective can say $160k isn't a very large amount of money, notwithstanding any other factors.

Maybe not all of us went to TTT undergrads and could have easily been in the 100K+ salary range after three years of just working instead of having gone to law school. Also, are you guys really comparing people who have a resume sufficient enough to get hired at Cravath to run of the mill janitors/garbage men making 40K a year in NY? Get real, most people at the top of the T14 had options, not all of them went into law to do PI and that does not entitle you to act holier than thou. Lowered salaries are going to be a disappointment and that does not necessarily mean people are entitled/spoiled/whatever you guys want to call them. Don't hate the player hate the game (and it is ironic you have people on the 'top law schools' forum enjoying the fact attorney salaries are going down - jealous much?).

We aren't in any position to comment on the Cravath bonuses without knowing how much those associates billed. If a first year billed 2600 hours, while being billed out at normal Cravath first year rates, and got that bonus they have a right to be miffed. If they billed 1500 they should just be elated they aren't unemployed. The problem is we have no idea what the reality is but the truth will come out as more firms announce their bonus structures.

[ToTransferOrNot]

"A lot" of you didn't have $100k options coming straight out of undergrad. I'm sure the percentage of people in the T14 who had those options is larger than other law schools, but saying "a lot" (meaning, some significant percentage... do you mean 20%? 50% 80%?) is ridiculous. The majority of law students have undergrad degrees that don't have much practical application.

No one here is happy that lawyers are going to be making less money. That doesn't mean that some people can't objectively acknowledge that young biglaw associates are probably overpaid. It CERTAINLY doesn't mean keep any objective person from recognizing that a $160k salary is a large amount of money, regardless of any other factor you want to throw in there.

Exactly what options did someone working for Cravath have aside from working for a biglaw firm?

I find it amusing when people disparage jobs like "garbage workers" and so on. Ever think there is a reason that those folks get paid more money than many lawyers, despite the education requirements? Think to yourself: how much would someone have to pay YOU to live your entire life working that job?

Edit: By the way, the guy who billed out 2600 hours at Cravath got paid $63.50 per billed hour. Not sure what the billable:non-billable ratio is at Cravath, but even if you say 40% of worked hours are unbilled (which is a high ratio for a billable number that is already excessive,) you're still looking at $38 an hour, which is a lot more than most people, degree or not, make in their first year of employment. Considering that the 40% ratio and the 2600 number are both excessive, that number goes up considerably.

[GeePee]

Maybe not all of us went to TTT undergrads and could have easily been in the 100K+ salary range after three years of just working instead of having gone to law school. Also, are you guys really comparing people who have a resume sufficient enough to get hired at Cravath to run of the mill janitors/garbage men making 40K a year in NY? Get real, most people at the top of the T14 had options, not all of them went into law to do PI and that does not entitle you to act holier than thou. Lowered salaries are going to be a disappointment and that does not necessarily mean people are entitled/spoiled/whatever you guys want to call them. Don't hate the player hate the game (and it is ironic you have people on the 'top law schools' forum enjoying the fact attorney salaries are going down - jealous much?).

This might be one of the most ignorant, entitled comments I've read in my time on TLS.

Congrats on that.

[mr.undroppable]

No one here is happy that lawyers are going to be making less money. That doesn't mean that some people can't objectively acknowledge that young biglaw associates are probably overpaid. It CERTAINLY doesn't mean keep any objective person from recognizing that a $160k salary is a large amount of money, regardless of any other factor you want to throw in there.

Exactly what options did someone working for Cravath have aside from working for a biglaw firm?

I find it amusing when people disparage jobs like "garbage workers" and so on. Ever think there is a reason that those folks get paid more money than many lawyers, despite the education requirements? Think to yourself: how much would someone have to pay YOU to live your entire life working that job?

I wasn't disparaging garbage workers per se, just pointing out that they do not have the same background as people who go to work for Cravath - that is fact and there is nothing wrong with that unless you choose to judge people based on their job. Garbage workers don't make 160K their first year at work for a reason, and it is not because the lawyers are overpaid. For what it's worth associates are only paid what the market values them at, there is no such thing as over/underpaid. If you look at a Cravath associate's hourly wage it would not look great, they are just given the option of working 3000 hours. That is why the "objectively large sum of money" that is 160K is not objectively large if you compare how much an average biglaw associate makes per hour vs. how much they are billed out to the clients at vs. % of that hourly billing charge that goes to a partner.

What could Cravath lawyers do other than biglaw? Generally students at the very top of their class have options, I am sorry you don't want to recognize that. Students can clerk, go to biglaw, get into a DOJ honors program, go to consulting (possibly banking/PE in a better year with a couple years experience at a biglaw firm), go straight into a business if they felt so inclined, etc.

Note that the reason bonuses and high salaries are being paid out is to prevent the associates from leaving for their other options. The ONLY reason salaries will come down is if firms think the associates have no other options and/or the firm unilaterally decides to lower the billing rates or required hours. You cannot ask someone to bill 2400 hours a year at a rate of $350 and then turn around and pay them 120K, that is just robbery on the part of partners (who mostly are service partners or inherited their institutional clients).

[mr.undroppable]

This might be one of the most ignorant, entitled comments I've read in my time on TLS.

Congrats on that.

life sucks, boo hoo hoo. I am fully aware not everyone is given the same chances in life, but I have worked some incredibly awful jobs, probably shittier than anything you would even consider doing (think janitor, public service jobs along the line of garbage man, stuff like that), so I do not feel entitled or ignorant in saying that many people bust their nuts and take out huge loans to go to law school for a reason and that is not to return to whatever shitty lifestyle they grew up with. I don't think I am alone in that sentiment and I don't think it is necessarily a bad thing.

[GeePee]

For what it's worth associates are only paid what the market values them at, there is no such thing as over/underpaid.

There's this thing called economics. They talk about these things called externalities. Market solutions aren't efficient when externalities are present.

So, there is such a thing as overpaid. Sorry to break it to you.

[ToTransferOrNot]

As far as the ad hom goes:

You can rave all you want about how the objective value of $160k is somehow diminished by the fact that you are getting billed out at such a rate that a firm can still make a considerable profit on you. You are worth that amount per hour by virtue of where you work, not what you, personally, bring to the table. Ask all of the laidoff biglaw lawyers about that--their time is suddenly worth a hell of a lot less.

Saying "people can go to biglaw" as an "alternative option" to Cravath doesn't make a whole lot of sense. Do you honestly believe many biglaw firms are going to have bonuses significantly larger than Cravath's this year? Some certainly will--you mention Wachtell, which is in a completely different league--but many won't. Edit: A majority of people in law school--including the fabled T6s, judging by my classmates, anyway--did not have investment banking on the table.

Again, as far as those "other options" biglaw folks have--tell that to the scads of unemployment biglaw folks out there at the moment, and the scads that will be following them in June next year.

Seriously, did you time travel to this thread from 2006?

By the way, I never said it was a bad thing to want to make a lot of money. You don't want to get in to a blue-collar fight with me, yet I am very open about the fact that I'm in this for the money. That said, those facts don't keep me from objectively realizing that $160k is, indeed, a lot of money, and people who make it have very little right to bitch about their bonus amounts, particularly in this market.

[mr.undroppable]

Totransferornot, it sounds like we come from a similar background and choose law for similar reasons so I do not want to argue with you. But, you have to admit, in 2006 or 2009 people who have the credentials to get jobs at elite firms do have some options beyond just Cravath. I was speaking about top students in general when I said biglaw as in, they could go to biglaw or....

Either way salaries are coming way down, and fast, so a first year associates 'worth' is probably not worth arguing about, the market will reach a new price pretty soon.

[bahama]

I'll say again, the view that people bring to this issue is just flat-out skewed, because most law students come from lives of relative privilege. I understand your argument, but, to be frank, only people from a skewed perspective can say $160k isn't a very large amount of money, notwithstanding any other factors.

I don't think there is any one who thinks $160+ k is not a great salary for someone in their mid 20s. However, what I am trying to get across is that money does not go as far as most pre-laws who have never made anything close to that think, especially in an extremely expensive city.

Look at the numbers: $13.3k/mo - taxes - loan repayment (including more than the minimum so you can afford a pay cut in a few years when you leave big law) - NYC rent - work related expenses (wardrobe, meals out, dry cleaning, etc to support 80hr weeks) = not as much as you might assume.

FWIW, I know people making $200k in expensive areas who have a very "middle class" lifestyle. They live in modest homes, drive 5 year old hondas, and have to watch their budget every month and can't just go out and take a vacation or buy a tv whenever they want. Taxes, child care, commuting/work expenses, paying off student loans, saving for retirement/kids college all take a big bite.

[CE2JD]

Am I the only one not surprised at all that associate bonuses were slashed in a bad economy?