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WSJ: Law firms keep lid on bonuses

By VANESSA O'CONNELL And NATHAN KOPPEL Junior attorneys a...
High-end Pontificating National Party Of The First Part
  12/26/10
...
High-end Pontificating National Party Of The First Part
  12/26/10
yes, yes great article. In particular, I'm kinda curious ...
abusive 180 field hairy legs
  12/26/10
Citibank probably has a pretty good data set.
demanding stimulating theatre
  12/26/10
u think firms have to give that information in order to main...
irate pistol
  12/26/10
I would guess that the firms that sign up to use Citi for th...
demanding stimulating theatre
  12/26/10
Reminder: Firms that Topped the Market WLRK (they will to...
irate pistol
  12/26/10
bizarre fucking times. 2010 was a bridge year between ITE an...
abusive 180 field hairy legs
  12/26/10
Yes, but unfortunately, about 6 to 7 of the firms that match...
irate pistol
  12/26/10
yeah that's cuz cravath set the market and others mostly fol...
abusive 180 field hairy legs
  12/26/10
This is not really surprising. WLRK, Boies, Susman and Kirk...
demanding stimulating theatre
  12/26/10
image in the article: http://si.wsj.net/public/resources/ima...
abusive 180 field hairy legs
  12/26/10
How do I get to bill 1700 and be average and keep my jerb?
arousing twinkling uncleanness
  12/27/10
u often dont, most biglaw associates don't keep their jobs f...
abusive 180 field hairy legs
  12/27/10


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Date: December 26th, 2010 10:47 PM
Author: High-end Pontificating National Party Of The First Part

By VANESSA O'CONNELL And NATHAN KOPPEL

Junior attorneys at many top law firms worked harder in 2010 as the firms relied on leaner staffing, but their year-end bonuses are unlikely to budge much from last year's.

Bonus payments to associates are among the most tangible indicators of the legal industry's health. Many elite law firms are keeping those payments largely unchanged this year, at least partly because business hasn't improved much, say partners at several big firms.

The trend also reflects a reluctance to risk offending clients who worry that increasing pay to associates could translate into higher legal costs, says a partner at one major New York firm.

Regulatory practices at big New York law firms are generally strong this year, say partners and consultants. But the financial crisis slowed the pace of the mergers, acquisitions and private-equity transactions on which the elite firms thrive. Litigation revenue also has lagged as many corporate clients have grown less willing to engage in protracted lawsuits and more apt to prod law firms to charge less for handling court cases.

[LAWBONUS]

Bonuses at many top Wall Street law firms have ranged up to $35,000 this year, about the same as in 2009. That's substantially less than just a few years ago. Base pay for an associate at a leading firm typically starts at around $160,000, as it has since 2007, the firms say. But bonuses at many firms have fallen from as much as $65,000 since then. In addition, some firms occasionally paid "special bonuses" of as much as $50,000.

Meanwhile, average hours billed by associates at the nation's top 50 law firms by revenue rose 7% in 2010, according to Citi Private Bank Law Firm Group. The higher average, which it said was still below the peaks seen in some previous years, was largely the result of staff reductions; the number of associates at the top 50 firms fell by 6.7% through Sept. 30, after declining 1.5% in 2009.

At New York-based Milbank, Tweed, Hadley & McCloy LLP, where bonuses were only slightly above last year's payouts, hours billed by associates were up about 6%, but from "one of the lowest bases we've had in the last decade," says Mel M. Immergut, the firm's chairman. "The actual number of hours is still low compared to what it has historically been," he adds.

Revenue at Milbank Tweed will be up by about 3%, on flat expenses, Mr. Immergut says, adding that profit per partner will be up by 8% to 10%, depending on the firm's year-end collections.

Associates have long been known to grouse about long hours. Their jobs put them at the beck and call of their firm's partners, and they are often saddled with mundane legal tasks. But, after a period of years, their reward can be a partnership that entitles them to share in the firm's business. At top firms, partners can reap more than $2 million a year.

Even so, junior lawyers are increasingly discontented. A recent survey of more than 5,000 third-, fourth- and fifth-year associates by American Lawyer magazine found that job satisfaction has slipped to its lowest point in the past six years. Satisfaction ratings fell at 109 of the 124 firms participating this year and last.

"You're working your rear end off every year," says Danette Lilja, who left Morrison & Foerster LLP's Washington office in April to relocate to Colorado. "You can convince yourself that it's worth it only if there's some payback, and the payback in the law-firm world is more money," she adds..

Keith Wetmore, Morrison & Foerster's chair, says the firm's "goal is to pay competitive compensation."

"The work that used to be done by 10 associates is now being done by six," says T.J. Duane, a New York recruiter who specializes in helping associates find new jobs. Some associates are "very frustrated," he says, and are "thinking, 'The partners are doing well, and I busted my butt for them all year.'"

Few partners, however, are likely to enjoy a banner year. Partners don't get bonuses, but instead get a cut of their firm's profits. At the top 50 firms, profits are likely to show only "modest improvement," according to Citi Private Bank Law Firm Group, and will fall short of pre-recession levels at many firms.

Late last month, New York-based Cravath, Swaine & Moore LLP set the standard for other big firms by being the first to announce bonuses for the year. They ranged from $7,500 for first-years to $35,000 for senior associates. The bulk of those bonuses, which it paid Dec. 10, were little changed from last year, though senior associates got a $5,000 increase.

Willkie Farr & Gallagher LLP; Dewey & LeBoeuf LLP; Akin Gump Strauss Hauer & Feld LLP and Morrison & Foerster, among others, all matched Cravath's bonuses within weeks, and a few exceeded them. Business-litigation specialist Quinn Emanuel Urquhart & Sullivan LLP, for instance, said it would essentially pay 150% of the Cravath standard to associates who billed at least 2,100 hours, though part of the bonus won't be paid until June.

At Akin Gump, associates were counting on bigger bonuses, according to Chad Vance, who left Akin earlier this year for a Detroit firm, which he said offered a better lifestyle. "Bonuses can have a big impact on your yearly savings and how much you can apply to student loans," he said, adding: "If you get $7,500 as a first year [associate bonus], versus $15,000, that is a big chunk of money."

Despite their complaints, however, many associates are likely to stay put at their firms, weary of testing a tenuous job market merely because of bonus frustrations, attorneys and recruiters said.

"It is like this throughout the entire economy, where employees are working harder and devoting more hours to their work than previously, but they are fortunate to have jobs," says Joel A. Rose, a law firm consultant in Cherry Hill, N.J.

Write to Vanessa O'Connell at vanessa.o'connell@wsj.com and Nathan Koppel at nathan.koppel@wsj.com

(http://www.autoadmit.com/thread.php?thread_id=1518872&forum_id=2#16904662)



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Date: December 26th, 2010 11:15 PM
Author: High-end Pontificating National Party Of The First Part



(http://www.autoadmit.com/thread.php?thread_id=1518872&forum_id=2#16904907)



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Date: December 26th, 2010 11:21 PM
Author: abusive 180 field hairy legs

yes, yes great article.

In particular, I'm kinda curious where they got the data on associate billings and revenues. That info isn't on ATL or amlaw as far as I've checked. Wish the article also had more projections and speculations about 2011 and any impact on voluntary attrition

(http://www.autoadmit.com/thread.php?thread_id=1518872&forum_id=2#16904960)



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Date: December 26th, 2010 11:22 PM
Author: demanding stimulating theatre

Citibank probably has a pretty good data set.

(http://www.autoadmit.com/thread.php?thread_id=1518872&forum_id=2#16904967)



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Date: December 26th, 2010 11:33 PM
Author: irate pistol

u think firms have to give that information in order to maintain their lending lines with the bank (serious question)?

(http://www.autoadmit.com/thread.php?thread_id=1518872&forum_id=2#16905015)



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Date: December 26th, 2010 11:45 PM
Author: demanding stimulating theatre

I would guess that the firms that sign up to use Citi for their banking (whether or not this includes a credit line) agree to provide this kind of info in return for getting industry statistics back from Citi - and that's one of the primary benefits to firms of using Citi, since almost every major firm uses them.

(http://www.autoadmit.com/thread.php?thread_id=1518872&forum_id=2#16905084)



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Date: December 26th, 2010 11:34 PM
Author: irate pistol

Reminder: Firms that Topped the Market

WLRK (they will top the market, but when???)

Boies

Kirkland

Susman

Quinn

Cahill

Kaye Scholer

What a fucking bizarre list.



(http://www.autoadmit.com/thread.php?thread_id=1518872&forum_id=2#16905022)



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Date: December 26th, 2010 11:38 PM
Author: abusive 180 field hairy legs

bizarre fucking times. 2010 was a bridge year between ITE and recovery. Different firms are moving out of ITE at different speeds and different managing partners/committees are adjusting to the recovery differently

(http://www.autoadmit.com/thread.php?thread_id=1518872&forum_id=2#16905046)



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Date: December 26th, 2010 11:40 PM
Author: irate pistol

Yes, but unfortunately, about 6 to 7 of the firms that matched cravath (or will match) are no longer in recovery mode and are genuinely doing just fine (my firm included)

(http://www.autoadmit.com/thread.php?thread_id=1518872&forum_id=2#16905060)



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Date: December 26th, 2010 11:43 PM
Author: abusive 180 field hairy legs

yeah that's cuz cravath set the market and others mostly follow. Cravath's TTTness is what makes shit bizarre. While in most years, everyone just follows Cravath, this year, Cravath was SO TTT that a half-dozen firms (the non-locksteppers) feel they can't match

(http://www.autoadmit.com/thread.php?thread_id=1518872&forum_id=2#16905070)



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Date: December 26th, 2010 11:44 PM
Author: demanding stimulating theatre

This is not really surprising. WLRK, Boies, Susman and Kirkland are always on their own scale.

The non-lockstep firms with minimum thresholds typically beat lockstep market for high performers - which accounts for KS, Quinn, Sidley and a multitude of other firms that haven't gotten much press and/or haven't announced yet.



(http://www.autoadmit.com/thread.php?thread_id=1518872&forum_id=2#16905079)



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Date: December 26th, 2010 11:41 PM
Author: abusive 180 field hairy legs

image in the article: http://si.wsj.net/public/resources/images/MK-BI619_LAWBON_NS_20101226160908.jpg

shows that for the biggest 50 firms:

1) average hours billed moved from

2002: 1700

2006: 1800

2009: 1600

2010: 1700

2) associate headcount changed

2007: +6.4%

2008: +8.3%

2009: -1.5% (lots of layoffs, but low voluntary attrition and adding tons of new first years who were hired pre-ITE)

2010: -6.7% (more voluntary attrition, less first years starting)



(http://www.autoadmit.com/thread.php?thread_id=1518872&forum_id=2#16905063)



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Date: December 27th, 2010 12:22 AM
Author: arousing twinkling uncleanness

How do I get to bill 1700 and be average and keep my jerb?

(http://www.autoadmit.com/thread.php?thread_id=1518872&forum_id=2#16905317)



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Date: December 27th, 2010 12:27 AM
Author: abusive 180 field hairy legs

u often dont, most biglaw associates don't keep their jobs for very long

(http://www.autoadmit.com/thread.php?thread_id=1518872&forum_id=2#16905348)