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Associate salary wars spread

As the media reports a flurry of recent pay raises for associates at major New York and California firms, the salary wars are spreading to the South.

Columbia, SC-based firm Nelson Mullins Riley & Scarborough announced yesterday that associate attorneys in the firm’s North Carolina and Georgia offices will receive starting salaries of $115,000 per year, a 15% increase. First-year associates at the South Carolina branch will earn $95,000.

Last year, the Charlotte, NC-based firm Moore & Van Allen pushed starting associate salaries from $100,000 to $115,000. This move proved profitable for Moore & Van Allen, which became the first Charlotte firm to offer starting salaries in the six-figure range in 2000. Nelson Mullins hopes to follow in Moore & Van Allen’s footsteps in 2006. Managing partner David Dukes claims the salary increase will secure the future of the firm and attract top law school graduates.

The firm plans to announce further salary increases for more experienced associates in the coming weeks.


Brobeck has harsh words for former employees

An ad hoc committee formed by former Brobeck, Phleger & Harrison attorneys has drawn the ire of Brobeck’s bankruptcy trustee Ronald Greenspan.

Brobeck closed its doors nearly three years ago. Last week, Greenspan issued harsh words for the ad hoc committee that is attempting to secure a better settlement agreement from Brobeck. Greenspan criticized the committee in a three-page letter, deeming their efforts selfish and their motives suspect.

Attorney Scott McNutt of McNutt & Litteneker has fired back, calling Greenspan’s claims baseless and hysterical. According to McNutt, the $4.4 million settlement offered by Brobeck is insufficient and will leave some former employees with payments of less than $5,000.

Greenspan maintains that a greater dollar-value settlement will not be possible. He also stated that McNutt is taking advantage of the former Brobeck employees, citing McNutt’s contingency fee. McNutt holds that he has not received a penny from any former Brobeck employee.

Later today, a formal explanation of the settlement offered by the trustees is expected.

01-24-2006

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Bigger bonuses signal the greatest increase in combined law firm revenues in last four years

2006 has brought hefty bonuses for associates at several big law firms across the country. Many top New York firms have announced bonuses in the range of $30,000 to $60,000 for junior associates, up from a maximum of $50,000 in 2004. The nation’s 100 biggest money-makers grossed combined revenues of $46 billion, the largest increase in four years, according to The American Lawyer, a sister publication of The National Law Journal. Partner profits climbed by 9% to an average of $960,000 per partner. Joel Henning, director of law firm consultant Hildebrandt International, says the firms who have gained the most “want to share the wealth.”

• In 2003, behemoth DLA Piper Rudnick Gray Cary, the 3,159-attorney firm created from two mergers, announced bonuses of up to $65,000, a 10% increase.


• In 2004, New York’s Sullivan & Cromwell, with 627 attorneys, announced bonuses ranging from $30,000 for first-year lawyers to $50,000 for senior associates.


• Following this announcement, several other big New York firms, including Milbank, Tweed, Hadley & McCloy; Cravath, Swaine & Moore; and Clifford Chance, disclosed that their year-end bonuses were $10,000 higher than the previous year.


• In 2005, Houston’s Susman & Godfrey gave many of its associates a walloping $150,000 in year-end perks, an increase from about $110,000 in 2004.


• Skadden, Arps, Slate, Meagher & Flom said last year that it was offering bonuses of up to $60,000, but that the lower end of the range was $15,000.


• Morrison & Foerster, which has its biggest office in San Francisco, is also giving bonuses within the New York law firm range of $30,000 to $60,000, said Chairman Keith Wetmore.


• Bryan Cave, the 730-attorney firm with its largest office in St. Louis, is dishing out associates the same bonuses as 2004 and 2005, ranging from $20,000 to $40,000.


• Chicago’s 1,292-lawyer firm Mayer, Brown, Rowe & Maw gave out $30,000 to $50,000 bonuses in 2004 but declined to provide 2005’s numbers. Greenberg Traurig also did not provide bonus information.

01-23-2006

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Pay checks hiked at Latham & Watkins

Latham & Watkins has decided it will raise the salaries of its first-year associates by $10,000 to $135,000 and all other years by $5,000—an increase on par with the recent salary hikes of other law firms. Latham is the last of the big four Los Angeles-based firms to hike associate salaries.

Following in the footsteps of Irell & Manella and other midsize firms, Gibson, Dunn & Crutcher also informed its attorneys of the raises in December 2005. O’Melveny & Myers and Paul, Hastings, Janofsky & Walker also increased pay scales earlier this month.

Second-year associate salaries vary. While Paul Hastings raised second-year salaries by $10,000 to $145,000, the second-year salaries at many other major Los Angeles firms rose $5,000 to $140,000 per year.

These raises do not apply to the New York offices of Latham & Watkins. The firm said it will continue to monitor the market to determine compensation package there.

01-23-2006

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Associates Enjoy Cherries on the Cake!!

Large Texas firms burnt with envy when their counterparts at Houston’s Susman Godfrey, a 76-lawyer litigation boutique paid its associates year-end bonuses ranging from $86,000 to $150,000.

2005 was second to Susman’s best-ever performance in the year 2004 – no wonder the stunningly high bonuses averaged 75 percent of each associates base-year salary.

Also associates with Texas law firms were jealous when they heard that Houston’s Vinson & Elkins received a special bonus on 30th Dec 2005 which landed an extra $10,000 dollars in their pockets.

2005 hasn’t been an exceptionally good year for just V&E. Associates with Houston’s Chamberlain, Hrdlicka, White, Williams & Martin also received supplementary bonuses ranging from $2,000 to $11,000 this month. Wayne Risoli, Managing Shareholder also says the firm’s profit went up by about 40 percent per partner as compared to 2004. So the partners thought of sharing these profits with the associates.

The bonuses paid to Texas associates were more or less the same as the fiscal year 2004 or slightly higher according to what the lawyers at these firms had to say. Seventeen of the 25 largest firms listed on Texas Lawyer’s “100 Largest Firms in Texas” gave out information on the bonuses for 2005.

Fulbright & Jaworski of Houston and Dallas firms Godwin Pappas Langley Ronquillo and Jackson Walker decline to provide associate bonus information.

At Dallas-based Hughes & Luce, hiring partner Craig Budner says associates received bonuses in December 2005 ranging from $2,000 to $50,000, and the amounts were comparable to bonuses paid at the end of 2004.

He says this year onwards the associate bonuses at the 145-lawyer firm will be half performance oriented and half discretionary in contrast to the 75 percent performance based and 25 percent discretionary measuring rods.

The discretionary in 2006 will include intangible performance factors, such as how much extra hard work the associate puts in and how motivated he is to push down work to the right place at the right time for the client. The change is intended to encourage career building and teamwork and to provide better services to the clients, he says.

At Locke Liddell & Sapp, associates bonuses were slightly larger in 2005 than in 2004, a result of a new compensation system, says partner David Taylor of Houston.

Taylor, the 383-lawyer firm's administrative partner, says the firm moved to a lockstep system for associate salaries in 2005, and the pay distinction between associates was made with bonuses. Prior to 2005, the firm made distinctions on the basis of bonuses and salaries both.

He says that associate compensation packages in 2005 were overall comparable to 2004.

At 115-lawyer Thompson, Coe, Cousins & Irons, based in Dallas, associates were paid bonuses ranging from $5,000 to $25,000, says Jack Cleaveland Jr., chairman of the firm's management committee. According to him these were as good or better than last year’s.

In December 2005, associates with 312-lawyer Winstead Sechrest & Minick received bonuses ranging from $1,000 to $40,000, says David Brown, a shareholder in Dallas who is the member of the firm's executive committee with responsibility for associate compensation.

Brown says the bonuses were the same, to slightly above, 2004 amounts, although the gross amount of the bonus pool was higher in 2005 than in 2004.

At Andrews Kurth of Houston, associate bonuses in 2005 were "generally consistent" with those in 2004 and 2003, but the better-performing associates probably saw a little more in the way of bonuses for 2005, says Jeffrey Spiers, a partner in Houston who is co-chairman of the 416-lawyer firm's associates' committee.

Up to the fourth-year associates bonuses ranged from around $11,000 to $20,000, while more senior associates received bonuses in the range of $30,000 to $40,000, Spiers says. And a few senior associates got more.

The bonuses, which were paid in December 2005, are based on a combination of objective factors, such as billable hours and realization, and subjective criteria.

"It's hours, but it's not a bright-line cutoff," he says.

At Houston-based Baker Botts, associate bonuses in December 2005 ranged from $5,000 to $50,000 in Texas. George Lamb, chairman of the 714-lawyer firm's associate compensation committee, says the two-tier bonus is based on merit and productivity.

In December 2005, associates at 107-lawyer Munsch Hardt Kopf & Harr of Dallas were paid bonuses up to $50,000, says Glenn Callison, the firm's chairman. The merit based bonuses were consistent with those paid in prior years.

One associate whom Callison declined to identify received more than $50,000 because of an "amazing incredible performance" in 2005.

"We were very, very pleased to be able to award that size of bonus because of the nature of the bonus. That's really how we should be rewarding the quality of those associates," Callison says. "We're obviously quite proud of him and think he did a great job."

At Houston litigation firm Beirne, Maynard & Parsons, associates received year-end bonuses ranging from $2,500 to $20,000, says Martin Beirne, managing partner of the 106-lawyer firm. He says the bonuses are merit and production-based.

"We don't base it strictly on a numbers game. We look at the quality of work people do. People who have tried cases and got some exceptional results [get bonuses] probably reflective of that," he says.

01-20-2006

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Going Hot and Cold??!!

Amidst all this heating up by firms which are hiking associate salaries, there are some Silicon Valley firms that are still contemplating their moves.

At Cooley Godward they pay their first-years $125,000, fourth-years make $165,000 and seventh-years earn $200,000.

Cooley has the end of this week set as its deadline for decision making. Their Chief Operating Officer Mark Pitchford has said that they are aware of the hustle-bustle in the market and that Wilson’s announcements have only made the market graph vivid for the remaining law firms.

On the other end Fenwick & West pays its first-year associates $125,000.

Chairman Gordon Davidson also stated that they had always paid the on going pay rates and bonuses to its associates and had every intention to continue doing so. But they are going to finalise their decision within this week or the next.

While New York based Skadden, Arps, Slate, Meagher & Flom has been paying its $140,000 to first-years nationwide, including in California, the only large LA based firm that still pays its base year associates $125,000 is Latham & Watkins.

01-20-2006

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Law Firms Blend in Texas!!

The National Law Journal has titled Adorno & Yoss the largest minority-owned law firm in the United States ranking 169th on its top law firm list.

This largest minority-owned firm in Miami is merging hands with Fitzhugh, Parker & Alvaro LLP of Boston, again one of New England’s largest minority-owned firms. This is expected to be disclosed today.

Francisco Gonzalez, director of Adorno & Yoss’s said, “This partnership will open doors for Adorno & Yoss into New England”. In the past few years Adorno & Yoss has expanded its geographical reach by joining hands with other minority firms located in Dallas and Los Angles. With a group of 23 lawyers, Fitzhugh, Parker & Alvaro, will be Adorno & Yoss's New England office which will run business under the name of Adorno, Yoss, Fitzhugh, Parker & Alvaro LLP.

This Partnership sums up the number of lawyers to 270 with 20 US and international offices and the expected annual revenue is to top $80 million. ''Our vision has been to become a powerhouse minority firm in New England," said partner Fred Alvaro Jr. of Fitzhugh, Parker & Alvaro, before referring to the partnership with Adorno & Yoss. ''This takes us to the next level."

A number of Boston-area firms have merged in the past few years, including Edwards & Angell LLP, which teamed up with Palmer & Dodge LLP. Hale and Dorr combined with Wilmer Cutler Pickering of Washington, D.C., to become WilmerHale. And Bingham Dana merged with a California firm to now be known as Bingham McCutchen. ''The theory is that client consolidation has led to law-firm consolidation," said Aric Press, editor in chief of The American Lawyer magazine.

Boston was once a known headquarters to many big corporations, but as local companies such as banks were swallowed up by acquisitions, some Boston law firms felt a need to lessen their dependency on local companies; one way to do that, they believed, was to merge with law firms from other parts of the country, said Press.

The major reason why law firms have opted for mergers is because of the big clients. Bigger the clients, bigger the services expected. Big clients need a wide range of legal services from huge law firms having offices nationwide.

So, as many traditional law firms bulked up, minority firms found they also needed more size. ''What we're trying to do is build a national firm that can compete with the big guys," says Gonzalez, of Adorno & Yoss.

01-19-2006

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Pay Hikes Are The In Thing This Season!!

Yes guys, this time around its Los Angeles based Wilson Sonsini Goodrich & Rosati that has announced it is increasing its pay scales for its associates.

Its first and second year associates are all set to enjoy a good $10,000 increment on their salaries which are now $135,000 and $145,000 respectively from Feb 1st. Third through ninth year associates get a $5000 raise. Wilson's this move compensates for fourth and seventh year associates at $170,000 and $210,000 respectively.

Wilson's finally matched its competitors O'Melveny & Myers and Paul Hastings, Janofsky & Walker, LA based law firms that announced increments last week itself. Although the real hero this season has been Gibson, Dunn & Crutcher who was the pay raise trend setter in December of 2005.

Wilson's bonuses which were $1000 to $12,000 for first years, up to $21,000 for fourth-years and $35,000 for seventh-years, are expected to shoot up too.

It is also predicting an 8 percent revenue increase making it $406 million.

Let's start making money guys!! Its work time!!



Legal Discussion

The Wondrous Law Industry

2005 has been one of the most eventful years for the legal industry. And 2006 doesn't seem any different. It has some points to offer that may leave most management partners pondering.

01-18-2006

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