According to a seasonally adjusted monthly jobs report released Friday by the U.S. Bureau of Labor Statistics, 5,800 of the 190,000 jobs lost around the country in October came from the legal sector.
When not seasonally adjusted, the legal industry actually gained 1,500 jobs, but that's likely a result of summer associates being weaned from law firm payrolls. In September, seasonally adjusted BLS data showed the legal sector losing 2,000 jobs.
In October, Cooley Godward Kronish let go of 58 staffers, followed by Foley & Lardner cutting 39 lawyers, and Wilmer Cutler Pickering Hale and Dorr shedding 57 staff members.
According to a recent analysis by the National Law Journal, a Daily Report affiliate, New York firms operating in Washington saw their overall head count decrease by 2.8 percent between April 2008 and April 2009.
For more information check out www.WarrenRecruiting.com.
Blog Archive
Monday, November 9, 2009
Tuesday, August 25, 2009
Skadden to Cut Summer Class by Half, Change Recruiting Process
Below is a great recap of a trend predicted earlier this year by Warren Recruiting. While the impact by Skadden is irrelevant (statiscally), the ensuing Domino effect will have repurcusions throughout the legal industry.
Skadden, Arps, Slate, Meagher & Flom is cutting the size of its 2010 summer associate class by half and adjusting its recruitment strategy by making all of its offers on a single day in late September, according to a copy of a letter the firm will send to prospective summers.
Skadden hired 225 summer associates this year and expects to hire a little more than 100 next year, though the precise figure will depend on offer acceptance rates, says Howard Ellin, Skadden's recruiting partner.
The firm will not rescind offers to any prospective 2010 summers; if, say, 150 summers accept, the firm will hire all 150 even though that number exceeds the figure it currently has in mind, Ellin says.
"That is unprofessional and a shock to our conscience," he says of rescinding offers.
The letter also contains good news for 2009 summers: The firm plans to offer full-time positions to 95 percent of them, although they will not start until 2011.
Those lucky enough to land spots in Skadden's 2010 summer class will receive those offers on the same day--Sept. 22, which the firm has dubbed "Skadden Offer Day." The firm will continue to give those who receive offers 45 days to evaluate them in compliance with informal guidelines set by the National Association for Law Placement (NALP).
The change comes in response to the growing number of law schools who have pushed first- and second-round interviews up to late August and early September, Ellin says.
He and Carol Sprague, Skadden's director of associate and alumni relations and attorney recruiting, are interviewing at Harvard Law School today, and the school's callback week starts on Sept. 11. Other top schools have moved to similar timetables, and more law firm recruiters have openly expressed their discomfort with a recruiting timetable that requires them to make summer offers almost a year in advance.
In the past Skadden has made offers on a rolling timetable that has extended in some cases past Thanksgiving, but the increasingly early interview schedule--plus the 45-day guideline--has created a situation where making the decision earlier is best for the firm, and, perhaps, for the students.
"The fact that schools are now front-loading in August and September has squeezed things so tightly that it made this an easy thing to do," Ellin says.
Whether the firm continues the single-day offer strategy depends in part on whether firms, schools and NALP can come together to push back the recruiting calender.
"This does not make sense anymore, and in our judgment needs to change," Ellin says. "And it will take all the various constituencies, primarily the schools, with prodding from the law firms."
Skadden also plans to sink more attorney resources into the recruiting process. Two attorneys instead of one will conduct as many on-campus interviews as possible, and prospective summers who visit the firm's office will "spend significantly more time in the firm and with each interviewer," the letter says.
Skadden will continue its tradition of hosting a "Super Saturday" of in-office interviews; it will be held on Sept. 12 this year.
The firm will also begin using a wait list for callbacks and offers, the letter says. Source: American Laywer
Skadden, Arps, Slate, Meagher & Flom is cutting the size of its 2010 summer associate class by half and adjusting its recruitment strategy by making all of its offers on a single day in late September, according to a copy of a letter the firm will send to prospective summers.
Skadden hired 225 summer associates this year and expects to hire a little more than 100 next year, though the precise figure will depend on offer acceptance rates, says Howard Ellin, Skadden's recruiting partner.
The firm will not rescind offers to any prospective 2010 summers; if, say, 150 summers accept, the firm will hire all 150 even though that number exceeds the figure it currently has in mind, Ellin says.
"That is unprofessional and a shock to our conscience," he says of rescinding offers.
The letter also contains good news for 2009 summers: The firm plans to offer full-time positions to 95 percent of them, although they will not start until 2011.
Those lucky enough to land spots in Skadden's 2010 summer class will receive those offers on the same day--Sept. 22, which the firm has dubbed "Skadden Offer Day." The firm will continue to give those who receive offers 45 days to evaluate them in compliance with informal guidelines set by the National Association for Law Placement (NALP).
The change comes in response to the growing number of law schools who have pushed first- and second-round interviews up to late August and early September, Ellin says.
He and Carol Sprague, Skadden's director of associate and alumni relations and attorney recruiting, are interviewing at Harvard Law School today, and the school's callback week starts on Sept. 11. Other top schools have moved to similar timetables, and more law firm recruiters have openly expressed their discomfort with a recruiting timetable that requires them to make summer offers almost a year in advance.
In the past Skadden has made offers on a rolling timetable that has extended in some cases past Thanksgiving, but the increasingly early interview schedule--plus the 45-day guideline--has created a situation where making the decision earlier is best for the firm, and, perhaps, for the students.
"The fact that schools are now front-loading in August and September has squeezed things so tightly that it made this an easy thing to do," Ellin says.
Whether the firm continues the single-day offer strategy depends in part on whether firms, schools and NALP can come together to push back the recruiting calender.
"This does not make sense anymore, and in our judgment needs to change," Ellin says. "And it will take all the various constituencies, primarily the schools, with prodding from the law firms."
Skadden also plans to sink more attorney resources into the recruiting process. Two attorneys instead of one will conduct as many on-campus interviews as possible, and prospective summers who visit the firm's office will "spend significantly more time in the firm and with each interviewer," the letter says.
Skadden will continue its tradition of hosting a "Super Saturday" of in-office interviews; it will be held on Sept. 12 this year.
The firm will also begin using a wait list for callbacks and offers, the letter says. Source: American Laywer
Monday, August 24, 2009
'Billable Hour' Under Attack
How will this impact your career?
'Billable Hour' Under Attack
In Recession, Companies Push Law Firms for Flat-Fee Contracts
By NATHAN KOPPEL and ASHBY JONES of the WSJ
With the recession crimping legal budgets, some big companies are fighting back against law firms' longstanding practice of billing them by the hour.
The companies are ditching the hourly structure -- which critics complain offers law firms an incentive to rack up bigger bills -- in favor of flat-fee contracts. One survey found an increase of more than 50% this year in corporate spending on alternatives to the traditional hourly-fee model.
Pfizer earlier this year reached a deal with law firms, doing away with billable hours and switching to a flat fee. The pharmaceutical company's general counsel, Amy Schulman, talks about what was behind the arrangement.
The shift could further squeeze earnings at top law firms. The past 18 months have been brutal for some big law firms as work that hinges on vibrant credit markets, such as deal making, has flat-lined.
Pfizer Inc., which spends more than $500 million a year on legal matters, says it expects to reduce its domestic law-firm spending by 15% to 20%, largely through flat-fee arrangements. It will pay 16 law firms lump sums to handle various portfolios of work, such as litigation and tax matters. "I have told firms you cannot make your historical profit margins" on Pfizer work, said the pharmaceutical giant's general counsel, Amy Schulman.
Cisco Systems Inc. has notified its stable of outside law firms that it is vital for the company to move away from the hourly billing structure. Cisco now uses fixed fees or other alternatives to the billable hour for about 80% of its legal work, said its general counsel, Mark Chandler.
American Express Co. also has stepped up its use of alternative billing arrangements, and "I haven't had one firm in 2009 tell us, no, that they flatly wouldn't entertain something that moves away from the traditional straight hourly model," said the company's chief litigation counsel, Stuart Alderoty. "The paradigm has changed."
Money spent on alternative billing arrangements has totaled $13.1 billion this year, versus $8.6 billion in the like period of 2008, according to BTI Consulting Group Inc., which surveyed 370 lawyers who work at Fortune 1000 companies. The Wellesley, Mass., firm said that the lawyers reported average cost savings of 15% from using alternative arrangements. It said 63% of the surveyed lawyers planned to increase their use of alternative billing arrangements.
Companies have long complained that legal fees are inflated by a business model in which law firms have high-priced junior lawyers who must be kept busy billing for work that could be handled more efficiently. With the recession, companies have the leverage to force changes, say some lawyers at both client companies and law firms. "Law firms are more receptive to change because they are in the business of needing legal work," said Daniel Fitz, chairman of the Association of Corporate Counsel.
Partner profits were down an average of 4% last year at the highest-grossing firms, according to American Lawyer magazine. Their hourly rates have risen to a range of $300 to $1,000. But with the slump, firms have had to dismiss associates, reduce salaries and cut back on hiring of new graduates. "Just like the tech and housing bubbles, there was a legal-profession bubble, and now we are experiencing a correction," says David Antzis, managing partner of Philadelphia-based Saul Ewing LLP, which is doing more fixed-fee work.
Pfizer could have demanded a discount from firms' hourly rates, Ms. Schulman said, but she hopes for a shift to a system that encourages firms to work more collaboratively with Pfizer and with other law firms that service Pfizer. The flat-fee program "should be something fundamentally different that will last beyond whatever people think they have to tolerate because of the economy," she said.
Some legal departments have for years experimented with flat fees for certain types of repetitive, predictable work like patent applications. Attorneys say it is doubtful flat fees could ever supplant hourly billing for the most complicated and high-stakes matters, such as an antitrust fight with the government or a particularly tricky corporate merger, where it's too hard to estimate how much effort it will consume.
American Express also has stepped up its use of alternative billing arrangements.
In addition, "a client can't expect to have the absolute best team of [trial] lawyers from a firm, and have the lawyers give up all the other work they could be doing on a regular-fee basis, to work 18 hours a day for months of time on a flat-fee engagement," said Barry Ostrager, a Simpson Thacher & Bartlett LLP partner who handles civil trials.
Orrick, Herrington & Sutcliffe LLP, a San Francisco-based firm, has tripled the revenue it generates from alternative billing arrangements in the past year, but maintained profitability through efficiencies, said David Fries, chief client-service officer. Software sends an email to lawyers when they hit certain levels of a fixed-fee budget, as a reminder to work efficiently. Financial analysts file biweekly reports analyzing how lawyers' time is being spent. "You find that someone may have spent 200 hours on something" that isn't crucial, Mr. Fries said.
Orrick has also altered the mix of lawyers it employs, focusing less exclusively on hiring graduates from elite law schools, who can command starting pay of $160,000. It is employing some college graduates who can perform routine tasks at a lower cost.
Saul Ewing in Philadelphia recently investigated a client's potential corporate acquisition under a six-week flat-fee engagement. The matter was handled about 10% more cheaply for the client than it would have been under a billable-hour deal, said Mr. Antzis, the managing partner. He said "it was still fair to the firm" because "we were incentivized to get done in 10 hours what another lawyer at another firm may have spent 12 hours doing."
At Sidley Austin LLP, Sara Gourley, a partner, said changes made by Pfizer have given her more freedom to put the best mix of lawyers on a legal matter. Pfizer used to have a rule that no lawyer with an hourly rate higher than a second-year attorney's could bill the drug company for legal research. Now that costs are fixed, Ms. Gourley says, she has been able to assign a senior associate to perform Pfizer legal research who could get the answers much more quickly than a junior lawyer might.
'Billable Hour' Under Attack
In Recession, Companies Push Law Firms for Flat-Fee Contracts
By NATHAN KOPPEL and ASHBY JONES of the WSJ
With the recession crimping legal budgets, some big companies are fighting back against law firms' longstanding practice of billing them by the hour.
The companies are ditching the hourly structure -- which critics complain offers law firms an incentive to rack up bigger bills -- in favor of flat-fee contracts. One survey found an increase of more than 50% this year in corporate spending on alternatives to the traditional hourly-fee model.
Pfizer earlier this year reached a deal with law firms, doing away with billable hours and switching to a flat fee. The pharmaceutical company's general counsel, Amy Schulman, talks about what was behind the arrangement.
The shift could further squeeze earnings at top law firms. The past 18 months have been brutal for some big law firms as work that hinges on vibrant credit markets, such as deal making, has flat-lined.
Pfizer Inc., which spends more than $500 million a year on legal matters, says it expects to reduce its domestic law-firm spending by 15% to 20%, largely through flat-fee arrangements. It will pay 16 law firms lump sums to handle various portfolios of work, such as litigation and tax matters. "I have told firms you cannot make your historical profit margins" on Pfizer work, said the pharmaceutical giant's general counsel, Amy Schulman.
Cisco Systems Inc. has notified its stable of outside law firms that it is vital for the company to move away from the hourly billing structure. Cisco now uses fixed fees or other alternatives to the billable hour for about 80% of its legal work, said its general counsel, Mark Chandler.
American Express Co. also has stepped up its use of alternative billing arrangements, and "I haven't had one firm in 2009 tell us, no, that they flatly wouldn't entertain something that moves away from the traditional straight hourly model," said the company's chief litigation counsel, Stuart Alderoty. "The paradigm has changed."
Money spent on alternative billing arrangements has totaled $13.1 billion this year, versus $8.6 billion in the like period of 2008, according to BTI Consulting Group Inc., which surveyed 370 lawyers who work at Fortune 1000 companies. The Wellesley, Mass., firm said that the lawyers reported average cost savings of 15% from using alternative arrangements. It said 63% of the surveyed lawyers planned to increase their use of alternative billing arrangements.
Companies have long complained that legal fees are inflated by a business model in which law firms have high-priced junior lawyers who must be kept busy billing for work that could be handled more efficiently. With the recession, companies have the leverage to force changes, say some lawyers at both client companies and law firms. "Law firms are more receptive to change because they are in the business of needing legal work," said Daniel Fitz, chairman of the Association of Corporate Counsel.
Partner profits were down an average of 4% last year at the highest-grossing firms, according to American Lawyer magazine. Their hourly rates have risen to a range of $300 to $1,000. But with the slump, firms have had to dismiss associates, reduce salaries and cut back on hiring of new graduates. "Just like the tech and housing bubbles, there was a legal-profession bubble, and now we are experiencing a correction," says David Antzis, managing partner of Philadelphia-based Saul Ewing LLP, which is doing more fixed-fee work.
Pfizer could have demanded a discount from firms' hourly rates, Ms. Schulman said, but she hopes for a shift to a system that encourages firms to work more collaboratively with Pfizer and with other law firms that service Pfizer. The flat-fee program "should be something fundamentally different that will last beyond whatever people think they have to tolerate because of the economy," she said.
Some legal departments have for years experimented with flat fees for certain types of repetitive, predictable work like patent applications. Attorneys say it is doubtful flat fees could ever supplant hourly billing for the most complicated and high-stakes matters, such as an antitrust fight with the government or a particularly tricky corporate merger, where it's too hard to estimate how much effort it will consume.
American Express also has stepped up its use of alternative billing arrangements.
In addition, "a client can't expect to have the absolute best team of [trial] lawyers from a firm, and have the lawyers give up all the other work they could be doing on a regular-fee basis, to work 18 hours a day for months of time on a flat-fee engagement," said Barry Ostrager, a Simpson Thacher & Bartlett LLP partner who handles civil trials.
Orrick, Herrington & Sutcliffe LLP, a San Francisco-based firm, has tripled the revenue it generates from alternative billing arrangements in the past year, but maintained profitability through efficiencies, said David Fries, chief client-service officer. Software sends an email to lawyers when they hit certain levels of a fixed-fee budget, as a reminder to work efficiently. Financial analysts file biweekly reports analyzing how lawyers' time is being spent. "You find that someone may have spent 200 hours on something" that isn't crucial, Mr. Fries said.
Orrick has also altered the mix of lawyers it employs, focusing less exclusively on hiring graduates from elite law schools, who can command starting pay of $160,000. It is employing some college graduates who can perform routine tasks at a lower cost.
Saul Ewing in Philadelphia recently investigated a client's potential corporate acquisition under a six-week flat-fee engagement. The matter was handled about 10% more cheaply for the client than it would have been under a billable-hour deal, said Mr. Antzis, the managing partner. He said "it was still fair to the firm" because "we were incentivized to get done in 10 hours what another lawyer at another firm may have spent 12 hours doing."
At Sidley Austin LLP, Sara Gourley, a partner, said changes made by Pfizer have given her more freedom to put the best mix of lawyers on a legal matter. Pfizer used to have a rule that no lawyer with an hourly rate higher than a second-year attorney's could bill the drug company for legal research. Now that costs are fixed, Ms. Gourley says, she has been able to assign a senior associate to perform Pfizer legal research who could get the answers much more quickly than a junior lawyer might.
Thursday, June 4, 2009
Update your Resume, Update yourself
It's one of the first things people think to do after losing a job: quickly get a résumé into as many hands as possible. But career experts say doing so without a strategic plan is a mistake -- wasting time and energy and resulting in few callbacks. "Most people sprinkle their résumé around like confetti hoping they will land in the right spot," says Ford Myers, president of Career Potential LLC, a Philadelphia-based career consulting firm. "It's a bad strategy." How to get the most out of your résumé:
Make a wish list. Take the time to identify the companies you want to work for before you sit down to write your résumé. "You have to know where you are headed," says Robert Saam, a senior vice president at Woodcliff Lake, N.J.-based outplacement firm Lee Hecht Harrison. "This informs how to do your résumé." For example, knowing a company you are applying to is in the midst of making acquisitions can help you structure your résumé to highlight relevant work experience, he says.
Use keywords. Particularly when answering ads through online job boards or through a corporate Web site, be sure to include critical keywords high up in your résumé. For example, for someone applying for a human-resources position, it would be wise to include key words such as "recruiting" and "hiring" near the top of a résumé for better search optimization. Other clues to the right keywords can be found in the job description -- try to use words found there in your résumé.
Tell your story. Once you're ready to send out the résumé, make sure it's doing the job of showcasing your skills and accomplishments. Many résumé writers begin by trying to construct concise bullet points. But that can mean losing some of the critical pieces of information involved in what you've accomplished. So, Mr. Saam suggests first spelling out the details of a work-related situation, any obstacle, the action you took to resolve the issue, and the results of your actions. Write out the complete story, he advises, and then whittle it down to a series of concise descriptive bullet points.
Find an insider. Develop a networking list of friends, former colleagues, and acquaintances who might know people at your target companies. Taking the time to pinpoint key contacts at the company where you are applying will help ensure your résumé gets into the right person's hands. What's more, an introduction to an insider will help avoid needing to use the résumé upfront.
Try a personal touch. For Daniel Muldowney, who has been looking for a marketing job since he was laid off in March, putting a personal touch on his résumé is one way to grab the attention of hiring managers. Mr. Muldowney encloses a handwritten note with his résumé, making clear that he has researched each company, mentioning, for example, the firm's last quarterly report or a recent speech made by the CEO. "The ultimate goal is to catch an executive's attention," says Mr. Muldowney.
Re-evaluate regularly. If you've been sending your résumé out for a month or more with no response, ask yourself a few questions. Have you developed a plan that outlines the job functions and industries that most interest you? Are there new keywords you need to incorporate or are your bullet points not playing to your strengths or the company's needs?
Great examples of resumes are available on Warren Recruiting's website.
Courtesy of WSJ
Make a wish list. Take the time to identify the companies you want to work for before you sit down to write your résumé. "You have to know where you are headed," says Robert Saam, a senior vice president at Woodcliff Lake, N.J.-based outplacement firm Lee Hecht Harrison. "This informs how to do your résumé." For example, knowing a company you are applying to is in the midst of making acquisitions can help you structure your résumé to highlight relevant work experience, he says.
Use keywords. Particularly when answering ads through online job boards or through a corporate Web site, be sure to include critical keywords high up in your résumé. For example, for someone applying for a human-resources position, it would be wise to include key words such as "recruiting" and "hiring" near the top of a résumé for better search optimization. Other clues to the right keywords can be found in the job description -- try to use words found there in your résumé.
Tell your story. Once you're ready to send out the résumé, make sure it's doing the job of showcasing your skills and accomplishments. Many résumé writers begin by trying to construct concise bullet points. But that can mean losing some of the critical pieces of information involved in what you've accomplished. So, Mr. Saam suggests first spelling out the details of a work-related situation, any obstacle, the action you took to resolve the issue, and the results of your actions. Write out the complete story, he advises, and then whittle it down to a series of concise descriptive bullet points.
Find an insider. Develop a networking list of friends, former colleagues, and acquaintances who might know people at your target companies. Taking the time to pinpoint key contacts at the company where you are applying will help ensure your résumé gets into the right person's hands. What's more, an introduction to an insider will help avoid needing to use the résumé upfront.
Try a personal touch. For Daniel Muldowney, who has been looking for a marketing job since he was laid off in March, putting a personal touch on his résumé is one way to grab the attention of hiring managers. Mr. Muldowney encloses a handwritten note with his résumé, making clear that he has researched each company, mentioning, for example, the firm's last quarterly report or a recent speech made by the CEO. "The ultimate goal is to catch an executive's attention," says Mr. Muldowney.
Re-evaluate regularly. If you've been sending your résumé out for a month or more with no response, ask yourself a few questions. Have you developed a plan that outlines the job functions and industries that most interest you? Are there new keywords you need to incorporate or are your bullet points not playing to your strengths or the company's needs?
Great examples of resumes are available on Warren Recruiting's website.
Courtesy of WSJ
Monday, June 1, 2009
Summer Associates Feel the Heat
The theme song of the 2008 Big Law Summer Program (and all those glittering summers that preceded it) as “Celebration.” As in, “Celebrate good times … Come on!”
For decades, that party went on. And on. And on.
But in case you hadn't noticed that the tune in your head's been sounding a little different recently, let me be the first to tell you: That “Celebration” record has been jerked off the turntable/deleted from the iPod/dumped from the jukebox playlist and replaced by the Summer of 2009 anthem: “Boulevard of Broken Dreams.”
Working as a Cog at Big Law after your colleagues were canned and while profits plummet is sad enough, but working through the pain and awkwardness that is Big Law Summer Camp 2009 is sure to become an instant war story: “… and then the summer associate started crying in my arms … but he wasn't even drunk. He just realized he had no prospects of being hired.”
This anthem-change from Kool and the Gang to Green Day reflects a seismic shift in Big Law Summer Camp from an environment of excess, lavishness and frivolity to one of anxiety, penny-pinching and angst. Offices formerly occupied by recently laid-off, eager, young associates trying to pay off law school debt and make it in the Big Time have been swiftly bleached, vacuumed, dusted and re-painted to remove the taint of shattered dreams—just in time for summer associates to roll in and start testing out their new Big Law e-mail addresses.
Those of us who are anxiously hoping not to be next on the casualty list are forced to act as if everything is fine when we do not know if we will still have a job in 2010—much less whether there will be room on the payroll for these eager law students. So much for “Two! Four! Six! Eight! Summer Camp is really great!”
The few kids who participated in 2008 Big Law Summer of Fun and are now back again for 2009 Summer of Seriousness will notice a few obvious changes:
2008 retreat
Three-day beach retreat complete with spa day, golf tourney, all-you-can-eat shrimp and crab buffet, poolside pina coladas, parasailing and logo-embroidered Big Law golf shirt!
2009 retreat
Friday afternoon “retreat” to the firm's largest top floor conference room where the furniture has been removed to make way for the “Mexican Madness” party complete with buckets of Tecate in a can, tacos, chips and a piñata full of foil-wrapped chocolates. Take out your frustration on the economy by whacking the multicolored papier-mâché donkey until the mini-Snickers bars rain upon you. Paartaay!
2008 lunch
Big Law associates fighting to take summer associates to fully expensed two-hour, four-course lunches at the latest, hippest eateries. “Molten chocolate cake anyone?”
2009 lunch
Big Law associates working feverishly through lunch while refusing to give summers any projects because the associates need the hours more. “Hey Summer, sorry I had to cancel lunch, but I have to finish up the document review I was going to give you. There is an excellent sub shop in the lobby—here's five bucks—knock yourself out!”
2008 Tuesday afternoon
Big Law halls full of laughter as summers head out early for an afternoon golf outing. “Jimmy, you are so crazy. I can't believe you started drinking at noon!”
2009 Tuesday afternoon
Big Law halls full of whispers and keyboard pecking as summers form alliances and strategize about ways to get one of the two spots for which the 50 of them are vying: “If we get the Duke Dork to believe that the firm is looking for real estate lawyers because they accidentally fired them all, he won't try to nab that one spot in litigation. ... If we get Harvard Hottie really drunk one night, she might miss a deadline on the corporate project and get cut!”
Most common phrases uttered during the summer program of 2008:
• “toe up” (slang for “tore up” on too much alcohol);
• “keg stand” (upside down drinking of beer from iced keg through plastic pump);
• “skip day” (firm-sanctioned field trip to the local microbrewery); and
• “mild distraction” (the two legal projects the summers were required to complete).
Most common words/phrases you're likely to hear during the summer program of 2009:
• “layoffs” (as in, were there enough to make room for us?);
• “chapped lips” (a condition resulting from kissing up to too many partners and associates in an effort to secure a favorable position among the many nameless masses in the summer program for the few potential job offers);
• “whiplash” (the feeling a repeat summer associate experiences after the transition between Summer of 2008 and Summer of 2009); and
• “elephant in the room” (the awkwardness that results from Big Law attorneys avoiding any contact with the summers for fear of being asked about the financial health of the firm, the job prospects of the summer class or why they love their Big Law jobs).
Seriously, just one year ago the entire purpose of the Summer Program was to make all summer campers fall in love with the firm by spoiling them rotten. In order to make sure their recruiting stats stayed strong, Big Law gave offers to 99 percent of the summer associates who came through the “program.” To not get an offer after 10 weeks of gourmet lunches, concerts and a few legal writing projects meant that either you got so drunk on the cash and cordials that you hit on the managing partner's wife at the “Endless Summer” black tie gala or you dove into an unsanitary waterway from the balcony of a cocktail party.
This summer, my guess is 99 percent of participants will not get an offer, or at least, not an offer that means much more than the paper upon which it is written. The tables have turned, and I fear I will have to endure several weeks of witnessing the depressing scene of watching ambitious, talented young law students compete against one another for jobs that may or may not exist—including my own.
“Celebrate good times … Come on!”
Source - Daily Review
For decades, that party went on. And on. And on.
But in case you hadn't noticed that the tune in your head's been sounding a little different recently, let me be the first to tell you: That “Celebration” record has been jerked off the turntable/deleted from the iPod/dumped from the jukebox playlist and replaced by the Summer of 2009 anthem: “Boulevard of Broken Dreams.”
Working as a Cog at Big Law after your colleagues were canned and while profits plummet is sad enough, but working through the pain and awkwardness that is Big Law Summer Camp 2009 is sure to become an instant war story: “… and then the summer associate started crying in my arms … but he wasn't even drunk. He just realized he had no prospects of being hired.”
This anthem-change from Kool and the Gang to Green Day reflects a seismic shift in Big Law Summer Camp from an environment of excess, lavishness and frivolity to one of anxiety, penny-pinching and angst. Offices formerly occupied by recently laid-off, eager, young associates trying to pay off law school debt and make it in the Big Time have been swiftly bleached, vacuumed, dusted and re-painted to remove the taint of shattered dreams—just in time for summer associates to roll in and start testing out their new Big Law e-mail addresses.
Those of us who are anxiously hoping not to be next on the casualty list are forced to act as if everything is fine when we do not know if we will still have a job in 2010—much less whether there will be room on the payroll for these eager law students. So much for “Two! Four! Six! Eight! Summer Camp is really great!”
The few kids who participated in 2008 Big Law Summer of Fun and are now back again for 2009 Summer of Seriousness will notice a few obvious changes:
2008 retreat
Three-day beach retreat complete with spa day, golf tourney, all-you-can-eat shrimp and crab buffet, poolside pina coladas, parasailing and logo-embroidered Big Law golf shirt!
2009 retreat
Friday afternoon “retreat” to the firm's largest top floor conference room where the furniture has been removed to make way for the “Mexican Madness” party complete with buckets of Tecate in a can, tacos, chips and a piñata full of foil-wrapped chocolates. Take out your frustration on the economy by whacking the multicolored papier-mâché donkey until the mini-Snickers bars rain upon you. Paartaay!
2008 lunch
Big Law associates fighting to take summer associates to fully expensed two-hour, four-course lunches at the latest, hippest eateries. “Molten chocolate cake anyone?”
2009 lunch
Big Law associates working feverishly through lunch while refusing to give summers any projects because the associates need the hours more. “Hey Summer, sorry I had to cancel lunch, but I have to finish up the document review I was going to give you. There is an excellent sub shop in the lobby—here's five bucks—knock yourself out!”
2008 Tuesday afternoon
Big Law halls full of laughter as summers head out early for an afternoon golf outing. “Jimmy, you are so crazy. I can't believe you started drinking at noon!”
2009 Tuesday afternoon
Big Law halls full of whispers and keyboard pecking as summers form alliances and strategize about ways to get one of the two spots for which the 50 of them are vying: “If we get the Duke Dork to believe that the firm is looking for real estate lawyers because they accidentally fired them all, he won't try to nab that one spot in litigation. ... If we get Harvard Hottie really drunk one night, she might miss a deadline on the corporate project and get cut!”
Most common phrases uttered during the summer program of 2008:
• “toe up” (slang for “tore up” on too much alcohol);
• “keg stand” (upside down drinking of beer from iced keg through plastic pump);
• “skip day” (firm-sanctioned field trip to the local microbrewery); and
• “mild distraction” (the two legal projects the summers were required to complete).
Most common words/phrases you're likely to hear during the summer program of 2009:
• “layoffs” (as in, were there enough to make room for us?);
• “chapped lips” (a condition resulting from kissing up to too many partners and associates in an effort to secure a favorable position among the many nameless masses in the summer program for the few potential job offers);
• “whiplash” (the feeling a repeat summer associate experiences after the transition between Summer of 2008 and Summer of 2009); and
• “elephant in the room” (the awkwardness that results from Big Law attorneys avoiding any contact with the summers for fear of being asked about the financial health of the firm, the job prospects of the summer class or why they love their Big Law jobs).
Seriously, just one year ago the entire purpose of the Summer Program was to make all summer campers fall in love with the firm by spoiling them rotten. In order to make sure their recruiting stats stayed strong, Big Law gave offers to 99 percent of the summer associates who came through the “program.” To not get an offer after 10 weeks of gourmet lunches, concerts and a few legal writing projects meant that either you got so drunk on the cash and cordials that you hit on the managing partner's wife at the “Endless Summer” black tie gala or you dove into an unsanitary waterway from the balcony of a cocktail party.
This summer, my guess is 99 percent of participants will not get an offer, or at least, not an offer that means much more than the paper upon which it is written. The tables have turned, and I fear I will have to endure several weeks of witnessing the depressing scene of watching ambitious, talented young law students compete against one another for jobs that may or may not exist—including my own.
“Celebrate good times … Come on!”
Source - Daily Review
Thursday, May 7, 2009
Firm Salaries to Fall...Quickly
According to the National Law Journal, In D.C., big firms slash associate salaries
Atlanta-based McKenna cut first-year pay in Washington to $140,000 this year and others were quick to follow suit
Washington law firms are cutting costs anywhere they can, and associate pay is no longer an exception.
Seven Washington offices have slashed salaries. Others—including D.C. stalwarts like Crowell Moring, Hogan Hartson, and Wiley Rein—are cutting pay for associates who don't hit their billable hour goals.
“Law firms are starting to realize what was obvious to everyone else. They're saying to each other, 'We've been nuts all these years to be paying $160,000 as a starting salary,'” said Jerry Kowalski, a New York-based legal consultant. Kowalski said he expects more firms to experiment with tiered or merit-based pay structures as they look for something other than lockstep.
They have plenty of incentive. Firms don't make money off first-year associates once recruiting costs, summer programs, summer salaries and training are factored in, said Jim Leipold, executive director of the National Association of Legal Professionals. Leipold estimates that those costs could reach $300,000 per associate before they start making money for the firm. And clients, who are facing layoffs and salary cuts of their own, don't like hearing about high associate salaries, and they really hate paying for them.
“It was a regular comment from in-house counsel. They would request that first-years not be put on their matters,” said Jeffrey Haidet, chairman of Atlanta-based McKenna Long Aldridge, which cut salaries for incoming first-year associates to $140,000 this year in Washington. In Atlanta, the firm cut first-year pay from $145,000 to $125,000.
Haidet said McKenna was inspired by the now-defunct Philadelphia firm WolfBlock, which cut associate salaries by 10 percent last February.
Other firms quickly followed suit. Thompson Hine announced a $17,500 base salary reduction for all nonpartner lawyers, including about 17 in Washington, with a caveat that allows lawyers to earn back some or all of that amount if they bill 1,750 hours by year's end. Baker McKenzie, which has about 95 lawyers in Washington, confirmed that it cut salaries, but the firm would not say by how much or how many people were affected. Womble Carlyle Sandridge Rice cut 10 percent off salaries for all but the firm's top-billing lawyers. Womble Carlyle has about 70 lawyers in its Washington, Tysons Corner, Va., and Baltimore offices.
“I fully expect this to be more widespread,” said Keith Vaughan, chairman of Womble Carlyle, adding that when the firm decided to cut, it did so on the expectation that others would, too.
Eight Washington managing partners declined to be quoted by name on the associate pay issue, saying it was too sensitive. All, however, said they would not rule out salary cuts. “Any firm not thinking about associate salaries should be,” said one.
So far none of the biggest Washington firms have made across-the-board salary cuts. Hogan Hartson and Wiley Rein, which have tiered associate salary structures, have been moving lower-billing associates from top salary tiers to the bottom, something they haven't done aggressively in past years. Both firms say they allow associates to work their way back into the top tier if their billable hours improve.
“If we pay somebody $160,000 and they don't make their hours, we're not going to go and ask for it back. It's always better to have people making their hours. But if they aren't, this does save money,” said Wiley Rein managing partner Richard Wiley. Wiley wouldn't say how many associates were affected. But with salaries on the firm's lower tier set at $125,000, even moving a few of the firm's 17 first-year associates from the $160,000 tier to the $125,000 one could save the firm quite a bit of money.
Crowell Moring, which doesn't have a tiered structure, has nonetheless been approaching individual lawyers whose hours are off and adjusting their salaries on a case-by-case basis. Ellen Dwyer, managing partner of Crowell Moring, said that fewer than 20 lawyers have been reclassified so far. “We just don't want to get to a place where some of our peers are that have had layoffs or taken other draconian steps,” Dwyer said. Crowell has so far been able to avoid layoffs. The lawyers Crowell approached had all been at the firm at least a year.
Though they're pushing back on associate pay, firms say being one of the first to cut salaries could hurt when it comes to recruiting talent—even now. “If you're a new Harvard grad looking at five firms, are you going to talk to the four firms paying $160,000 or the one firm paying $145,000?” said Eric Bernthal, managing partner of Latham Watkins' Washington office. Latham has not cut associate salaries.
All the firms are worried about staying competitive when it comes to recruiting. Dan Binstock, managing director of recruiting firm BCG Attorney Search, said targeting salaries among lawyers already at a firm can be a way for firms to push costs down while avoiding paying less than other firms for first-years. “Salaries are a shorthand among law students,” Binstock said. “Keeping first-year salaries at $160,000 is a way to preserve a law firm's brand.”
Of course, prospective associates are hardly in a position to fuss. “Look, I know that I am not worth $160,000. But if firms are willing to pay it, I'm not going to turn it down,” said one first-year associate at a Washington-based firm who requested anonymity when discussing his salary. “If they came to me and said you're either going to take a pay cut or you're out of a job, I'd take the pay cut.”
If your concerned how this might impact your situation? Have questions about your career? Call Warren Recruiting at 713.524.4888.
Atlanta-based McKenna cut first-year pay in Washington to $140,000 this year and others were quick to follow suit
Washington law firms are cutting costs anywhere they can, and associate pay is no longer an exception.
Seven Washington offices have slashed salaries. Others—including D.C. stalwarts like Crowell Moring, Hogan Hartson, and Wiley Rein—are cutting pay for associates who don't hit their billable hour goals.
“Law firms are starting to realize what was obvious to everyone else. They're saying to each other, 'We've been nuts all these years to be paying $160,000 as a starting salary,'” said Jerry Kowalski, a New York-based legal consultant. Kowalski said he expects more firms to experiment with tiered or merit-based pay structures as they look for something other than lockstep.
They have plenty of incentive. Firms don't make money off first-year associates once recruiting costs, summer programs, summer salaries and training are factored in, said Jim Leipold, executive director of the National Association of Legal Professionals. Leipold estimates that those costs could reach $300,000 per associate before they start making money for the firm. And clients, who are facing layoffs and salary cuts of their own, don't like hearing about high associate salaries, and they really hate paying for them.
“It was a regular comment from in-house counsel. They would request that first-years not be put on their matters,” said Jeffrey Haidet, chairman of Atlanta-based McKenna Long Aldridge, which cut salaries for incoming first-year associates to $140,000 this year in Washington. In Atlanta, the firm cut first-year pay from $145,000 to $125,000.
Haidet said McKenna was inspired by the now-defunct Philadelphia firm WolfBlock, which cut associate salaries by 10 percent last February.
Other firms quickly followed suit. Thompson Hine announced a $17,500 base salary reduction for all nonpartner lawyers, including about 17 in Washington, with a caveat that allows lawyers to earn back some or all of that amount if they bill 1,750 hours by year's end. Baker McKenzie, which has about 95 lawyers in Washington, confirmed that it cut salaries, but the firm would not say by how much or how many people were affected. Womble Carlyle Sandridge Rice cut 10 percent off salaries for all but the firm's top-billing lawyers. Womble Carlyle has about 70 lawyers in its Washington, Tysons Corner, Va., and Baltimore offices.
“I fully expect this to be more widespread,” said Keith Vaughan, chairman of Womble Carlyle, adding that when the firm decided to cut, it did so on the expectation that others would, too.
Eight Washington managing partners declined to be quoted by name on the associate pay issue, saying it was too sensitive. All, however, said they would not rule out salary cuts. “Any firm not thinking about associate salaries should be,” said one.
So far none of the biggest Washington firms have made across-the-board salary cuts. Hogan Hartson and Wiley Rein, which have tiered associate salary structures, have been moving lower-billing associates from top salary tiers to the bottom, something they haven't done aggressively in past years. Both firms say they allow associates to work their way back into the top tier if their billable hours improve.
“If we pay somebody $160,000 and they don't make their hours, we're not going to go and ask for it back. It's always better to have people making their hours. But if they aren't, this does save money,” said Wiley Rein managing partner Richard Wiley. Wiley wouldn't say how many associates were affected. But with salaries on the firm's lower tier set at $125,000, even moving a few of the firm's 17 first-year associates from the $160,000 tier to the $125,000 one could save the firm quite a bit of money.
Crowell Moring, which doesn't have a tiered structure, has nonetheless been approaching individual lawyers whose hours are off and adjusting their salaries on a case-by-case basis. Ellen Dwyer, managing partner of Crowell Moring, said that fewer than 20 lawyers have been reclassified so far. “We just don't want to get to a place where some of our peers are that have had layoffs or taken other draconian steps,” Dwyer said. Crowell has so far been able to avoid layoffs. The lawyers Crowell approached had all been at the firm at least a year.
Though they're pushing back on associate pay, firms say being one of the first to cut salaries could hurt when it comes to recruiting talent—even now. “If you're a new Harvard grad looking at five firms, are you going to talk to the four firms paying $160,000 or the one firm paying $145,000?” said Eric Bernthal, managing partner of Latham Watkins' Washington office. Latham has not cut associate salaries.
All the firms are worried about staying competitive when it comes to recruiting. Dan Binstock, managing director of recruiting firm BCG Attorney Search, said targeting salaries among lawyers already at a firm can be a way for firms to push costs down while avoiding paying less than other firms for first-years. “Salaries are a shorthand among law students,” Binstock said. “Keeping first-year salaries at $160,000 is a way to preserve a law firm's brand.”
Of course, prospective associates are hardly in a position to fuss. “Look, I know that I am not worth $160,000. But if firms are willing to pay it, I'm not going to turn it down,” said one first-year associate at a Washington-based firm who requested anonymity when discussing his salary. “If they came to me and said you're either going to take a pay cut or you're out of a job, I'd take the pay cut.”
If your concerned how this might impact your situation? Have questions about your career? Call Warren Recruiting at 713.524.4888.
Tuesday, April 21, 2009
A new model for a new economy
Over the past decade we’ve witnessed unprecedented growth in the legal economy prompted by a number of change factors including technology, a strong global economy and the infusion of top managers. The technology responsible for this growth includes the Internet, VOIP, outsourced cheaper partners, better research tools and the ubiquitous blackberry.
The economy fueled by cheap debt, a robust capital market and low taxes led to an increased need (Mr . Supply meets Ms. Demand) of top legal talent. The technology leaps which was referenced earlier was also responsible for the surge in IP Attorneys which then fed the Corporate Attorneys and is now feeding the restructuring attorneys.
Along the way the law firms hired outsiders to help them lead their companies. These outsiders joined the firms with of a wealth of management speak and were responsible for significant maturity in financial, marketing, human capital and supply chain issues. Amidst the efficiencies achieved perhaps no greater was that of the economy of scale which led to the growth of the mega-firms. These mega-firms with hundreds of lawyers, regional and international offices, and a wide spectrum of service offerings.
The megafirms also hired Madison Avenue ad agencies who helped craft unique messages about the brand (aka the firm). These sophisticated firms also changed their names from an alphabet soup of partners names to a single strong name like Coke or Amazon.
With the current recession in full swing, these change factors are being put to the test. Can the reduced fees sustain the cost of operating the mega firms? Will the regional firms become dominant again? If there were economies of scale a few years ago, one would logically assume it’s more important than ever. This of course means the firms are going to have to find new ways to cut costs and further leverage these change factors.
Warren Recruiting is looking forward to seeing the impact of the Change Factors and helping the legal landscape evolve.
The economy fueled by cheap debt, a robust capital market and low taxes led to an increased need (Mr . Supply meets Ms. Demand) of top legal talent. The technology leaps which was referenced earlier was also responsible for the surge in IP Attorneys which then fed the Corporate Attorneys and is now feeding the restructuring attorneys.
Along the way the law firms hired outsiders to help them lead their companies. These outsiders joined the firms with of a wealth of management speak and were responsible for significant maturity in financial, marketing, human capital and supply chain issues. Amidst the efficiencies achieved perhaps no greater was that of the economy of scale which led to the growth of the mega-firms. These mega-firms with hundreds of lawyers, regional and international offices, and a wide spectrum of service offerings.
The megafirms also hired Madison Avenue ad agencies who helped craft unique messages about the brand (aka the firm). These sophisticated firms also changed their names from an alphabet soup of partners names to a single strong name like Coke or Amazon.
With the current recession in full swing, these change factors are being put to the test. Can the reduced fees sustain the cost of operating the mega firms? Will the regional firms become dominant again? If there were economies of scale a few years ago, one would logically assume it’s more important than ever. This of course means the firms are going to have to find new ways to cut costs and further leverage these change factors.
Warren Recruiting is looking forward to seeing the impact of the Change Factors and helping the legal landscape evolve.
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