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Re: NYC to 200k

Post by Anonymous User » Tue Jun 19, 2018 4:32 pm

Anonymous User wrote:
cfcm wrote:You can’t eat prestige.
Lower-paying jobs with supposed access to "power" or "prestige" is the name of the game in DC in general.
True, but the point doesn't really apply here. A job at DOJ is not interchangeable with a job at hogan lovells--there are many factors including power, type of work, pay, etc. But a job at hogan lovells is 100% interchangeable with a job at Kirkland's DC office.

It's not just that you can't eat prestige, it's watch where that "prestige" goes when Covington and Hogan start paying less than Vinson & Elkins in the same damn city. The change won't happen overnight, but within a couple years the firm market in this town would be unrecognizable.

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Re: NYC to 200k

Post by Anonymous User » Tue Jun 19, 2018 4:33 pm

nahumya wrote:Yeah, they'll be eating Chipotle, hold the guac.
Yeah, but they totally saw Chuck Schumer's Scheduling Director walk by while there. #worthit #dclife #blessed

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Re: NYC to 200k

Post by Anonymous User » Tue Jun 19, 2018 4:36 pm

Anonymous User wrote:You would still see 2Ls bidding DC at OCI try to get A&P or HL or JD over Skadden or K&E because they want to be at a firm HQ and not a "satellite office." Even when they recognize that 3 or maybe 4 years is their goal in biglaw. Dat prestige tho. Source: Classmates who graduated within the last few years from a T-13 and had this exact rationale for picking a firm.
That's real dumb tho. While some smaller offices of national firms are true satellites, 200 lawyer offices like KE/Gibson do their own work and are good places to be imho. Or at least I hope so.

(associate who narrowed down to those two offices)

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Re: NYC to 200k

Post by Anonymous User » Tue Jun 19, 2018 4:36 pm

Anonymous User wrote:You would still see 2Ls bidding DC at OCI try to get A&P or HL or JD over Skadden or K&E because they want to be at a firm HQ and not a "satellite office." Even when they recognize that 3 or maybe 4 years is their goal in biglaw. Dat prestige tho. Source: Classmates who graduated within the last few years from a T-13 and had this exact rationale for picking a firm.
There are a lot of really stupid 2Ls out there, for sure. But fortunately most are (like I was) just stupid enough to not know the difference between any law firms when bidding. Only criteria were 1) in the city I want to go to? 2) practice group I want? After that there's zero measurable way to distinguish firms.

Or at least, there WAS zero measurable way until we got market separation...

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Re: NYC to 200k

Post by Anonymous User » Tue Jun 19, 2018 4:38 pm

Picking prestige isn't entire a dumb idea if you're looking to move into government work/in-house in DC. HL is really well regarded in DC for corp and I would assume that would make it easier to land positions in DC when exiting

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Re: NYC to 200k

Post by LaLiLuLeLo » Tue Jun 19, 2018 4:38 pm

nahumya wrote:Yeah, they'll be eating Chipotle, hold the guac.
My firm matched today and I got chipotle with guac but they forgot to charge me for it. I’m sick of winning.

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Re: NYC to 200k

Post by Anonymous User » Tue Jun 19, 2018 4:40 pm

Anonymous User wrote:Picking prestige isn't entire a dumb idea if you're looking to move into government work/in-house in DC. HL is really well regarded in DC for corp and I would assume that would make it easier to land positions in DC when exiting
Yeah, this is exactly what the DC firms will tell their associates when they don't match.

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Re: NYC to 200k

Post by Anonymous User » Tue Jun 19, 2018 4:42 pm

Anonymous User wrote:
Anonymous User wrote:Picking prestige isn't entire a dumb idea if you're looking to move into government work/in-house in DC. HL is really well regarded in DC for corp and I would assume that would make it easier to land positions in DC when exiting
Yeah, this is exactly what the DC firms will tell their associates when they don't match.
lol "you'll have an easier job landing when you exit!" *flood of Hogan and Covington associates head for the exits*

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Re: NYC to 200k

Post by Anonymous User » Tue Jun 19, 2018 4:44 pm

Anonymous User wrote:
Anonymous User wrote:It’s concerning that Winston immediately matched Milbank but hasn’t re-matched, even after Kirkland and Sidley did so.

Then again, we may not feel pressure unless/until Mayer/Jennner/etc. also match.
I'm at Katten and quite a few senior people have said we are waiting to see what Mayer/Jenner do and also whether Winston rematches.
If we’re all waiting on each other, we may be waiting a long time.

Our Chairman keeps saying he’s committed to market compensation. I guess we’ll see.

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Re: NYC to 200k

Post by Anonymous User » Tue Jun 19, 2018 4:47 pm

Anonymous User wrote:I think we're going to see some market separation on this one. No way Jenner raises. Maybe not Mayer Brown either, given their leverage and the fact that they are already a third fiddle to Kirkland and Sidley in their home market anyway. O'Melveny is over $2ppp but has high leverage. Fenwick's leverage is almost as high and profits are a lot lower. Covingttton is Covingttton. While it's confusing that firms like Gibson and Latham haven't announced yet, the delay on this may indicate that a lot of firms have finally at least for now hit their ceiling.
Can you explain "leverage" and how that factors into this?

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Re: NYC to 200k

Post by Anonymous User » Tue Jun 19, 2018 4:48 pm

It's amazing that CovingTTTon holds itself out as THE BRAIN TRUST FIRM but rakes in less PEP than firms headquartered in fucking Texas.

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Re: NYC to 200k

Post by Anonymous User » Tue Jun 19, 2018 4:53 pm

Anonymous User wrote:
Anonymous User wrote:Is DC just staying at 180?
There is no longer such a thing as a "DC market," or any other city market. There hasn't been a a generation. Hundreds, if not thousands, of DC associates at Simpson, Sidley, Morgan Lewis, etc are on the new scale and will soon get the bonuses they earned.

The firms that have raised compete for summers and laterals with the firms that haven't, even firms in their home market. The associates already at "DC firms" or "Boston firms" or what have you see their law school classmates at what they had thought were peer firms suddenly and inexplicably earning more than them, and they see no reason for their firms not to match.
Technically this is true, but there certainly is such a thing as the "DC market" and "DC firms" in the mind of top law students. Wilmer, Williams & Connolly, Covington, Gibson, A&P, Hogan Lovells, ect.--that's the DC clique, and they constitute a "market" for recruiting purposes even if big New York and California firms have DC satellite offices. These are the firms with the biggest summer classes, the home offices, the most DC-focused practices, the best government exit options, and yes, the most "prestige." Its where the kids at FIP are actually trying to go while throw backup bids at Paul Weiss and Cravath. Some satellites matter more: Skadden, Kirkland, and Cleary for example, create market pressure. Others don't; what the handful of Davis Polk associates in the DC office are making is not important. Comp has never taken center stage in DC: Williams & Connolly is still the top prize despite substantial below-market comp, and Boies DC associates have been making more than other DC firms for years, but its rarely a top choice over Covington or Wilmer.

I strongly suspect all the DC firms will match by July 1. But its telling that none of that core set have moved on the new scale. Never forget that CovingTTTTon displayed this very logic in 2016 when it tried to hold DC salaries steady while offering its New York office a raise--and it only relented after its true "peer" shops went to 180.
Last edited by Anonymous User on Tue Jun 19, 2018 4:54 pm, edited 1 time in total.

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Re: NYC to 200k

Post by Anonymous User » Tue Jun 19, 2018 4:54 pm

Greenberg Traurig and Reed Smith should be but in bold, underlined, on the shame list as capital shamers

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Re: NYC to 200k

Post by NakedPowerOrgan » Tue Jun 19, 2018 4:54 pm

Anonymous User wrote:
Anonymous User wrote:I think we're going to see some market separation on this one. No way Jenner raises. Maybe not Mayer Brown either, given their leverage and the fact that they are already a third fiddle to Kirkland and Sidley in their home market anyway. O'Melveny is over $2ppp but has high leverage. Fenwick's leverage is almost as high and profits are a lot lower. Covingttton is Covingttton. While it's confusing that firms like Gibson and Latham haven't announced yet, the delay on this may indicate that a lot of firms have finally at least for now hit their ceiling.
Can you explain "leverage" and how that factors into this?
Not the OP, but as an example, suppose Firm A and Firm B both have PPP of $1.5MM, however Firm A has 4 associates for every equity partner and Firm B has 1.5 associates for every equity partner. Assuming that the average cost of raises and bonuses this year are $35K/associate, and leaving all else constant, partners in Firm A will see their PPP decline by $140,000 to approx. $1.36MM but partners in Firm B will see their PP decline by only $52,500 to approx. $1.45MM.

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Re: NYC to 200k

Post by Anonymous User » Tue Jun 19, 2018 4:56 pm

Anonymous User wrote:
Anonymous User wrote:I think we're going to see some market separation on this one. No way Jenner raises. Maybe not Mayer Brown either, given their leverage and the fact that they are already a third fiddle to Kirkland and Sidley in their home market anyway. O'Melveny is over $2ppp but has high leverage. Fenwick's leverage is almost as high and profits are a lot lower. Covingttton is Covingttton. While it's confusing that firms like Gibson and Latham haven't announced yet, the delay on this may indicate that a lot of firms have finally at least for now hit their ceiling.
Can you explain "leverage" and how that factors into this?
the more associates per partner, the more each partner has to pay for a raise. e.g. if its 1:1, each partner pays the raise for 1 associate; if its 1:3, each partner pays for 3 associates.

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Re: NYC to 200k

Post by Anonymous User » Tue Jun 19, 2018 4:57 pm

Only explanation: Latham waits until everyone matches Cravath then goes to 200K and the world burns.

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Re: NYC to 200k

Post by Anonymous User » Tue Jun 19, 2018 4:58 pm

Anonymous User wrote:
Anonymous User wrote:I think we're going to see some market separation on this one. No way Jenner raises. Maybe not Mayer Brown either, given their leverage and the fact that they are already a third fiddle to Kirkland and Sidley in their home market anyway. O'Melveny is over $2ppp but has high leverage. Fenwick's leverage is almost as high and profits are a lot lower. Covingttton is Covingttton. While it's confusing that firms like Gibson and Latham haven't announced yet, the delay on this may indicate that a lot of firms have finally at least for now hit their ceiling.
Can you explain "leverage" and how that factors into this?

If a firm has 6 associates for every partner, every partner will have to trim probably around $180k from PPP (if rates don’t go up) (assuming the average bonus is 15 and the average raise is 15).

If a firm has 1 associate for every partner, each partner on average will have to fork over like $30k.

This is being simplistic but essentially why leverage matters

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Re: NYC to 200k

Post by Anonymous User » Tue Jun 19, 2018 4:58 pm

i think skadden has more attorneys in DC than Williams & Connolly

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Re: NYC to 200k

Post by Wacked Wombat » Tue Jun 19, 2018 5:00 pm

Anonymous User wrote:
Anonymous User wrote:I think we're going to see some market separation on this one. No way Jenner raises. Maybe not Mayer Brown either, given their leverage and the fact that they are already a third fiddle to Kirkland and Sidley in their home market anyway. O'Melveny is over $2ppp but has high leverage. Fenwick's leverage is almost as high and profits are a lot lower. Covingttton is Covingttton. While it's confusing that firms like Gibson and Latham haven't announced yet, the delay on this may indicate that a lot of firms have finally at least for now hit their ceiling.
Can you explain "leverage" and how that factors into this?
If you are highly levered (i.e. more associates per equity partner) the cost to each individual equity partner is higher than it is for lower levered firms.

E.g. Assume that the average cost per associate for this round is $35k. If a firm has a 1:1 Associate:Partner Ratio, then each partner has $35k (on average) taken out of their profits. If a firm has a 3:1 Associate:Partner Ratio, then each partner has a $105k (on average) taken out of their profits.

Makes it more expensive per partner for these raises.

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Re: NYC to 200k

Post by Anonymous User » Tue Jun 19, 2018 5:00 pm

Anonymous User wrote:
Anonymous User wrote:I think we're going to see some market separation on this one. No way Jenner raises. Maybe not Mayer Brown either, given their leverage and the fact that they are already a third fiddle to Kirkland and Sidley in their home market anyway. O'Melveny is over $2ppp but has high leverage. Fenwick's leverage is almost as high and profits are a lot lower. Covingttton is Covingttton. While it's confusing that firms like Gibson and Latham haven't announced yet, the delay on this may indicate that a lot of firms have finally at least for now hit their ceiling.
Can you explain "leverage" and how that factors into this?
This has to be a troll. Whatever. Leverage is the ratio between partners and associates. At a high level, leverage shows you how many people on salary are supporting each partner that gets to share in the profits. If firm A has a revenue per lawyer of $1 million with a leverage ratio of 3 associates per partner and firm B has a revenue per lawyer of $1 million with a leverage ratio of 2 associates per partner, a partner at firm A is going to make a lot more money than a lawyer at firm B because they get to share profits from 3 associates rather than from just 2.

This comes into play here because, when you have to raise salaries and pay bonuses, partner's pockets get hit much harder for firms with high leverage ratios. If it costs $30k per associate to raise salaries and give summer bonuses (ballpark), then each partner at firm A loses $90k in profits because there's 3 associates per partner that will be getting a raise. A partner at firm B only loses $60k because there's only 2 associates per partner.

If that's not clear enough, think of it this way. Partners want as much money as they get, so they are going to be hesitant to pay a lot of money for raising associate salaries. But we can't just look at how much partners make (PPP) to determine how much they will lose out on. We also have to look at leverage ratio. Let's say firm C has leverage of 6 and PPP of $1.5 million, whereas firm D has leverage of 2 and PPP of $1.4 million. Riasing salaries to the tune of $30k per associate is going to have a much larger effect on partners at firm C. In fact, in this example, firm C will see PPP go from $1.5 million to $1.32 million. Firm D, however, will only go from $1.4 million to $1.34 million. Not only do partners at firm C end up with lower PPP now than their peers at firm D, but they lost a larger percentage of their cut (12% vs. 4%). Partners at firm C are going to be much more reluctant to move, even though they have similar PPP to firm D.

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Re: NYC to 200k

Post by Anonymous User » Tue Jun 19, 2018 5:12 pm

Anonymous User wrote:
Anonymous User wrote:
Anonymous User wrote:I think we're going to see some market separation on this one. No way Jenner raises. Maybe not Mayer Brown either, given their leverage and the fact that they are already a third fiddle to Kirkland and Sidley in their home market anyway. O'Melveny is over $2ppp but has high leverage. Fenwick's leverage is almost as high and profits are a lot lower. Covingttton is Covingttton. While it's confusing that firms like Gibson and Latham haven't announced yet, the delay on this may indicate that a lot of firms have finally at least for now hit their ceiling.
Can you explain "leverage" and how that factors into this?
the more associates per partner, the more each partner has to pay for a raise. e.g. if its 1:1, each partner pays the raise for 1 associate; if its 1:3, each partner pays for 3 associates.
Ahhh. Well, surely they recognize that it is because of their leverage that they are able to post those PPP in the first place, so stiffing associates is both short sighted and extremely selfish.

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Re: NYC to 200k

Post by hoos89 » Tue Jun 19, 2018 5:16 pm

Anonymous User wrote:
Anonymous User wrote:
Anonymous User wrote:
Anonymous User wrote:I think we're going to see some market separation on this one. No way Jenner raises. Maybe not Mayer Brown either, given their leverage and the fact that they are already a third fiddle to Kirkland and Sidley in their home market anyway. O'Melveny is over $2ppp but has high leverage. Fenwick's leverage is almost as high and profits are a lot lower. Covingttton is Covingttton. While it's confusing that firms like Gibson and Latham haven't announced yet, the delay on this may indicate that a lot of firms have finally at least for now hit their ceiling.
Can you explain "leverage" and how that factors into this?
the more associates per partner, the more each partner has to pay for a raise. e.g. if its 1:1, each partner pays the raise for 1 associate; if its 1:3, each partner pays for 3 associates.
Ahhh. Well, surely they recognize that it is because of their leverage that they are able to post those PPP in the first place, so stiffing associates is both short sighted and extremely selfish.
Doesn't change the fact that it's a much harder hit on PPP for a firm with leverage of 7:1 to match than one with 2:1 leverage. The underlying financials of the firm with high leverage aren't as strong as its PPP would suggest.

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Re: NYC to 200k

Post by Anonymous User » Tue Jun 19, 2018 5:18 pm

Anonymous User wrote:
Anonymous User wrote:
Anonymous User wrote:
Anonymous User wrote:I think we're going to see some market separation on this one. No way Jenner raises. Maybe not Mayer Brown either, given their leverage and the fact that they are already a third fiddle to Kirkland and Sidley in their home market anyway. O'Melveny is over $2ppp but has high leverage. Fenwick's leverage is almost as high and profits are a lot lower. Covingttton is Covingttton. While it's confusing that firms like Gibson and Latham haven't announced yet, the delay on this may indicate that a lot of firms have finally at least for now hit their ceiling.
Can you explain "leverage" and how that factors into this?
the more associates per partner, the more each partner has to pay for a raise. e.g. if its 1:1, each partner pays the raise for 1 associate; if its 1:3, each partner pays for 3 associates.
Ahhh. Well, surely they recognize that it is because of their leverage that they are able to post those PPP in the first place, so stiffing associates is both short sighted and extremely selfish.
Firms with large PPP are going to match. But there's going to be a lot grumbling about it, and that takes time. For firms on the margin, though, this is tougher, because they are obviously lacking in high value work as evidenced by their need for high leverage to keep pace with PPP. We're hoping not to see market bifurcation here, but it may happen especially because the last round of raises did produce some of that.

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Re: NYC to 200k

Post by Anonymous User » Tue Jun 19, 2018 5:20 pm

Anonymous User wrote:
Anonymous User wrote:
Anonymous User wrote:Is DC just staying at 180?
There is no longer such a thing as a "DC market," or any other city market. There hasn't been a a generation. Hundreds, if not thousands, of DC associates at Simpson, Sidley, Morgan Lewis, etc are on the new scale and will soon get the bonuses they earned.

The firms that have raised compete for summers and laterals with the firms that haven't, even firms in their home market. The associates already at "DC firms" or "Boston firms" or what have you see their law school classmates at what they had thought were peer firms suddenly and inexplicably earning more than them, and they see no reason for their firms not to match.
Technically this is true, but there certainly is such a thing as the "DC market" and "DC firms" in the mind of top law students. Wilmer, Williams & Connolly, Covington, Gibson, A&P, Hogan Lovells, ect.--that's the DC clique, and they constitute a "market" for recruiting purposes even if big New York and California firms have DC satellite offices. These are the firms with the biggest summer classes, the home offices, the most DC-focused practices, the best government exit options, and yes, the most "prestige." Its where the kids at FIP are actually trying to go while throw backup bids at Paul Weiss and Cravath. Some satellites matter more: Skadden, Kirkland, and Cleary for example, create market pressure. Others don't; what the handful of Davis Polk associates in the DC office are making is not important. Comp has never taken center stage in DC: Williams & Connolly is still the top prize despite substantial below-market comp, and Boies DC associates have been making more than other DC firms for years, but its rarely a top choice over Covington or Wilmer.

I strongly suspect all the DC firms will match by July 1. But its telling that none of that core set have moved on the new scale. Never forget that CovingTTTTon displayed this very logic in 2016 when it tried to hold DC salaries steady while offering its New York office a raise--and it only relented after its true "peer" shops went to 180.
Yeah, I couldn't get a job at Boies either.

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Re: NYC to 200k

Post by Anonymous User » Tue Jun 19, 2018 5:49 pm

wtf is taking so long shearman & sTTTerling. cmon

Seriously? What are you waiting for?

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