Orrick Herrington & Sutcliffe in June said it was laying off 90 attorneys and staff. Pay bumps are “happening at a time where associate productivity is at some of the lowest levels we’ve seen,” said Les Starck, a consultant in Wells Fargo’s legal specialty group. Instead, work at many firms fell off dramatically from the peak in 2021, when a frenzy in the deals market pushed the industry into an unprecedented war for talent. The salary boosts come as a shock to many in the industry because such raises traditionally arrive during boom times. Milbank two years ago engendered the last round of salary increases, with first-year associate base pay then rising to $215,000. Milbank chairman Scott Edelman cited “high levels of activity” across the firm. “In a competitive environment where you cannot reach out to other firms to benchmark, you just have to react to these market changes and be ready.”Ĭravath declined to comment on its reasoning for the new scale. “We are all competing for the smartest minds in this industry,” Miguel Zaldivar, Hogan Lovells CEO, said in an interview. Those firms include Kirkland & Ellis, Paul Hastings, McDermott Will & Emery, Paul Weiss Rifkind, Wharton & Garrison, Davis Polk, Baker McKenzie, Dechert, Cleary Gottlieb, Hogan Lovells, Sidley Austin, Fried Frank, and Mayer Brown. 7 for junior lawyers, though Cravath doubled Milbank’s $10,000 boost for senior associates.Ī growing list of other law firms said in the aftermath of Cravath’s announcement that they will match the scale. The move matched Milbank’s surprise increase Nov. 28 it will raise annual pay to a seniority-based scale of between $225,000 and $420,000. Some will avoid such raises and suffer the fall-out of “more poaching” from firms that can pay top compensation, he said.Ĭravath, the standard-setter for salaries in Big Law, said Nov. The prospect of Cravath-type raises will “stress a lot of firms,” said Peter Zeughauser, a law firm management consultant at the Zeughauser Group. “This could be the year” the pool of firms following Cravath shrinks, she said. While firms in the top tiers of revenue and profitability are likely to follow Cravath’s lead-and several already have-others in the industry are ill-positioned to do so, said Michelle Fivel, a legal recruiter at Hatch Henderson Fivel. Cravath Swaine & Moore’s move to raise associate salaries beyond the scale set by its rival Milbank pressures less-profitable firms to ponder pay bumps they can’t afford.
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