Midwest – The New Arena for Associate Salary Wars

06/19/06

Midwest - the new arena for associate salary wars

The competitive increase in first-year associate salaries by the biggest East Coast and West Coast firms is old news now. The ripple effect however is now being felt in the mid-west law firms. Following suit are Denver-based Holme Roberts & Owen, Phoenix-based Snell & Wilmer, Cleveland-based Ulmer & Berne, and Kansas City-based Lathrop & Gage. They have all hiked salaries to stay competitive.

According to American Lawyer, an affiliate of The National Law Journal, Holme Roberts has increased its salaries from $90,000 to $105,000, a 17 percent hike. Expecting nearly 15 to 20 fresh associates this fall, the 219-attorney firm's bonus structure will lie within the $10,000 to $50,000 range.

Snell & Wilmer has announced $10,000 increase in first-year associates' salaries to peak at $110,000, effective fall 2006. The firm anticipates 19 new associates in its Phoenix office this year. While fresh associates at Ulmer & Berne will be entitled to $95,000 as salary, the 274-attorney Lathrop & Gage is raising first-year salaries by 14 percent to also rest at $95,000.

While the new salary figures are nowhere near the salaries offered by firms on both coasts, the move reflects an increase proportionate to firm size. As Hildebrandt International points out, the firms have to contend with mergers creating bigger firms, which can consequently afford to offer more, and the fewer number of law school entrants. It is no wonder that law graduates with top performances are having a field day.

The salary war witnessed recently began on the West Coast and came after a five-year plateau period. The initial shot was fired by Irell & Manella and Quinn Emanuel Urquhart Oliver & Hedges this time. Gibson Dunn followed and the East Coast firms gave in like nine pins. The rest is history.

The fact that the trend caught fire so fast reflects the phenomenal growth in the legal market. According to The American Lawyer, 2005 revenues for the nation's 100 highest-grossing law firms rose to $51 billion, a 10.6 percent increase compared with 2004. Revenues per partner among those 100 firms climbed to $725,626, up 7.4 percent compared with 2004. On the other hand, admissions to law schools fell and campus recruitments went up. The ensuing scramble to bag the best legal talents available, sometimes even before students graduated was there for all to see.

An apprehension expressed by Hildebrandt International is that these events will result in escalated demands from first-year lawyers causing early burnouts due to less people doing more work. If that happens, it would only underline the sentiment that too much of a good thing does no good. Only time will tell.

Law firms increasing diversity
The predominance of white males, rigid work schedules, class-based promotions, and glass ceilings are much debated issues in the legal world as we have known it traditionally. Many firms are working towards a better 'social' order, legally-speaking.

Quarles & Brady Streich Lang's appointment of Nancy Philippi as the new diversity manager is a case in point. Her mandate will be to add minority attorneys as well as encourage interaction with women associates and minority service providers and contractors. This reflects the emphasis on increasing the number of women and minorities within the firm. The appointment of diversity directors is a common practice at large multinational corporations but not at law firms. This firm also has an associated Native American summer internship program for first and second year law students.

Another large and prominent law firm with a strong concentration of Hispanic attorneys is Greenberg Traurig based in Miami which has as its Chief Executive, Cesar Alvarez himself a Latino. The firm's partners also opine that diversity helps their firm to compete in global markets.

Among others, Perkins Coie Brown & Bain adds its two bit by aiding minority and nontraditional law students prepare for the first year of law school at University of Arizona. In addition, it contributes to Arizona State University's minority legal writing program and also provides associated internships and scholarships under the stewardship of Diversity Committee Chair Jodi Feuerheim.

Likewise, Bryan Cave and Fennemore, Snell & Wilmer also contribute by offering flexible work schedules, extended leave, and other leeway for parents and attorneys with families.

Business development spending
A recent survey conducted by ALM and The Brand Research Company reports that law firms are recruiting more business development executives and investment in such matters is on the increase. Called the 2006 "Law Firm Business Development Practices Survey," it is the second in a series and analyses various aspects related to law firm business development and sales structures programs and spending. As many as 157 of the largest law firms in the U.S and abroad provided responses on topics including strategies for business development, staffing and resources, feedback from client, areas of practice, and targets for industry growth.

Survey results revealed that business development budgets had exceeded $ 1M per year, as reported by a third of the firms surveyed. More than half reported an increase in these budgets by an average of roughly 6.6 percent from 2004 to 2005. The firms surveyed also reported that more than half their budget for business development was geared towards existing clients, and that half of their lawyers were directly compensated for bringing in new customers.

Washington DC-based The Brand Research Company is known for its expertise in researching factors that make for client loyalty and contribute to successful marketing. ALM Research, on the other hand, has made a name in providing researched information on leading law firms both U.S.-based and global.

Australasian law firm merges with DLA Piper
The Australasian law firm Phillips Fox has merged with DLA Piper Rudnick Gray Cary, which is the second largest law firm in the world. It thus becomes the first Australian law firm to form an exclusive alliance with the giant international law firm. The move reflects the increasing globalization of business in today's world.

The new firm will be called DLA Phillips Fox , effective September 4, and will have 1400 personnel spread over Vietnam, New Zealand, and Australia. The combined expertise of its associates will provide a fillip to the joint foray into the emerging Asian and Middle Eastern markets as well as provide an entry point for DLA Phillips into the Australian and New Zealand markets.

Both partner firms are expected to benefit from this deal. DLA shall receive increased access to the Australasian market while extra work generated by this alliance is likely to lift revenues at Phillips Fox.

Phillips Fox is a law firm dating back more than a hundred years and today considered one of the largest in Australia with 185 partners in 10 offices across 3 countries. DLA Piper Rudnick Gray Cary is the pioneer of an alliance forming the DLA Piper Group which works towards servicing clients all over the world in a broad all-inclusive manner. It comprises more than 3,000 lawyers in 59 offices in 22 countries.

COOL THREAD OF THE DAY

Last week, we reported the sad case of stuckin3rdyear, a Judged member who has been given the shaft by his law school. This week, some of our Judged experts offer him their advice.
 

Trying to finish law school, but I need help

stuckin3rdyear: I am from Houston. Went to law school in NY. I had completed 72 units (out of 88), was entering my last semester of law school and was academically disqualified. My core class GPA was .05 from the minimum, while my overall GPA was in good standing. My initial petition was denied. On my second petition, my Dad spoke with the Dean of the law school a couple of times; and to make a long story short the Committee suddenly approved my petition, but with a plethora of conditions. (like taking a first year exam, and doing 1.5 years more of classes)

On the conference call with the Head of the Committee and the Dean of Student Services, they both told me they really don't want me graduating from their school, and that is why the conditions they imposed were so harsh. They went further by saying they had no intention on re-admitting me, but did so anyways. My interpretation of this was the Dean stepped in. The Dean of Student of Services told me that she would contact local Houston law schools to see if they would accept me as a transfer. To no surprise, no law school in the country would accept a student who only has 16 units left to earn his degree.

The situation as it stands is that most law schools would take me as a visiting student, as long as I get a letter of permission from my home school. They have flatly refused, because they say; that would mean my classes would transfer back and I would get their diploma. Which is what they don't want. My father and I have tried contacting the Dean several times a day (everyday for the past week), we have even sent a letter to him, but have received no response. I am stuck, I can't finish law school, unless my home school gives a me a letter of permission to visit, or a letter of good standing for me to transfer. They are refusing to do both. I can't move on with my life, it's like they have me by the balls. It's actually quite cruel. Any ideas?

rhcp1117: It sounds to me like you should just suck it up and fulfill the conditions that the NY law school is putting on you. You are lucky to have a second chance at all.

Luckymom: You could always pay for an hour of time with a good New York lawyer who has experience with university level academic institutions to get a preliminary view of what possible alternatives are available to you.

Anerlin: I agree. If you were told they didn't want you graduating from thier school, they will find a way to keep you from doing so. Maybe you could at least get the transfer and finish up at a school that will be a bit more objective.

rbrown: sucks dude. get pops to give the school a couple more calls.

legal_dick: that's a shame. how long have you been leaning on them for a letter of permission to transfer? if they're willing to take you back with crazy conditions, you at least have that as a failsafe.

stuckin3rdyear: It's been about 3 months. Just this morning, after calling 20 times a day, we finally got through the Dean's secretary, who said the Dean is out of country until July 21st. After much cajoling she gave my Dad and I an appt. for July 14th.The deadline for visiting student applications at most Houston law schools is July15th. I am trying to find a lawyer, but I don't think scaring them or threatening them is the answer. I tried finding a lawyer through the state bar referral program- but they came up empty.

I have an appt. with the Dean of Student Affairs at a Texas law school on Monday, hopefully she can make a call or help me- but I highly doubt it. I really don't know what to do, anymore.

hamburgerman: so its an academic thing, right? you got in trouble for a low grade? i would just suck it up and play by the school's rules. they are definitely screwing you, but after you graduate, you're gonna get screwed plenty by your bosses and coworkers at firms.

stuckin3rdyear: You may have a point. I spent a couple of hours yesterday trying to find an attorney, but its a no go! The only concern I have is how am I going to be able to finish my degree in an environment where the Dean of Student Services, and several professors (who denied my petition the first time) on the Board of Academic Standards, clearly don't want me there, and have told me that they have made it impossible for me to graduate Nevertheless, I don't have much of a choice right now, I will begin considering biting the bullet.