Curious if any partners are aware of any convos at the biglaw level about associate comp increases / cravath scale tweaks. Not trying to be greedy, truly just curious. We had a couple back to back with the last increase in 2018. Covid appreciation bonus seems like an acknowledgment of this, but it was a one off. Record profits and inflation possibility makes me think it has to be on minds.

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Very interesting question. Very few firms have economics that can sustain paying Cravath scale much longer - Cravath, Wachtell, DPW, STB, Latham, Kirkland, maybe a few others. The rest of the Cravath scale firms have been hanging on by their fingertips. It wouldn’t actually surprise me if one of the above went to $200k this year in an effort to create the inevitable fracture in which a small pack will step up and the rest of the peloton will (finally) fall back by not matching. That’s for sure going to happen soon and the recent excellent performance by the bug boys may be the final catalyst for the break. That’s one of two reasons that I don’t think this is something that most associates should hope for. The other is that another bump will inevitably cause further erosion of the working conditions at the firms that do make the jump, especially in the area of hours. The raise will for sure come out of associate hides. For a first year that extra $10k means an extra 2 billable hours per week, +/-. Whether that’s a lot is for each of you to decide. But you for sure aren’t going to share in the spoils of higher profits. Those ducats will go to the tippy top of the partnership.

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Really hard to say. I used to have a lot of contact with Fenwick, Cooley, WSGR, etc. back in the day when I was representing a bunch of tech companies. This is like 1998-2007 or so. At that time it appeared to me that their practices centered mostly on startups that that represented though venture and PE deals and public offerings. Sometimes they had board seats and stuck with the companies post IPO but in other cases the really successful clients jumped to NY counsel for their high value work. And, critically, many of their clients paid for work with stock rather than cash. Those deals sometimes work out great but often don’t. If those firms are still doing the same thing I would bet that they are having a tough time with associate comp, simply because many of their clients are cost sensitive. The insulation that the big NYC firms have is their work for large investment banks and PE outfits, whose deals often allow them to lay off legal costs on counterparties. Those firms’ clients also often for political reasons just have to use one of the big NY firms, which gives those firms billing leverage that just doesn’t exist when a client can hire great lawyers at a dozen firms who are willing to bargain on rates. I have no information about the current business models or finances of the firms you mentioned. But if I had to guess I would guess that they are sweating when the next bump happens, because at that point they will face the dual challenge of attracting and retaining associate talent good enough to do the work and paying rainmakers enough to avoid losing them to competitors. If I had to guess the approach will be quality of life adjustments, which if they happen will give folks the option to make less in exchange for a better work life balance.

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Our resident cool partner TL1 has given some insight into this subject in the past. It could be that another increase in the scale would cause many firms to break off from it?

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I’m enjoying how poorly some of these responses are ageing post-Milbank and DPW raises...

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I think a hybrid 50/50 is the right outcome. You?

I don’t see it. The top tier firms may be doing OK but tons of firms, even top tier, had to do salary cuts and/or (stealth) layoffs in 2020. We’re still in the recession. I don’t see increases anytime soon.

Yeah all valid points!

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