Biglaw Firm Tells Associates They Can Afford To Raise Salaries... But They're Still Not Going To
A surefire way to annoy your associates.
Back in 2016, Fish & Richardson raised salaries across its offices to match the $180K scale, making its silence during the current wave of raises all the more deafening. Early on in this cycle, we noted that any firm that raised in 2016 and didn’t offer this raise — which amounts to basically a cost-of-living adjustment — would signal to the entire market that they felt they overreached in trying to play with the elite firms.
Today, Fish & Richardson declared that it is comfortable sliding into that niche of sub-elite firms. That’s not necessarily a mark of shame… some clients need a firm below Cravath-level. But it does force a recalibration among associates and law students considering where they want to work this year and beyond.
For its part, Fish & Richardson announced the news via a business hours email — a format that should be reserved for full matches — and, hooboy, what an email it was!
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After informing associates that, no, they would not be seeing any change to their compensation, the firm decided they had to actively brag about how much money they’re making. It’s the mentality of an adolescent getting publicly dumped and telling everyone they know about how much sex they’ve been having with a girl you don’t know from another school:
Fish has maintained its associate salary scale at the top of the market for many years, responding to and matching each scale increase. As is the case with all firms, doing so has involved assessing the financial impact, electing to match, and then absorbing the impact…. We have never been stronger than we are today, by every measure – we have strong and well managed finances, no long term debt, recent historically robust economic performance, and a very busy and promising 2018 and beyond, with an enviable and enormously valuable brand, clientele, and market position, and the best legal talent in our practice areas.
“These are the Glengarry leads. And to you they’re gold, and you don’t get them.” Some may think this was a tasteless move for a top 50 PPP firm to write in a compensation email, but you’ve got to respect their commitment. If they’re going to functionally tell their associates to look elsewhere, might as well put an exclamation point on it.
For their part, management did offer some justifications for their decision.
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1. Billable hours expectations. Our business is built on a 1900 billable hour expectation for our associates and principals. This is important to us and we don’t want it to change. We build our annual budgets and measure our expectations and success based on this organizing principle of our firm economics. We value the very strong work ethic of our associates and principals, and we celebrate and reward it (see below), but our budgets, compensation and bonus systems, and our culture are based on a true 1900 hour expectation…. With a 1900 billable hour expectation, we can do these things while leaving time for a fulfilling life outside of work.
One of the very best reasons to not raise associate salaries is maintaining a lower billable hour target. Unfortunately, multiple tipsters say that’s not what happened here:
- One final thing about our bonus system – the firm likes to brag about our 1900 hour requirement but if any associate actually works only 1900 hours we don’t get paid anywhere close to “market.” To receive a market bonus the firm requires we bill 2100 hours. So now we have to bill 2100 hours to receive a bonus commensurate with market bonus, and our salary is still lower.
- Specifically, the firm does not have a true 1900 billable hour expectation in the way that actual top-tier firms do. In other words, you absolutely do not get market (Cravath) bonuses at the 1900 mark. To get market bonuses in line with “peer” firms (though it’s fair to say that Fish cannot fairly claim to be a top tier firm anymore), you have to bill at least 2100 hours. Even if you fall just a few hours short of 2100, they will dock at least 50-60% of the market bonus. Recruits should know this.
UPDATE: But in fairness, one tipster wrote acknowledging that the firm does use a black box for bonuses but that they know of another associate who got market bonuses despite not exceeding 1900 hours most years. So there are a plethora of takes here.
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The reasoning doesn’t get much better.
2. “One firm” culture. A guiding principle of the firm’s growth from one small office in Boston into a national IP powerhouse with eleven offices from coast to coast and a Munich office (along with our upcoming expansion into China) is that Fish is one firm. This means, among other things, that we have a single associate salary scale across all of our US offices, rather than one that varies by geography or practice group. Continuing to follow the herd by matching scale increases would put a great deal of pressure on our system, to the detriment of this positive and valuable aspect of our culture.
That’s stupid. Most of the firms matching this scale are doing it in all of their offices, which is also stupid. There’s no need to pay an attorney in some mid-tier market the same as an attorney in a major market. It’s not a commentary on “how hard” they work, it’s a factor of the marginal value of associates to the firm in different offices and a cost of living assessment that an attorney in bumblef**k at 80 percent salary is living a life equivalent to a New York associate. A decade ago, that wasn’t a controversial statement. It shouldn’t be again. #MakeAmericaUnderstandGeographicalRealitiesAgain.
3. Principalship track. We are not an “up or out” firm. We invest in the careers and development of our associates, and we hire associates we genuinely believe can progress to principalship. This works for us, as evidenced by the quality and retention of our outstanding group of principals. We see a relationship between our investment in our people, our commitment to provide meaningful opportunities early, the culture around our 1900 billable hour expectation, and our intent for our associates to progress to principalship.
First of all, see above about that 1900 hour requirement. Second, as one tipster held a dim view of the training culture, saying that “most of the principals eschew their responsibility to train new associates, and will instead attempt to poach associates trained by principals who actually care.”
4. Bonus system.
Yeah, this one was entirely a non-starter for the tipsters, pointing out that Fish basically requires elite hours to get a market bonus. Meaning the firm is functionally admitting that they aren’t matching base salaries so they can continue to match bonuses. In other words… they can’t match actual compensation.
5. Our clients. Our clients, their success, and our role in serving them successfully as their partners are the foundation of our business. Many things are changing and evolving in our industry, but there is none more important than the fact that our clients are ever more focused on the value they are receiving from their law firms.
Evidently, Fish is depending on clients to balk at hiring the Biglaw elite firms.
They are probably going to be waiting for a while.
(Check out the whole email on the next page.)
Joe Patrice is an editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news.
