Legal News

From Ping Pong to the Bread Line: The Decade in Associate Life

By Ashby Jones

As the decade draws to a close, everyone with access to a Web site seems to be putting out their “The Decade In ____” lists. From our cursory looks, it seems to have been the decade of Radiohead and Kanye; the Red Sox and Yankees. It was the best decade ever for quality television (does anyone remember life before “The Sopranos”?); the decade that gave us “Googling,” “tweeting,” “friending,” “blogging” and “texting.”

And it was a particularly interesting decade for all those who toiled at one point or another as law-firm associates. The decade that began with the dot-com boom is ending with jobs lost, salaries stuck, and bonuses as small as they’ve been in years.

The NLJ’s Leigh Jones has a nicely done retrospective, out Monday.

Writes Jones:

Between 2000 and 2009, law firms doled out jaw-dropping bonuses, lavished benefits like never before and hiked first-year salaries to a point that drew the envy of federal judges. The decade also featured mass job cuts, pay reductions and a decided shift in power for recent law graduates, many of whom, at the decade’s conclusion, were clamoring for even part-time work at living-wage levels.

Our favorite part of Jones’s story is the bit on the early days, before 9/11 and before the NASDAQ fell below 5000. Interesting, isn’t it, that the firm that launched the salary-war that drove the nation to $145,000 for first years was a tech shop called Gunderson Dettmer Stough Villeneuve Franklin & Hachigian?

And the bonuses of the era! Jones reminds us that BigLaw in 2000 was paying year-end bonuses of $40,000 for first-year associates. At the time, says Vinson & Elkins lawyer Jonathan Leatherberry, 3Ls could afford to walk around with a sense of entitlement.

The attitude among graduates “was like, ‘I can go anywhere, and you should make me happy by letting me wear chinos and a golf shirt and having a ping-pong table in the break room,’ ” says Vinson & Elkins lawyer Jonathan Leatherberry, who will become a partner in the firm’s Dallas office in January.

That all changed in the leadup to and aftermath of 9/11. In October, writes Jones, Shearman & Sterling said it expected to cut up to 10 percent of its associates, and the following month Holland & Knight rescinded offers for summer associates.

Still, in the middle part of the decade, things stabilized. Then the work came back — in a big way. In 2006, BigLaw jumped its first-year salaries to $145,000, the first salary increase since 2000. The very next year, big firms elevated first-year salaries to $160,000 plus bonuses.

Then the real estate market crashed, credit dried up, and a huge recession hit, which again shifted the balance of power at firms from associates to the partners.

Going forward, life may stay more intense for associates. Several firms this year have announced that they were eliminating lockstep pay, which compensates associates primarily on their years of service.

Reed Smith chairman Gregory Jordan suspects more changes might have to happen: “Law firms have felt a level of pain and gotten a closer look at the abyss than ever before. The lessons learned burned a little more deeply.”

Full post as published by Law Blog - WSJ.com on December 21, 2009 (boomark / email).