Legal Commentary

BigLaw back to paying big bucks? Can we say tone deaf?

By Patrick J. Lamb

Above the Law is reporting that Foley & Lardner is raising the starting salaries of first year associates in all of their offices to $160,0000.  The firm will address the lagging salaries of older associates at year end. 

What conclusions can be drawn from Foley's action, which is identical to many other large firms?  Here are a couple of possibilities:

1.  The outcry from clients complaining about the high compensation paid to associates who do not provide commensurate value has ended, and clients are again willing to pay exorbitant amounts disproportionate to value provided.

2.  Recruiting pressures are trumping client concerns.

3.  Recruiting pressures are causing this action, and the partners will respond to the client demands by funding the increased associate compensation out of firm profits.

Increasing the cost of production at a time when clients willingness to spend is at an all time low and interest if making prudent make vs. buy decisions is at an all time high likely will not go down in history as an example of great decision-making.

Full post as published by In Search of Perfect Client Service on November 01, 2010 (boomark / email).