144 replies to this topic

[Sneakeater]

That it's proof that the legal profession is doing well that (ostensible) billing rates are going up even though (employee) compensation is going down.

[TaliesinNYC]

I guess you could say that since AB is going by a blog with a reputation for gossip as one of his sources.

[Sneakeater]

That's certainly a point.

[TaliesinNYC]

Sorry, meant to quote Lex. I don't always use the "reply via quote" function when I should.

[Anthony Bonner]

I'm not talking about salaries but billable rates.

If the financial industry isn't doing so hot, it stands to reason that the legal industry must follow suit. But that's not the case.

And don't say it varies from firm to firm. Every firm follows the party line from Sullivan & Cromwell on down to third-tier places.

What argument are you trying to make?

I should have thought that was kind of obvious.

It isn't. Are you saying billable rates are up so profitability is up or are you saying billable rates are up because wall street is up?

Are billable rates back to '07 levels? Is partner comp back to '07 levels? if so why are the screwing the their employees? If wall street really is about to decline precipitously, then yes eventually that will be bad for the lawyers - but right now they are just recovering from their '08 near death experience. They are a link further down the chain. Additionally there is I imagine quite a bit of litigation involving the GFC at the moment.

Additionally a point I made elsewhere (or maybe just earlier in this thread) is that relative to history the spread between lawyers and finance has just gotten to be massive. I think you can look at the SEC investigations of the HFs as just the first step in an increase in regulatory oversight that is going to transfer wealth from the HF community to the legal world. With a big deadweight loss in for the form of lower returns, and this lower carry.
NB- This is not necessarily a bad thing

[Anthony Bonner]

I guess you could say that since AB is going by a blog with a reputation for gossip as one of his sources.

fair point. unless you think they fabricated the memo and no one felt the need to correct them.

ETA: I expressly refuse to post any of the rumors on their sibling site, precisely because they don't have things like reproduced memos.

[TaliesinNYC]

I guess you could say that since AB is going by a blog with a reputation for gossip as one of his sources.

fair point. unless you think they fabricated the memo and no one felt the need to correct them.

ETA: I expressly refuse to post any of the rumors on their sibling site, precisely because they don't have things like reproduced memos.

Didn't click the link because I don't make it a habit of reading the site.

They probably got their hands on "a" memo, then wrote a story around it. No law firm is going to bother to correct their "story" when the correct/wise thing to do is not comment about it.

[TaliesinNYC]

I'm not talking about salaries but billable rates.

If the financial industry isn't doing so hot, it stands to reason that the legal industry must follow suit. But that's not the case.

And don't say it varies from firm to firm. Every firm follows the party line from Sullivan & Cromwell on down to third-tier places.

What argument are you trying to make?

I should have thought that was kind of obvious.

It isn't. Are you saying billable rates are up so profitability is up or are you saying billable rates are up because wall street is up?

Are billable rates back to '07 levels? Is partner comp back to '07 levels? if so why are the screwing the their employees? If wall street really is about to decline precipitously, then yes eventually that will be bad for the lawyers - but right now they are just recovering from their '08 near death experience. They are a link further down the chain. Additionally there is I imagine quite a bit of litigation involving the GFC at the moment.

Additionally a point I made elsewhere (or maybe just earlier in this thread) is that relative to history the spread between lawyers and finance has just gotten to be massive. I think you can look at the SEC investigations of the HFs as just the first step in an increase in regulatory oversight that is going to transfer wealth from the HF community to the legal world. With a big deadweight loss in for the form of lower returns, and this lower carry.
NB- This is not necessarily a bad thing

Sneak got the point I was trying to make. He understands me so well, it's frightening.

ETA:

Compensation [salaries] is either declining slightly or in a holding pattern. Almost none of the major firms are going to take a plunge in terms of salary reduction because that would mean a death knell when the economy turns around again and hiring/salary offers inevitably reverse themselves. People have long memories when it comes to that kind of thing.

The industry as a whole is doing fine. Maybe not as well as 2007 -- I don't recall saying that -- but well enough that some things are starting to rebound. But whether it becomes permanent or is merely temporary, well, time will tell.

[Sneakeater]

The problem is, I was being sarcastic.

Billing RATES don't mean anything. COLLECTIONS do. If the firms are actually collecting those rates (for as much work as they've done in the past), and not passing the proceeds on to employees, that's a sign they're scared, not a sign they're doing well. But I don't even see any reason to assume they're actually collecting those rates (for as much work as they've done in the past) in the first place.

[Anthony Bonner]

I guess you could say that since AB is going by a blog with a reputation for gossip as one of his sources.

fair point. unless you think they fabricated the memo and no one felt the need to correct them.

ETA: I expressly refuse to post any of the rumors on their sibling site, precisely because they don't have things like reproduced memos.

Didn't click the link because I don't make it a habit of reading the site.

They probably got their hands on "a" memo, then wrote a story around it. No law firm is going to bother to correct their "story" when the correct/wise thing to do is not comment about it.

really

so they wouldn't correct the Journal?

http://blogs.wsj.com...f-bonus-season/

If you don't want to believe that, then fine. The NY Law Journal has virtually the same exact article behind a paywall. They also have a litany of links saying other top firms are matching the cravath bonus schedule.

[Anthony Bonner]

The problem is, I was being sarcastic.

Billing RATES don't mean anything. RECEIPTS do. If the firms are actually collecting those rates, and not passing the proceeds on to employees, that's a sign they're scared, not a sign they're doing well. But I don't even see any reason to assume they're actually collecting those rates in the first place.

thank you. I wanted to make that point, but figured I don't know enough about the inner workings of the legal world to know what I am talking about.

[TaliesinNYC]

The problem is, I was being sarcastic.

Billing RATES don't mean anything. RECEIPTS do. If the firms are actually collecting those rates, and not passing the proceeds on to employees, that's a sign they're scared, not a sign they're doing well. But I don't even see any reason to assume they're actually collecting those rates in the first place.

thank you. I wanted to make that point, but figured I don't know enough about the inner workings of the legal world to know what I am talking about.

I can't think of any firm I've ever worked for that doesn't have difficulty collecting on its bills even when the economy was doing well.

[Sneakeater]

Sure, but there's difficulty and then there's difficulty.

If firms are raising billing rates now, I think it's more along the lines of a first step in an anticipated negotiation than a firm expectation they'll be paid what they charge.

[TaliesinNYC]

I guess you could say that since AB is going by a blog with a reputation for gossip as one of his sources.

fair point. unless you think they fabricated the memo and no one felt the need to correct them.

ETA: I expressly refuse to post any of the rumors on their sibling site, precisely because they don't have things like reproduced memos.

Didn't click the link because I don't make it a habit of reading the site.

They probably got their hands on "a" memo, then wrote a story around it. No law firm is going to bother to correct their "story" when the correct/wise thing to do is not comment about it.

really

so they wouldn't correct the Journal?

http://blogs.wsj.com...f-bonus-season/

If you don't want to believe that, then fine. The NY Law Journal has virtually the same exact article behind a paywall. They also have a litany of links saying other top firms are matching the cravath bonus schedule.

Did you see the part where I said that every firm marches according to the party line?

I'm not talking about bonuses.

Apples and oranges are round, they don't bounce and they're fruits. But one does not equal the other.

[Sneakeater]

What do you mean, Talllies? Bonuses are part of compensation, right?

Bonner said employee compensation at law firms is down. How can bonuses be an orange rather than an apple there?