On the Record

Happy Monday! Enjoy these law links:

• Miles & Stockbridge keeps its associates informed about firm finances.
• Fired Public Defender Nancy Forster was “totally selfless, devoted, and delightful” when Jon Katz worked with her on an appeal, he writes.
• The Washington Post has a story this morning about an absolutely crazy lawsuit. (HT: Above the Law.)
• Remember the case where the judge referred to a drug defendant’s girlfriend as his “baby mama”? It’s heading to Wisconsin’s top court after another appellate court held that the judge’s comments could create a reasonable perception that the defendant’s sentence had something to do with race.
• What should a law professor wear on the first day of class? Readers, do you remember any profs from your own law school days who made interesting sartorial choices?

Once again, Miles & Stockbridge scored high in the American Lawyer’s survey of midlevel associate satisfaction. Last year, the firm placed second; this year, it’s fifth.

As a whole, though, associate morale nosedived this year, which is no surprise.

Current and former Miles lawyers: what is the firm doing that’s keeping its associates relatively happy?

Above the Law is reporting that DLA Piper will be inviting the 2009 summer associates who get job offers to come on board in January of 2011 rather than September of 2010. The firm will be encouraging the current summer associates to defer further, to January 2012.

The 2011 start date is not terribly surprising, given that last year’s crop of summer associates, who just graduated from law school in May, will not be starting until January 2010. It’s hard to imagine any firm in this economy wanting one big group of people to start in January and a second big group to start just eight months later.

The firm’s also going to wait on recruiting summers for 2010. DLA Piper will not do on-campus recruiting until November, after it sees what kind of response it gets from the 2009 summers who get offers. My guess? They’ll get a pretty darn good response, even with the 2011 or 2012 start date. In this law market, if you’re offered a job, any job, you take it. If it’s with one of the biggest firms in the world, so much the better.

NALP has done a survey of lawyer starting salaries and has discovered that the median salary for new lawyers in 2008 was $72,000 and the mean was $92,000. This tells us… approximately nothing.

Almost nobody is actually making these salaries. Instead, starting salaries are clustered around $50,000 and $160,000, giving NALP’s accompanying graph the look of a weird stylized two-humped camel. (You don’t see it? Not even a little?)

2008 actually had the widest bimodal salary distribution of any previous year, meaning that the pay gap between those working at white-shoe firms and those doing almost anything else was bigger than ever.

As the National Law Journal points out, this graph may look different next year. While in 2008, the going rate for a first-year associate at a top firm was $160,000, in 2009, many big firms have scaled back pay in a nod to the terrible economy. In Maryland alone, DLA Piper, Miles & Stockbridge, McGuire Woods and Venable have all decreased starting salaries, and I’ll be shocked if some of the other big firms here don’t follow suit.

Of course, there’s a limit to how much the look of this graph will change from this year to next. While the big firms are lowering salaries, they’re not really going below $120,000 or so, and you can bet other entry-level lawyers are not seeing their salaries increasing.

It was only a matter of time.

Our 2009 incoming associate salary chart showed earlier this month that Venable was still planning on paying the current crop of incoming associates–well, the crop that was supposed to start in September but now will start in January 2010–last year’s going rate of $160,000. According to Above the Law, an in-house memo says that first-years will now earn a mere $145,000, in line with what other big firms, such as DLA Piper, are doing.

That’s just the beginning of the cuts. Everyone, possibly even up to equity partners, will see their numbers go down, effective July 11.

Above the Law has a leaked memo from DLA Piper saying that the firm is cutting first-year associate salaries. DLA Piper confirms. Last year, the firm’s number was $160,000 in larger markets, including Baltimore. Now, the newest incoming associates will make $145,000 instead — when they actually start. Remember that DLA Piper, like many other firms, has delayed first-years’ start dates. Instead of starting work in September 2009, DLA Piper’s new lawyers will not report to work until January 2010, though they will get a stipend in the meantime.

The memo also says the firm will adjust salaries for other associates based on year and performance. The firm says partners, of counsel and senior counsel lawyers have also taken pay cuts.

From the American Lawyer by way of Texas Lawyer comes this short piece on how firms decide which associates to lay off. It’s worth a read, though there’s nothing earth-shattering. David Bario and Drew Combs write:

So how are associates marked for extinction? Who lives, who dies, and why?

It’s not simply a matter of hours. There is a calculus involved. Some firms really are “realigning,” or making up for lack of traditional associate attrition. Others are tossing deadweight as fast as possible from a sinking ship. But even though a number of agendas are at work, firms usually start at the same place: billables.

…

Still, firm leaders say it’s rare to simply draw a line and fire every single associate who falls below it.

The writers talk to one law firm chairman who tells them that one lawyer may be producing fewer hours than a colleague but doing better work. The competent attorney with low hours may be spared.

That’s a relief, at least. I know I’m hardly the first person to point this out, but isn’t there something wrong with a culture that rewards junior employees for taking a really long time to complete their work?

HT: ABA Journal.

Womble Carlyle laid off a bunch of people yesterday, but relax: ex-Gov. Bob Ehrlich was not among them.

First of all, the fired employees appear to have been associates and staffers. Second of all, none of the cuts affected Womble’s little 10-professional Baltimore office, a firm spokesman tells me. The spokesman, Russell Thomas, would not confirm how many people in Womble’s other offices were laid off. Third of all, laying off the former governor of Maryland might be considered a teensy bit poor form.

Ehrlich, a few of his former employees from the statehouse, and some of his political allies started Womble’s Baltimore office in 2007 after Ehrlich lost his reelection bid. (Some have speculated, but Womble has denied, that the Womble outpost is a “shadow government” and that Ehrlich and company spend their time planning a rematch with O’Malley.)

So no, Ehrlich won’t be hanging around his house in sweat pants and bunny slippers, eating Bugles and watching daytime TV any time soon. In case you were worried.

UPDATE: WOMBLE RESPONDS

Although blogs have reported that some of those laid off were associates, Thomas said they were all staffers. Some lawyer salaries have been reduced, he said, but the lawyers themselves have not.

Just a couple of years ago, big-firm associates would have rejoiced at the news of a cut in their minimum billable hour requirement. In my reporting on the business of law beat, I got the impression that some of them would gladly have accepted a slight pay decrease in exchange for the chance to bill “only,” say, 1,800 hours.

I doubt the Hogan & Hartson associates who just got their billable requirements knocked back are doing much celebrating.

Here’s the way Hogan usually works: the firm has two associate billable hour tracks, one at 1,950 and the other at 1,800. Associates had their choice, though I imagine those who wanted to make partner would feel bound to bill the higher amount. As of fall 2008, Hogan was paying first-year associates $160,000 at the 1,950-hour level and $137,500 at 1,800 hours.

Above the Law reported that Hogan is now actually bumping some associates down to 1,800 based on their low billables over the last five months. (Those low billables, of course, would be a result of the decreased amount of work the associates get now that, you know, the sky is falling.) Associates who started at the firm in 2008 and just got knocked back to 1,800 hours will now make $145,000. Those who chose the 1,800-hour track will still make $137,500.
“At first blush, you might say, well, that seems unfair,” Hogan chairman Warren Gorrell told me this morning. But, he said, the firm saw no reason to give those who chose the lower track a raise in this economic climate. Gorrell said that lawyers who bill above 1,800 will get a prorated increase in pay.

It’s one thing for an associate to get to choose how many hours to bill, confident that if she wanted at some point to move up from 1,800 to 1,950, the work would be there. It’s another for an associate to get involuntarily bumped down because there’s not enough work to go around. No, I’m thinking no one’s pleased here.

Really, though, Hogan is basically doing what other firms have done in cutting or freezing associate salaries, just in a more targeted way. Most associates at those firms surely have less work these days, too. Hogan is just making an explicit connection: less work equals less money.

On a related note, Hogan is laying off 93 staffers, but Gorrell said the firm will not disclose which offices were affected.