Welcome to another edition of Thinking Like a Lawyer.I'm Joe Patrice from Above the Law.
That's Catherine Rubino.Chris isn't going to say anything.
He's here, though.I promise.
There he is.So Catherine Rubino and Chris Williams, also Above the Law, are here.And this is the show that we do every week to recap some of the big stories in legal.But first, we begin with some small talk. this segment.Yeah.Yeah.All right.So yeah.
So how's everybody doing?You know, we've got we've had a time change, you know, that's been useful.Like there's daylight in the mornings now.So that's kind of nice.
What is it?There was a, I think it was Bill Burr.He did a SNL thing.It was weak.I was disappointed.
I remember, I remember the last time I saw him on SNL, it was like the, he had a big thing and he was like, white women, you voted with white men, you get the punishment too.And it was great.
And now it was just like, oh, well, you want me to talk about it?I guess I'll talk about it.But nothing, it didn't really hit.It didn't hit.It felt like his like B-side stuff.Like it was Bill Burr, but it wasn't Bill Burr.
I saw the Buffalo Wild Wings sketch, I thought that was really well done, about New England Patriots fans and what they're all like.And that's a sleeping generalization and I'm gonna stand by it.
I just saw the part where, cause what was it?I think it was the monologue.Cause I think it was a, there was a Dave Chappelle monologue that came to mind that feels like it's historically relevant on SNL.That was the Bill Burr one.
And then Bill Burr came back and I was like, okay, this is going to be, this is going to be good.And then it was meh.And I was like, eh, you know, disappointed.
I mean, I think it's also probably because there seems to be a different reaction to the election this time around.I think people are more sad than mad, at least from from my my perspective.
But I don't I don't know what other people are hearing out there.OK.
Well, great.With that said, I think.Not to put a damper on small talk.
Temporarily relevant.Excuse me.Yeah, I mean, I should have bet on this election.I remember there was a point where I was like, I can't believe they're letting bets happen.
And I was like, oh, I should have dumped thousands on Trump because I wasn't surprised.There was a point early on and I was like, we went from coconut memes to actually Dick Cheney is Brett. And I was like, what, what is this?
Like, why would you vote for the decaf Republican when you can just go full Republican?Nobody opts in for Diet Coke over a Coke in private.Go for the full thing.I was disappointed.
I don't like that comparison because Diet Coke is in fact better than regular Coke at this point, but I do hear what you're saying.Of course you'd say that in public.
Oh, it's so much better.Like the taste is just better now.
I do remember back in like- And or we've been slowly poisoned for long enough that we think that.
Maybe.Listen, I agree, but.I remember the first time I had Diet Coke back when I was young, and it was just a disgustingly different flavor than the regular Coke.But now I think it's actually superior.
Yeah, because we've all been poisoned over time.
Yeah, I think that reminds me of it was a Norwegian study on taste.And what they said was, that's because you've lost hope.And as the hope declines, the appreciation for ascertain increases, you know.
That checks out, actually.I do love Diet Coke, though, and I find it vastly superior to Coke Zero, which is just the like, imagine if it was Coke-ish.
Well, I actually think that's a key thing.Coke Zero is supposed to be like Coke, and I have it, and I'm like, you're right, it is, and therefore I don't like it as much as I like Diet Coke.
Yeah, I tried to have some this weekend at an event, and that's what there was.I was like, Oh, OK, I guess, you know, it's fine.And I was like, Nope, I don't enjoy it.
Like if I'm going to put if I'm going to be drinking soda, I at least want to really enjoy the experience.And it's not like so Baja Blast. No, that's not, that doesn't hit for me.I'm telling you Diet Coke is like what hits.
Diet Dr. Pepper, I'll tell you what is good in the zero form is Sprite Zero.That is a solid, solid beverage.But I don't know, Coke Zero just feels like it's like a try hard of the beverage world.And I'm just not there for it.
Well, now let's be mercifully done with this. So usually we talk about the big stories in legal from the week that was this time we will talk about it from the week that is because we can't really sit on this for any length of time.
We have some actual news about the annual bonuses.
Yeah, we do.There you go.Like that sound.Yet again, Milbank has led the charge in announcing bonuses before the rest of the big law world.They yesterday, well, earlier this week, I'll say on November 11th, they announced their year end bonuses.
Associates in good standing will receive between $15,000 and $115,000, depending on class year, which matches the same scale as last year, which is a pretty generous scale.
So far, no other big law firms have announced their similar or matching scales.It's kind of interesting, because if you'll recall, Milbank was also the firm over the summer
There was a couple of boutiques and smaller firms that did this as well, but the sort of big law firm that led the charge on summer bonuses was also Milbank.
And we really thought, I believed in my heart and my soul, that all these other firms were going to, of course, match these generous summer bonuses.And then it just didn't happen.It was like crickets.
And now that the year-end bonus announcement season is here, what's going to happen?I think most people believe that they will get matches of those summer bonuses as part of their year-end numbers.
But again, because it's part of year-end, there might be sort of conditions on it.Hourly rates, whether or not they're in their office, Billable targets, you mean?Billable targets, sorry.You're right.
Billable targets, whether or not they're actually physically in the office on the required amounts of dates, et cetera, whereas the bill banks bonuses were without condition.
Right.Yeah, no, we historically have some time between this, like, even usually these bonuses get announced closer to the end of this month.Milbank has now two years in a row gone relatively early.
We then will sit and wait for a while as the rest of the big law world stews about this is what we're expecting, right?
Yeah, I mean, that's certainly what happened last year.There was a three-week kind of waiting period between when Milbank announced and when Cravath announced.But remember, last year, there were also raises involved.
And Cravath actually wound up coming over the top for some of the mid-year and senior classes.So there was some negotiation, I guess, there, some thought about what they should do, et cetera.
But this year, the big splashy thing that Milbank did, which was the summer bonuses, has been cooking for months.This is something firms should absolutely know whether or not they're able to meet these summer bonus numbers by this point.
And in terms of the year-end bonus numbers as they match last year, which I think it's pretty predictable.
I would not be shocked if it was a little bit less of a lead time between this announcement and the rest of big law kind of getting on board with the Milbank scale, because I feel like these numbers were very predictable.
Yeah, well, we just got our Q3 numbers for the entire law firm industry just came out, and so we've seen that law is, as a general matter, making money hand over fist, not just, and you know, they have been doing this for several quarters in a row, but historically, the last few quarters, they've relied a bit on increasing rates, which, you know,
There's no reason to really blame them for that they were lagging behind the inflation rates anyway and had been for years but that said relying on rates to keep your financial numbers up is a little.
Unfortunate little not unfortunate what's the word i'm looking for a little artificial but here. This quarter, we see there was actually solid demand growth, lots of growth in a variety of practices, both counter-cyclical and normal.
We also see a growth in hiring, basically in every segment except the AMLA 50, and even they shrunk slower.So even they're getting an uptick, right?So everyone's got more money in hand, and everyone knows that, and that means that
If firms don't try to make good on what Milbank did over the summer, folks are going to notice.
or just to wait, just to wait.I've never been, I've never experienced phenomenologically being that much of a pocket watcher and that invested about people making that much more money than me.
I was like, come on, come on, they need this at Jones Day, you know?
Well, they're black box, they're not, that's a whole different thing.
Yeah, they're a whole different game anyway, but yes.You get the sentiment, you get the sentiment.Yes, but other firms, yeah.
It is interesting, kind of the follow-on, follow-along kind of mentality that exists in big law.
I think that especially for, you know, the top echelon, you know, you're kind of saying, you know, the difference between the AMLA 50 versus, you know, 51 to 100.And I think that's getting a little bit more segmented.
But if you want to be thought of as that top tier of big law firm, The middle bank numbers are the minimum you have to be offering, I think, at this point.
And whether or not you are able to as a firm, I don't know if that changes your self-identity in a way, and maybe that kind of is part of why there might be a little bit longer of a wait as firms realize what they can and cannot actually do.
Yeah, still very interesting.The bar has been set.We're going to see where people go from here.It'll be an exciting if you know phenomenologically draining three weeks that we're going to go through here probably.
And once again, I will just throw out a little reminder.Once you get your bonus announcement, dear listeners, please send it along to us.It's tips at above the law dot com.We keep all sources strictly anonymous.You can send a screenshot of the memo.
You can take a photo with your phone.You can just hit you could copy and paste whatever works for you.We are happy to see and know. It helps, I think, the overall industry kind of get momentum and to really build this bonus party.
McDermott, Will & Emery is one of Vault's top five best law firms to work for.Why?Because they're doing big law better.At McDermott, you define what your success looks like.They help you achieve it.
Within McDermott's collaborative, inclusive culture, you'll find partners who are invested in your success.
McDermott's award-winning professional development program and hands-on mentorship propel you toward your goals, while their industry-leading wellness benefits help you feel your best so you can do your best.
Want to see how your life could be better at McDermott?Head to mwe.com slash above the law. It's amazing how connected we can be online, but feel less connected at work.
Discover Metwork, the platform that connects lawyers and paralegals across the legal community.On Metwork, lawyers build specialized case teams, generate referral revenue, and gain a winning advantage.
Meet the collaborators, mentors, and teammates who will take your practice to the next level.Join Metwork for free and start making connections that matter.Visit metwork.com slash thinking.We've met, let's work. network.Okay, we are back.
What do we want to talk about next?
Well, we're talking about big law money, so.
Oh, interesting.So yeah, let's keep on that.
Let's get the sad face emoji ready, because I think that's true.
So as these associates, especially senior associates, are about to get a giant, giant bonus, some people are not quite in that position, and those people are partners.And you might say, why would we be sad about partners?
Oh, boo-hoo, poor partners making so much money.
But not everyone is an equity partner.In fact, at a lot of firms, there is increasingly non-equity partners, or income partners, people who get the title of partner but don't get paid that way, instead get paid basically like a senior associate.
Now, this has a bunch of problems with it that we've talked about in the past.It is an artificial way of making the firm look like they have made people partners.Sometimes people that they feel transparently make them look better as a to clients.
But even though they really haven't made those people partners.All of that said, it's always been a situation where we're decrying that these folks are being strung along.But it turns out it may be even worse than that.
Yeah, what what what's going on?I'll tell you, I always sort of just conceptualize it as the like extending the pathway of true partnership in a way that kind of felt a little misleading.But but how could it be worse than just that?
So it can be worse, and there's actually a wrinkle to this story beyond the story that we wrote last week.
Justin Henry from Bloomberg wrote up a piece doing a deep dive into how these non-equity partners get paid and what their financial situation is and spoke with a bunch of folks at firms that have this two-tiered partnership system.
and learned that at several of these firms, those non-equity partners aren't just a fancy title that means nothing.
The firms treat them as partners for all the costs associated with being a partner and just don't pay them for the parts of being a partner.In fact, some of them have K1s that are
structured to say they are an equity partner with 0% equity, and therefore they are on the hook for Social Security and Medicare taxes, their share of the health care without an employer contribution.
All of those things, and the paying in multiple, every jurisdiction that the firm has some degree of work in paying their share of the taxes on that on behalf of the partnership.This results, in some of these firms, in them paying so much
of the firm's costs that they end up making less than they did as senior associates.
It also means that the equity partners, by making these non-equity partners, have not split their share of the profits in any way, but have unloaded large swaths of their economic burdens to the tune of millions of dollars every year.
It is.And it's one that we have we've heard about.You know, we've never heard about that.And that's the wrinkle we're about to get to.But it's a thing that's been going on.
And some folks in Henry's piece, he found that some folks had had realized this problem and made some changes, in particular one firm.
McDermott had actually transitioned their non-equity partners to being W-2 employees again, recognizing that we can't have these non-equity partners treated this way.
So they're treated as more like senior associates than non-equity partners, which allows them to have the firm cover those costs rather than them doing it out of their own pocket.
There are some other firms that have made some changes by giving some bonuses and stuff like that to help cover and defray those costs.But many of the firms responded to Henry with no comment on this sort of stuff.
And I have heard, since putting this piece out, I've heard from other
Non-equity partners at other firms saying that this is how it operates at firms that he didn't even originally identify This is wild it is and that's largely how people took it But what Chris reminds us of is that in fact there was a canary in this mine while a lot of the journalists to world
heard about this for the first time over the last week or so, there was a story that Chris wrote back in August about a lawsuit that raised some of these allegations and should have put us all on notice that this could be happening.
So just to be clear, the canary was me.I told y'all.
I told people this was happening.Well, you and the ABA Journal.
And the plaintiff.And the plaintiff.
And the plaintiff, yes.But you said journalists.I just wanted to, I do that.Anyway, yes, people were talking about it.Well, the ABA Journal, yeah.The ABA Journal.Yeah, people were talking about it, yes.I was one of the people early.
Let me get my roses.Anyway. The point is actually worse than just the fact that these partners in name are being used, are basically subsidizing equity partners.The people that tend to get non-equity partnership are minorities.
So at these firms, I guess ipso facto might be the word, but whatever, the minority of people that have been working there for years are the ones subsidizing the partners.
And the story originally talked about it as being the non-equity partner relationship as a tax scheme, but it's also a discrimination scheme in that regard.
If you factor in the consequences of who are the people that are the ones who have to pay their own insurance, who don't get a cut of the business at all, and who just get the fancy title and their resume.
Yeah, and the person who did the lawsuit, she was suing Dwayne Morris, which is also one of the firms that Joe named in the piece that he wrote most recently.
Yeah, and I just didn't really put that in there, and I just kind of followed what his reporting had done.But yeah, no, and this is,
This is a key issue that Chris is identifying, and we've written about this for a while, that the non-equity partner tier, while it's not exclusively used for this, one of the more problematic tacks that it's taken is that his kind become a way in which firms move senior black lawyers in particular into this tier.
And they then are able to for clients, because there was a string now, obviously, as we enter a new Trump era, and the Supreme Court has already launched warfare against DEI programs.So maybe, maybe this was on the way out anyway.
But for a while there, we had a series of companies with ESG standards that would
mean the law department would take very seriously the idea that if they hire outside counsel, that outside counsel has to be making severe, you know, serious efforts toward diversity.
And among it was staffing, and originally it was staffing, but then they started finding a bunch of junior associates being used to fill that.
Window dressing, I believe one lawsuit said.
Yeah, one lawsuit called it window dressing, which is when a lot of these clients got more serious and said, we need to see actual partners with diverse backgrounds on here.
And that it seemed to correlate with the explosion of some of these non-equity tiers as these firms basically put folks they weren't willing to make equity partners, but wanted for the sake of
client relationships and put them in this tier, which was bad enough of a way to treat folks before we really got into, wait, they're also making them pay more money.
It's one thing to be a token, but for your token status to also cost you is nuts.
Yeah.Because, like, I'm sure there might have been some conversation where there was somebody saying, like, oh, you barely even earned equity partnering in their money.Like, I am paying for you.
Like, why are you questioning my value here when I am helping you save money?
Today's legal news is rarely as straightforward as the headlines that accompany them.On Lawyer to Lawyer, we provide the legal perspective you need to better understand the current events that shape our society.
Join me, Craig Williams, and a wide variety of industry experts as we break down the top stories.Follow Lawyer to Lawyer on the Legal Talk Network or wherever you subscribe to podcasts.
You like legal podcasts because you're curious and want to be the best attorney you can be.I'm Dave Scriven-Young, host of Litigation Radio, produced by ABA's Litigation section with Legal Talk Network.
Search in your favorite podcast player for Litigation Radio to join me and my guests as we examine hot topics in litigation and topics that will help you to develop your litigation skills and build your practice.
I hope you'll check out Litigation Radio and join the ABA Litigation section for access to all of the resources, relationships, and referrals you need to thrive as a litigator.
OK, and we're back.We're still on the big law partner world.Catherine, you had a story last week about a big law partner who terrible neighbor who got not not the best neighbor.
Yeah, we we got some tips about a Goodwin tax partner and his sort of dust up with neighbors.
There was a series of emails that Above the Law reviewed about just kind of normal neighbor stuff, noise in the apartment, somebody left a door, a fire door open and the alarm went off.
But in this building wide email, the Gowen partner, by the way, using his work email address,
used a slur for developmentally disabled people to refer to the tenants of one of his neighbor's apartments, used the slur and said that they must have been the people who left the fire alarm door open, which
isn't great is is real, real shitty thing to be.It's not not a way to make friends and neighbors and all that kind of stuff.But the thing that really got me is that, again, this was a building wide email.
The property manager promptly chastised the partner, but also sent photographic evidence that it was not, in fact,
That's the big part of it.It wasn't even these people.Yeah.
And after sort of being embarrassed like that, rather than, you know, apologize, like, you know, humans might just just in through more insults than call them insane people with stupid children.
So, you know, not really learning the lesson of being, you know, a kind hearted person at all.Just double down on the insults.
Yeah, I mean, look, so law firm partners are, you know, are there several of them are perfectly nice people, but they there is a population number three, a population above three of jerks.And that is that is not a huge surprise.
But carrying that over to home is a little problematic.
not just carrying over at home, carrying at home with your work email.
Yeah.Yeah.I mean, invest in Gmail, people.Yeah.
And so everyone in the building knows where you work and who to send these offensive emails to.
Is it a surprise that somebody in big law is mean? No.Is it a surprise that they use problematic language that we really ought to retire well before the year of our Lord 2024?Yeah.
But, you know, the combination of all those things and their business email all at the same time is really that kind of trifecta of arrogant stupidity that is really a hallmark mark of the above the law Hall of Fame.
If you're going to be a dick on the paper trail, at least be a dick from not a goodwinpartner at gmail.com.You know, like, I don't know, maybe.And this might be crazy.This might be wild considering our audience, but I don't know.Think like a lawyer.
Why would you want the paper trail? Don't be the smoking gun.Don't be the smoking gun is a good line.
That is a good line.But I almost understand it in an, you know, 15, 20 years ago when blackberries were new and shiny and only had your work email on it.And maybe you just felt like, oh, I want it kind of pushed immediately to my blackberries.
So I put all my important emails, like, you know, building emails are potentially important if there's a leak in the building or something like that.Right.So you get them immediately.
But we all have smartphones.You can have multiple email accounts pushed immediately to your phone.You don't have to clog up your business email with, you know, we're going to be cleaning the drapes on Friday.
Yeah, nor should you be.Yeah, that really is a poor form to even be getting them there.
Yeah, but there's also this bad email management.
Yeah, well, because it opens up, I'm sure this firm, this building is perfectly well run, but you've opened a new vector to phishing scams and all sorts of stuff by having your
You know, your firm, your firm email be where you receive all of this stuff.I mean, something gets spoofed, goes through the homeowner association email there and it gets clicked on.It can then mess with that whole mailbox like you don't want that.
You want to have these things sequestered like that.So yeah.
Yeah, I feel like there are several IT professionals absolutely cringing at several levels of this story.One would know, yeah.
I'm just waiting for the point where we get some partner and like in their sign off, it's like, my IP is...
All right.That's, I think, everything for this week.Thanks, everybody, for listening.We shall be back next time around.You should be subscribed to the show so you get new episodes when they come out.You should leave reviews, stars, write things.
It all helps get more people on board.You should be listening to Jabo, Catherine's other program.I'm also a guest on Legal Tech Week Journalist Roundtable.
We have a blog called Above the Law that you should be reading these and other stories that we write before we talk about them here.You can follow on social media.
Actually, I'm not sure, at this point, I think based on the last week, I think we need to reverse this.I'm Joe Patrice at Blue Sky.Because the Blue Sky explosion over the last like five days has been wild.
I've almost doubled my follower count and I have done literally nothing.I've done literally nothing over that time to get another like 900 followers. We will say I'm Joe Patrice over there.And I'm still Catherine One.You're Catherine Numeral One.
Chris, you're what over there?Rights for Rent.You're still Rights for Rent over there.I didn't know if people changed their things over there.Anyway.No, I felt like I had a good handle.I was like, this is hard.I'm going to use this.Nice.Love it.
We I don't think we have an above the law official account over there. I couldn't tell you.You should find out.Well, because at the time it was all gated because it was like you had to have invites.It's now not.I think that's the issue.But.
On the old school ex-Twitters, it's at ATL blog.Catherine and Chris have the same handles.My handle at Twitter is josephpatrice.But otherwise, there's all that.
And for any of you clever listeners, don't try to go make the ATL blue sky, because we already did it now.You get this days later.Okay, got it.Yep.Okay, great.
If you're a lawyer running a solo or small firm and you're looking for other lawyers to talk through issues you're currently facing in your practice, join the Unbillable Hours Community Roundtable, a free virtual event on the third Thursday of every month.
Lawyers from all over the country come together and meet with me, lawyer and law firm management consultant Christopher T. Anderson, to discuss best practices on topics such as marketing, client acquisition, hiring and firing, and time management.
The conversation is free to join, but requires a simple reservation.The link to RSVP can be found on the unbillable hour page at LegalTalkNetwork.com.We'll see you there.
Sign in
