September 2022 - Big Law Salaries?

[GoatDuck]

39 minutes ago, Bob Jones said:

it would be more beneficial to all if there was an opportunity to stay in indefinitely as a Sr. Associate or Counsel, with a reasonable base salary + commission/bonus model. That would help keep comp packages overall attractive, even when there may not be an opening for Partnership.

Would someone mind explaining why this isn’t an option? If you’re doing a good job as an associate but aren’t on track to become a partner, why not just keep you indefinitely? Unless doing good job as an associate=being on track to become a partner.

[BlockedQuebecois]

It is an option at essentially every major Canadian firm.

It's just not a very attractive option because if you're doing well at a Canadian firm, you're going to be on track for partnership. Getting off track generally means you work slightly fewer hours, but you earn significantly less money (in perpetuity). That's not an attractive proposition, particularly where you can go in-house and make similar amounts of money with significantly fewer hours. 

In contrast, doing well at an American firm does not mean you are on track for partnership. As a result, firms have created counsel roles in order to keep senior associates that are not good enough for partnership but that are worth keeping around. Those roles are attractive to people who don't want to leave private practice and are good at their jobs, but who aren't good enough to make partner (i.e., a class of people that barely exists in Canada). 

[JackoMcSnacko]

1 minute ago, BlockedQuebecois said:

It is an option at essentially every major Canadian firm.

Is it?  I haven't seen any normal course 15 year calls still as associate anywhere.  Anyone over 10 years usually has taken leave or has non-standard experience. 

Generally if someone is good enough to keep they are good enough to be elevated to service partner or counsel.  If the firm isn't sure about quality at that point, it's just a fixed cost that they don't need. 

Also optically, the title change helps with BD and client management. 

[WhoKnows]

1 hour ago, Bob Jones said:

It seems like it may be possible in Canada to get to 1st-3rd year Associates rates in the US

It's not "may". It's literally commonplace at any big firm in Canada for folks to be in this neighbourhood. Even at big firm offices not in Toronto. 

It's gonna take a bit of time to get there, but you also don't have a 2000 hour target here, either.

[Dinsdale]

34 minutes ago, GoatDuck said:

Would someone mind explaining why this isn’t an option? If you’re doing a good job as an associate but aren’t on track to become a partner, why not just keep you indefinitely? Unless doing good job as an associate=being on track to become a partner.

The difficulty from the firm's point of view is that the perpetual-associate person sucks up work that could go to other up-and-coming associates who are on-track, and has very little incentive to generate their own book, which is one of the key attributes of overall firm growth.  In effect, the senior person is "blocking" other associates from moving up the ranks.  Assuming that the supply of work is finite, of course.  If available work is infinite, then sure, keep all the good worker bees you want.

Edited November 30, 2023 by Dinsdale

[BlockedQuebecois]

6 minutes ago, JackoMcSnacko said:

Is it?  I haven't seen any normal course 15 year calls still as associate anywhere.  Anyone over 10 years usually has taken leave or has non-standard experience. 

Generally if someone is good enough to keep they are good enough to be elevated to service partner or counsel.  If the firm isn't sure about quality at that point, it's just a fixed cost that they don't need. 

Also optically, the title change helps with BD and client management. 

You've essentially just repeated what I said. 

The option exists. I suspect every major firm in Canada has an "of counsel" policy or similar at this point. But nobody takes it unless there are exceptional circumstances because the other two options - joining the partnership or going in-house - are infinitely more attractive. 

[JackoMcSnacko]

19 minutes ago, BlockedQuebecois said:

You've essentially just repeated what I said. 

The option exists. I suspect every major firm in Canada has an "of counsel" policy or similar at this point. But nobody takes it unless there are exceptional circumstances because the other two options - joining the partnership or going in-house - are infinitely more attractive. 

Except I didn't. 

Said in a different way:  I don't believe the option exists and it's not about the other options being more "attractive" to the individual.  If there was someone that wanted to stay associate at 11/12 years in I suspect no major firm would let them.

[WhoKnows]

33 minutes ago, JackoMcSnacko said:

Except I didn't. 

Said in a different way:  I don't believe the option exists and it's not about the other options being more "attractive" to the individual.  If there was someone that wanted to stay associate at 11/12 years in I suspect no major firm would let them.

The option certainly exists at some major firms, but as Blocked said, if you're going to be 11 or 12 years in, partnership is almost always going to be more attactive. Being an 11th or 12th year, with no book, working associates hours on partners' schedules, for less than partner pay isn't that attractive. And if you do have your own book or work sources, you're not giving up the advantages of partnership.

It's why so many "of counsel" types are very senior practitioners who want to work a few mandates a year and who the firm could never call and associate without it being embarassing. That's about the only time it's appealing. 

Edited November 30, 2023 by WhoKnows

[C_Terror]

1 hour ago, WhoKnows said:

It's not "may". It's literally commonplace at any big firm in Canada for folks to be in this neighbourhood. Even at big firm offices not in Toronto. 

It's gonna take a bit of time to get there, but you also don't have a 2000 hour target here, either.

3rd year associates in the US make over $400K CAD after full bonus (2000 hour target) and conversion. Unless you become a partner, it's not commonplace at any big firm in Canada to be seeing those numbers as an associate even after bonus. 

[Rashabon]

1 hour ago, JackoMcSnacko said:

Except I didn't. 

Said in a different way:  I don't believe the option exists and it's not about the other options being more "attractive" to the individual.  If there was someone that wanted to stay associate at 11/12 years in I suspect no major firm would let them.

There are plenty of "Counsel" at various firms:

https://www.osler.com/en/team/malcolm-aboud

https://www.blakes.com/people/find-a-person?fc=or||biopositiongroup||8

https://www.torys.com/en/people?&position=Counsel

[WhoKnows]

3 minutes ago, C_Terror said:

3rd year associates in the US make over $400K CAD after full bonus (2000 hour target) and conversion. Unless you become a partner, it's not commonplace at any big firm in Canada to be seeing those numbers as an associate even after bonus. 

I wasn't going with currency converted numbers. I was going straight 225k. It's not even a conversation otherwise. If the point was "no associate in Canada is making 400k/year" then...I mean, no shit? 

Edited November 30, 2023 by WhoKnows

[JackoMcSnacko]

12 minutes ago, Rashabon said:

There are plenty of "Counsel" at various firms:

https://www.osler.com/en/team/malcolm-aboud

https://www.blakes.com/people/find-a-person?fc=or||biopositiongroup||8

https://www.torys.com/en/people?&position=Counsel

Guess I misread the initial quote, thought it was just talking about associates and not counsel.

[Rashabon]

Well yes you don't keep people as associates into year 11/12 because it hurts both them and the firm. One of my go to mentorship lines about the differences between being an associate and a partner is that unless you're working with another lawyer in the know, an associate is always presumed to be relatively junior while a partner is presumed to be relatively senior. Non-lawyers don't regularly look up years of call so someone labelled an associate is perpetually going to be thought of as junior while even a junior partner will be thought of as more senior.

It's partly why Davies has their partnership after 4 years gimmick (maybe it's changed now), although that backfires for anyone in the know, because I assume every Davies partner is fake until I look them up and check for myself.

Edited November 30, 2023 by Rashabon

[Dinsdale]

4 hours ago, JackoMcSnacko said:

If there was someone that wanted to stay associate at 11/12 years in I suspect no major firm would let them.

It depends.  If the person has a very unique skillset / knowledge base that is very much in demand (specialized tax say, pensions maybe?) then a firm might be inclined to keep them as an "associate" (called counsel) indefinitely, even though they don't generate any book of their own.  For a garden variety corporate or litigation lawyer, I would suggest it is more up-or-out.  There are always more in the pipeline.

[Bob Jones]

7 hours ago, JackoMcSnacko said:

Except I didn't. 

Said in a different way:  I don't believe the option exists and it's not about the other options being more "attractive" to the individual.  If there was someone that wanted to stay associate at 11/12 years in I suspect no major firm would let them.

I’ve heard Gowlings used to have 16-17 year call Associates without issue. Unsure if that’s still the case. 

[Ohshmagoda]

One element not directly discussed above that I think is relevant to why you don’t see 12+ year associates - it’s often possible for senior associates without a path to partnership at their current firm to lateral into a situation where partnership is available (either soon or immediately). So while a firm might be willing to have someone stick around indefinitely as an associate, if they have any sense at all they’ll take the title/compensation bump offered elsewhere. There are also hurt feelings in being denied partnership, which contributes to the motivation to take an opportunity elsewhere.

[Rashabon]

2 hours ago, Ohshmagoda said:

One element not directly discussed above that I think is relevant to why you don’t see 12+ year associates - it’s often possible for senior associates without a path to partnership at their current firm to lateral into a situation where partnership is available (either soon or immediately). So while a firm might be willing to have someone stick around indefinitely as an associate, if they have any sense at all they’ll take the title/compensation bump offered elsewhere. There are also hurt feelings in being denied partnership, which contributes to the motivation to take an opportunity elsewhere.

This is true although there are also plenty of associates who either at the usual time (or ever) are just not prepared or ready to be partners at all, especially with partnership being more competitive in Canada, in which case the rise of the "Counsel" title allows them to stick around. But I do agree on the lateral point. I've seen very talented people whose business case is questioned at their current firm but are undeniably otherwise talented and who should be partners and sometimes they need a change of scenery to continue on the proper trajectory.

[Bob Jones]

23 hours ago, GoatDuck said:

Would someone mind explaining why this isn’t an option? If you’re doing a good job as an associate but aren’t on track to become a partner, why not just keep you indefinitely? Unless doing good job as an associate=being on track to become a partner.

Because “BigLaw” is more or less a pyramid scheme 

[BlockedQuebecois]

35 minutes ago, Bob Jones said:

Because “BigLaw” is more or less a pyramid scheme 

This is both largely incorrect in the Canadian context and also a terrible explanation, because if Canadian big law was a pyramid scheme they would love to have people who want to stay at the bottom of the pyramid. 

[Diplock]

12 minutes ago, BlockedQuebecois said:

This is both largely incorrect in the Canadian context and also a terrible explanation, because if Canadian big law was a pyramid scheme they would love to have people who want to stay at the bottom of the pyramid. 

I'll submit to correction it turns out I'm wrong, because I don't practice in a large firm environment myself, but I feel like it's more the answer to the question "why do you not find a lot of veterans in their mid-30's playing minor league hockey, baseball, etc.?" Now, there are exceptions to that general statement (see Bull Durham, etc.), just as there are in law firms. But there are tensions inherent in the dual purpose of the role that create a seemingly non-obvious result unless you understand what's going on. Given the purpose, standing, and objectives of a minor league team, there are so many pressures that drive out a player who isn't a real prospect for the majors anymore than they just don't tend to stick around.

If you just think about putting together a winning team, there are probably a lot of players in their 30's who aren't quite going to make the majors that should still, nevertheless, have a career in the minors. But they either decide they want to do better things, get quietly shifted out, or get outright released because their spot in the lineup is better used on a prospect who might be a major league player one day - even if today they aren't as good.

Maybe that's a bad analogy. But it's how I've always thought about it, anyway.

[Rashabon]

It's not a horrible analogy. An associate who sticks around forever but is incapable of making the jump to partnership could suck the air out of the room and prevent other associates who do have that possibility from gaining experience and working on files, etc. And all else being equal, every firm would prefer someone with more skills and a better business case than someone who isn't. That's just natural.

There are certain people who are so talented however at a particular niche that they stick around forever and a spot is made for them despite not being as well rounded, but that's few and far between and largely the people that don't make partner are not those people.

Returning to the idea that big law is a pyramid scheme, I think people should really look up phrases before using them. A pyramid scheme is one in which you get paid by recruiting people into the scheme who also pay. You could perhaps argue that equity partnership (rather than big law as a whole) is a pyramid scheme, except partners aren't making their big money off enrolling new people to contribute equity. They make money by generating actual revenue, something pyramid and MLM schemes don't actually do. If you wanted to argue it was a Ponzi scheme, because the house of cards collapses if everyone takes their money out at once, sure. But that's still not the right analogy, because again, existing partners aren't funding their returns using the money from new investors. They are funding it from generating revenue. In any event, smaller partnerships actually have way worse structural issues than big law.

A pyramidal structure isn't inherently a pyramid scheme and linking the two is just poor logical reasoning. The pyramidal structure of big law (and accounting and consulting and finance) are actually well oiled models. A senior partner contributes more value by overseeing multiple juniors than by doing the work themselves. Anyone who thinks otherwise is an idiot. Leverage is natural and it is inherent in most organizational structures because not all work is the same.

Edited December 1, 2023 by Rashabon

[Bob Jones]

6 hours ago, BlockedQuebecois said:

This is both largely incorrect in the Canadian context and also a terrible explanation, because if Canadian big law was a pyramid scheme they would love to have people who want to stay at the bottom of the pyramid. 

I’m being sarcastic here but there is something to it. High turn over among associates who produce the majority of work, with little room for advancement and to make the real dough is something. 

[BlockedQuebecois]

You’ve just described capitalism. 

Edited December 1, 2023 by BlockedQuebecois

[Diplock]

17 minutes ago, BlockedQuebecois said:

You’ve just described capitalism. 

Yeah. No one is quite calling foul yet, so my indignation is premature. But I always find it insufferable when law students and lawyers start complaining about being exploited by the realities of a capitalist free market. We are all, with almost no exceptions here, winners in this competitive marketplace. All we are debating now is how much we each win relative to one another. I have zero patience for anyone who was fine with the cut throat, winner gets ahead nature of our marketplace right up until the point they themself stopped winning. Now it's suddenly "unfair." Its not unfair that the guy delivering your food makes so much less than you do. Oh no. It's just unfair that some rain making partner is earning so much more. Because that's the real problem with inequality in society.

[Rashabon]

It's also silly. Law has low barrier of entry. Put up your shingle and compete. Associates "do" the work insofar as the "work" is pushing paper. It's also a fundamental misunderstanding of the "job" of law. A lot of associates don't get to do that work unless the partner is there to feed it to them. And if that associate doesn't need that partner to feed them work because they have their own - congrats, that's one of the surest ways to make partner.

The other interesting point is that in law, unlike in say a tech company, or construction, or a factory, the "managerial class" can actually do the work. It's just not as efficient or lucrative (for the whole enterprise). The CEO of a tech company isn't going to code (see Elon Musk for example where that idiot thinks he can) and so is dependent on his personnel. By and large the partners aren't relying on associates for their unique expertise. They are relying on them for efficiency of scale. The only work I delegate that I can't do myself is work to specialists in other areas. I don't delegate downwards work that I can't, in theory, do myself. But it's more efficient for someone else to do it. And if the associates think those partners should do more of their own actual work, congrats, now both parties lose.

Edited December 2, 2023 by Rashabon