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September 2022 - Big Law Salaries?


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Dinsdale
  • Lawyer

It's all about what you / your recruiter negotiates.  The optimal time to negotiate salary is when the new firm has decided they want you.   I would think generally, no, there is no missed-articling discount, at least once one gets to four years out or so, but that may not be a hard and fast rule that all firms adhere to.  

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theycancallyouhoju
  • Lawyer
On 4/1/2024 at 12:49 AM, Rashabon said:

I've usually only seen people knocked back a year if they took time off practice for a reason or if they are coming from the States and/or lateralling as a senior associate in their partnership year but are told they'll need to wait a year to apply.

That’s interesting. US firms don’t knock you down in pay in the senior lateral context, they just tell you the minimum time at the firm before you can be promoted is x years.

On the other hand, I’ve seen people held back a year because the firm felt they hadn’t progressed enough in skill level, but we’re busy enough we don’t want to fire them. 

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Rashabon
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On 5/1/2024 at 12:18 AM, theycancallyouhoju said:

That’s interesting. US firms don’t knock you down in pay in the senior lateral context, they just tell you the minimum time at the firm before you can be promoted is x years.

On the other hand, I’ve seen people held back a year because the firm felt they hadn’t progressed enough in skill level, but we’re busy enough we don’t want to fire them. 

It is typically more like you won't be eligible for partnership until X year rather than billing out at a lower rate or getting less comp. But there aren't a ton of super senior US laterals these days to begin with.

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carlill
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Posted (edited)

Agree with Rashabon. I know of one 7-Sister firm that requires senior lateral associates to do at least 2-years at the firm before they are considered for income partnership. That said, I also saw a couple of senior associates from overseas get hired at that firm as income partners from the outset, but that was the exception to the rule.

Edited by carlill
Wanted to make it clear I agreed with post immediately above mine.
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BlockedQuebecois
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Posted (edited)

Just because comparison is the thief of joy and people here love comparing Toronto to the global market: Quinn Emmanuel is boosting its London salaries for first years to £180,000 (CAD ~308,000). 

Not bad for kids six years out of high school! 

Edited by BlockedQuebecois
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helloall

Don't forget they give above market clerkship bonuses while Canadian firms give a grand total of 0 (zero) dollars!

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Lawstudents20202020
  • Lawyer

My boss was just telling a story about being involved on a file with lawyers from New York, London, and a few other countries.

There was more Canadian lawyers involved, had more experience and put in more hours, and they had the cheapest bill at the end of the day.

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C_Terror
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11 minutes ago, Lawstudents20202020 said:

My boss was just telling a story about being involved on a file with lawyers from New York, London, and a few other countries.

There was more Canadian lawyers involved, had more experience and put in more hours, and they had the cheapest bill at the end of the day.

Back when I was a first year, I was involved in a cross border PE deal (~$500M CAD) involving a Canadian target. Naturally, Canadian lawyers were working round the clock and advanced most of the paper + SPA. Easily two times the amount of Canadian lawyers vs US ones. Near Closing, funds flow showed our bill at $500K CAD, while our US counterpart's (a V20) bill was $3M CAD. Their second year's (aka Canadian first year) rate was more than what our M&A partner was billing. 

The going rate now for a mid level M&A attorney in NYC is something like $1200-$1400 USD an hour. Canadian firms just can't compete. Also as a side observation, it's interesting how large Canadian clients have no issue paying huge NYC rates for for US work but will haggle down Bay Street rates for substantially the same work, but in Canada.

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CB2021
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33 minutes ago, Lawstudents20202020 said:

My boss was just telling a story about being involved on a file with lawyers from New York, London, and a few other countries.

There was more Canadian lawyers involved, had more experience and put in more hours, and they had the cheapest bill at the end of the day.

Curious what the other countries were. You would think that Canadian rates would only be below rates in NY, London, and some other leading European markets. 

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CB2021
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23 minutes ago, C_Terror said:

Also as a side observation, it's interesting how large Canadian clients have no issue paying huge NYC rates for for US work but will haggle down Bay Street rates for substantially the same work, but in Canada.

I think this might be partially the result of the nature and size of the Canadian legal market (and economy). Just as the law schools down in the US, the firms there seem to be much more stratified as well. Blue chip or institutional clients seem to always give their most important (or even most of their) work to V10-20 firms (or firms that specialize in specific industries and sectors, e.g. Cooley, Fenwick, etc. for tech and life science). They rarely ventured out of those firms, except maybe during the deal boom a few years back where there was just so much work to go around and the lower ranked firms were able to offer lower rates for value. Based on what I have heard from my mentors down in NY, there since has been some flight to quality phenomenon going on, where big clients (and there are many many more of those in the US) are again only going to the top firms for their legal needs despite the recent rate hikes at the top firms. 

The sisters obviously also dominate the top end of the Canadian market, but because the top end of the market is SO MUCH SMALLER (in terms of deal size and deal volume) clients just have much more bargaining power here. While the upper MM and MM are bigger, the number of firms is also fairly large - so you have way too many players competing for a pie that does not seem to be getting larger, at least not at the rate that is comparable to that of the US market. Another implication of this, imo, is that Canadian lawyers and firms have fewer opportunities to specialize and differentiate themselves from their competitors. One notable exception to this is the Emerging and High Growth group at Osler - Chad Bayne and his team have built up the reputation and expertise that Osler can really say that they have differentiated themselves from the other sister firms in this segment of the market. 

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easttowest
  • Lawyer

We were the lead team on a major piece of litigation and took a call from US counsel who essentially just sat muted on calls sheepishly asking if we could please let them know when/what we would be invoicing since their bill had been higher than ours and they had to answer some uncomfortable questions. 

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C_Terror
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20 hours ago, CB2021 said:

I think this might be partially the result of the nature and size of the Canadian legal market (and economy). Just as the law schools down in the US, the firms there seem to be much more stratified as well. Blue chip or institutional clients seem to always give their most important (or even most of their) work to V10-20 firms (or firms that specialize in specific industries and sectors, e.g. Cooley, Fenwick, etc. for tech and life science). They rarely ventured out of those firms, except maybe during the deal boom a few years back where there was just so much work to go around and the lower ranked firms were able to offer lower rates for value. Based on what I have heard from my mentors down in NY, there since has been some flight to quality phenomenon going on, where big clients (and there are many many more of those in the US) are again only going to the top firms for their legal needs despite the recent rate hikes at the top firms. 

The sisters obviously also dominate the top end of the Canadian market, but because the top end of the market is SO MUCH SMALLER (in terms of deal size and deal volume) clients just have much more bargaining power here. While the upper MM and MM are bigger, the number of firms is also fairly large - so you have way too many players competing for a pie that does not seem to be getting larger, at least not at the rate that is comparable to that of the US market. Another implication of this, imo, is that Canadian lawyers and firms have fewer opportunities to specialize and differentiate themselves from their competitors. One notable exception to this is the Emerging and High Growth group at Osler - Chad Bayne and his team have built up the reputation and expertise that Osler can really say that they have differentiated themselves from the other sister firms in this segment of the market. 

I agree that as the market shrinks, more and more work is concentrated to the top firms, but this is true in Canada as well. The top end of the market here is small, but so are the number of firms, to be completely honest. Once you start looking at the top public deals and even announced PE Deals, it's more often than not the same handful of Bay St firms over and over again. Canadian firms have also raised their rates quite significantly over the last 4 years, but clients are still willing to pay for these firms. 

Either way, fact of the matter is that Canada is just too small of a market to command these kinds of premiums and it reflects onto the law firms. Add to the fact that the moat around each jurisdiction is so big, firms can get away with paying what they pay because there's no where for these associates to go. 

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easttowest
  • Lawyer

I mean they can leave. Salaries outside of private practice have become very competitive. I initially made more money by leaving. Although I won’t continue to enjoy the lockstep raises, I don’t think the money is enough to be a compelling reason to stay. 

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theycancallyouhoju
  • Lawyer
Posted (edited)
On 5/11/2024 at 4:16 AM, C_Terror said:

Back when I was a first year, I was involved in a cross border PE deal (~$500M CAD) involving a Canadian target. Naturally, Canadian lawyers were working round the clock and advanced most of the paper + SPA. Easily two times the amount of Canadian lawyers vs US ones. Near Closing, funds flow showed our bill at $500K CAD, while our US counterpart's (a V20) bill was $3M CAD. Their second year's (aka Canadian first year) rate was more than what our M&A partner was billing. 

The going rate now for a mid level M&A attorney in NYC is something like $1200-$1400 USD an hour. Canadian firms just can't compete. Also as a side observation, it's interesting how large Canadian clients have no issue paying huge NYC rates for for US work but will haggle down Bay Street rates for substantially the same work, but in Canada.

To be fair, most NY PE associates would tell you we’re pretty shocked by how many lawyers Bay firms (…some in particular…) staff on a deal. I still don’t really understand why as lead counsel I can do with 4 lawyers while Toronto as local counsel in one jurisdiction among a half dozen needs 8 or whatever. UK and Canadian firms both seem to staff up a lot heavier than elsewhere. 

Also, I’m kind of confused by your description here. If NY was acting as lead counsel, what exactly were they doing if not negotiating and handling the SPA? Local counsel usually just checks some boxes for local legal points - it’s not heavy lifting. 

Edited by theycancallyouhoju
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theycancallyouhoju
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Posted (edited)
On 5/11/2024 at 4:29 AM, CB2021 said:

Curious what the other countries were. You would think that Canadian rates would only be below rates in NY, London, and some other leading European markets. 

I’d have to double check some old bills, but I don’t think you’re getting substantially cheaper representation in Japan. In HK you’re probably working with a UK or US firm anyway. Singapore is cheaper than Canada, but not by a lot. Korean billable hour rates might be lower - would need to check - but they also have that secret sauce that somehow ends up driving a bill up every time with 8+ lawyers staffed where 4 competent ones would suffice. Mideast you might be working with a US firm. SA would always be cheaper than Canada. Cayman/BVI isn’t far off.

Edited by theycancallyouhoju
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C_Terror
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On 5/18/2024 at 12:28 PM, theycancallyouhoju said:

To be fair, most NY PE associates would tell you we’re pretty shocked by how many lawyers Bay firms (…some in particular…) staff on a deal. I still don’t really understand why as lead counsel I can do with 4 lawyers while Toronto as local counsel in one jurisdiction among a half dozen needs 8 or whatever. UK and Canadian firms both seem to staff up a lot heavier than elsewhere. 

Also, I’m kind of confused by your description here. If NY was acting as lead counsel, what exactly were they doing if not negotiating and handling the SPA? Local counsel usually just checks some boxes for local legal points - it’s not heavy lifting. 

That's true. I was at a firm notoriously known for staffing very leanly so I can't speak to that. 

Unfortunately I was a first year back then so I didn't have too much visibility on the SPA other than me turning comments and my firm advancing about 50-60% of the documents in the closing checklist. Knowing what I know now (which still isn't a lot), it's likely that NY did a lot of the heavy lifting in the initial drafts of the SPA and other transaction docs, with my firms' input.

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