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WHAT WE’RE WATCHING
WORTH IT? - Yesterday in this space we compared the high dollar cost of entering the associate pay wars with the potentially high talent cost of remaining on the sidelines. For firms whose profits remained flat last year, that choice is a tough one. But, as Law.com’s Dan Packel reports, for those elite firms that posted record profits amid the pandemic, upping associate salaries this year was pretty much a no-brainer. True, the latest round of pay bumps will mean an annual cost increase of over eight figures for many Am Law 200 firms. But the top firms were already prepared to absorb the expense and these pay raises—at least in the short term—will have less effect on profitability than the special bonuses announced by many earlier this year. These raises are also less expensive than the special bonuses in late 2020. Still, that’s not to say other potential costs might not be lurking in the shadows, including the morale of those who aren’t the beneficiaries of the latest round of payouts. As Law.com’s Patrick Smith reports, staff members at these firms aren’t exactly cheering right now. “I understand the economics and how much our lawyers bring in,” one staffer said. “They keep the firms alive and they should be paid properly. But my salary was cut last year. My bonus was cut. I didn’t get a COVID-19 bonus. You see a third-year associate getting a $30,000 bonus, it is a slap in the face to staff.”
