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Money Talks Are associate salaries on the way up again in Texas? That has been the burning question ever since New York firm Simpson Thacher & Bartlett raised its associate salary scale. On Jan. 22, Simpson increased the starting base salary for first-year associates to $160,000, retroactive to Jan. 1, in a new pay scale that calls for a base salary of $290,000 for the firm’s most senior associates. A number of other New York firms quickly followed suit by raising their associate pay scales, including Weil, Gotshal & Manges and Skadden, Arps, Slate, Meagher & Flom. Both have operations in Texas. On Jan. 24, Weil, Gotshal adjusted its associate salary scale, matching Simpson’s first-year $160,000 base, and paying up to a $310,000 base to the most senior associates. The new scale � the old first-year base salary was $145,000 � applies to associates firmwide, says Dallas Weil, Gotshal partner Mary Korby, head of the firmwide compensation committee. In Texas, 101 of the firm’s 136 lawyers are associates. Skadden, which has 20 associates in Texas, also moved to the $160,000 first-year base salary, says John Ale, the partner in charge of Skadden’s office in Houston. Like at Weil, Gotshal, the new salary is retroactive to the beginning of the year, he says. “We run a top-tier firm, and we want our people to be appropriately compensated. Cleveland’s Jones Day, which has 250 lawyers in Texas, is in a “watch-and-wait mode firmwide,” says Nancy MacKimm, the partner in charge in Houston, noting that “it is generally our policy to be competitive.” But with the national market on the move, will any Texas firms follow the lead of national firms based in New York? In March 2006, Houston-based Vinson & Elkins became the first large Texas firm to raise associate salaries, increasing first-year base salaries in Texas to $135,000 after the national market moved. Most large Texas firms followed V&E’s lead. [See "Talent Competition," Texas Lawyer, Dec. 25, 2006, page 24.] Like Jones Day, V&E is watching and waiting to see where the market goes, says Joseph Dilg, the 751-lawyer firm’s managing partner, who notes that it has been only a few days since Simpson made its announcement. “We’re obviously going to remain competitive for the top legal talent. We are going to watch and see what happens,” he says. Philly Stake Houston’s Chamberlain, Hrdlicka, White, Williams & Martin will transform next month from a regionally recognized tax boutique to a national one when three partners and one associate leave the Philadelphia office of Washington, D.C.’s Miller & Chevalier to open a Philadelphia branch of Chamberlain, Hrdlicka. “We have always enjoyed a great reputation as a tax law firm regionally. With these additions, we will now be national,” Chamberlain, Hrdlicka managing shareholder Wayne Risoli says. Miller & Chevalier partners Herbert Odell, Philip Karter and Kevin Johnson will start as shareholders in Chamberlain, Hrdlicka on Feb. 1. Miller & Chevalier senior associate Jonathan Prokup will join Chamberlain, Hrdlicka’s Philadelphia office as a senior associate. Odell says he and the three other Miller & Chevalier lawyers joining Chamberlain, Hrdlicka “needed a different platform to work from” and Chamberlain, Hrdlicka � having established itself as a leader in the tax field � provides that platform. Odell began his legal career in the Tax Division of the U.S. Department of Justice where he worked with Chamberlain, Hrdlicka founding partner George A. Hrdlicka. The three departing partners joined Miller & Chevalier seven years ago, leaving a firm Odell founded known as Odell & Partners, Risoli says. “They were really good people, and we are sorry to lose them,” says Samuel M. Maruca, chairman of Miller & Chevalier’s executive committee, about the defections. He says the departing lawyers represent the bulk of the firm’s Philadelphia office, which will now operate with two or three lawyers. The Philadelphia branch is Miller & Chevalier’s only office outside D.C., he says, adding that the firm will concentrate on building its tax practice in the nation’s capital. Risoli says Chamberlain, Hrdlicka � which started in Houston in 1965 and also has an office in Atlanta � may open a fourth office by the beginning of the summer in Washington, D.C. He says Chamberlain, Hrdlicka is in negotiations with a group of prospective laterals from a Washington tax firm, but he declines to name it. Chamberlain, Hrdlicka has 64 lawyers in its Houston headquarters and 31 in Atlanta, in addition to the four in Philadelphia. K&S in Dubai King & Spalding, which has a 105-lawyer office in Houston, opened an office in Dubai, United Arab Emirates, last week. Philip Weems, head of the firm’s international energy practice, moved from Houston to Dubai to manage the office. Weems says 830-lawyer King & Spalding, which is based in Atlanta, needs to be in Dubai because of the firm’s busy Islamic finance and energy practices. “We’ve been very active in the Middle East for about 20 years, and, in fact, we are pioneers in the Islamic finance area,” he says. Weems, who worked in the Middle East and Asia for more than 10 years before moving to King & Spalding in Houston in 1999, will be joined in Dubai by three King & Spalding partners and by three associates who left Baker Botts’ Middle East operations. King & Spalding also hopes soon to establish an affiliation with a Saudi Arabian lawyer based in Riyadh, Weems says. In addition to Weems, the partners in the new King & Spalding office in Dubai include Jawad Ali, who will relocate from London, and Benjamin Newland, who will transfer from Atlanta. Partner Isam Salah, the leader of the firm’s Islamic finance and investment practice, will maintain offices in Dubai and New York, where he is currently located. The three new associates are Nabil Issa and Patrick Campos, who each worked in Riyadh and Dubai, and Wael Wahbed, who has worked in those two cities plus Abu Dhabi, United Arab Emirates. After the departures of the three associates, Houston-based Baker Botts has six lawyers in Dubai. Baker Botts partner Stuart Schaffer, the Houston-based head of the firm’s global projects group, says the firm is so busy in Dubai that two lawyers from others offices � a partner from London and an associate from Moscow � are temporarily working in the Middle East to help handle the workload. Schaffer says 738-lawyer Baker Botts, which opened its Dubai office in 2005, intends to add two to four partners to the Dubai office soon, including transfers from other offices and lateral hires. According to Weems, King & Spalding’s Islamic finance clients include Arcapita Bank B.S.C., The Securities House K.S.C.C., Kuwait Finance House, Gulf Investment House and Al-Muthanna Investment Co., and its energy clients with work in Dubai include Merrill Lynch Commodities. Weems says King & Spalding has room for as many as 17 lawyers in its new Dubai office, and the firm intends to fill more of that space during 2007.

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