Thursday, December 07, 2006

I left my spleen in San Francisco

With regard to my last post - I am over it. In the short, short time span of 24 hours, I decided I actually like it here. While I would never, ever, eeeever live here, it is a place I'd like to visit again while not being aggressively tour-guided by someone else's family. It is clean, pretty, and the scenery around the city is really worth writing home about. If only I could take all the San Franciscans out of the city and allow people like me to invade it.

Another subject, however, has been interesting me of late. It is bonus season, as I'm sure all firm lawyers are painfully aware, and yet no bonus announcement has been forthcoming. I have been wondering what they would do about bonuses ever since all you overpaid biglaw people got your $20,000 raise this year - okay, okay, raise in salary, I can practically hear the chorus correcting me from here. It will be determined whether this was a raise in salary or really a raise in actual compensation when they get around to announcing the bonuses, which should have happened already.

But in their infinite wisdom, the partners who make the deals that drive our economy seem to have forgotten basic game theory. I didn't major in political science, but I did take a couple intro classes and I always found game theory particularly interesting. This situation is a classic example of it. No one wants to make the first move and announce bonuses, and who can blame them? Sullivan, Skadden, Cravath, whoever - all the traditional first movers have been deafeningly silent this season. Whoever moves first will set the tone for the rest, which is true every year, but now the stakes are higher. Will first year attorneys really be compensated $180,000 before taxes? Does anybody actually think this is a good idea? Or will total compensation remain the same as it has been the past few years despite the increase in profits per partner at many major firms?

It's hilarious to me mainly because the motivation behind all this nonsense is their mistaken belief that these firms need to fight over law students since there are supposedly fewer law students now than there were before. This belief, of course, is total and complete bullshit and has been since the beginning. There are now and always will be competent attorneys willing to work for them regardless of whether the starting salary is $125,000 or $145,000 (or, dare I say it, way less). There are still plenty of law students, plenty of smart, capable law students, and the minute these snotbag firms stop restricting themselves to the top ten percent at top-tier schools, they will open their doors to much cheaper labor who will likely be able to do the high-level adminstrative work that first-year attorneys at these firms perform.

My prediction is that the bonuses will be the same as they were last year. Why? Again, game theory. All it takes is one law firm that had a particularly good year to place bonuses at that level and then everyone else will look cheap. It doesn't matter if it's the first firm to announce or the fourth. If it's the fourth, then the three firms that announced already will likely have to match. If only one firm goes through with the raise, then that one firm really will have the edge come recruitment season. Nobody wants that. So I think it will be the same.

Mind you, I'd be happy if someone gave me a bonus of $50. I am able to keep in mind that a bonus is just that - a bonus, something you are not necessarily entitled to - and that it is the season of gratitude. I'm grateful for the fact that these idiots have to keep paying through the nose in order to attract the biggest d-bags from my school; it gives me something to laugh at. They are reliably good at that.
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