In response to our story profiling the Blake Dawson pay-rise-pay-freeze, which we thought was less about ‘focus’ and more about ‘f**k-us’, we received the following email:
The source who said no Blake Dawson staff received pay rises or bonuses is wrong. I received a pay rise so too did quite a number of my peers (although not to the usual scale). A number of other lawyer received bonuses in lieu of payrises. I dont know what all the fuss is about. BD treats its staff well and it was a sensible means to prevent further redundancies. I personally would prefer to sacrifice a pay rise to keep members of our team… and hey, it’s better than the big 4. They’ve been asked to take pay CUTS to save members of their team.
taking aim at Blakes partners
To the source, thank you. We appreciate your comments and enjoy feedback generally. We fear, however, that partner rhetoric about ‘focus’ may have prejudiced your views on remuneration and working conditions. We will therefore take you through the ‘fuss’, as we see it.
Firstly, 30% of your colleagues in fact received pay rises. That is, this 30% either received a pay rise in the traditional sense or a bonus in lieu thereof. But 70% missed out. We have already corrected the mistake we made earlier about the Blake Dawson pay freeze. You forgot to mention in your email that some 89 other people not only failed to receive a pay rise, but they lost their job at Blake Dawson.
At the same time these workers and ex-workers are suffering, the Blake Dawson partnership remained steady as the seventh largest law firm in Australasia and its revenue dropped by a paltry 2.6%. But whereas Blake Dawson is the seventh largest in terms of total number of lawyers, it is the fourth highest by revenue. DLA Phillips Fox, for example, has nearly 100 more lawyers than Blakes, but its revenue is over 30% lower.
What does this mean? Well, depending on overheads, fewer lawyers and higher revenue likely means more profit. Blake Dawson declined to spell out the precise profit to be shared amongst the partners this financial year (surpise, surpise!), but one thing seems clear; Blakes partners would have lost little, if any of the profits they enjoyed prior to the GFC. The massive reduction in employees and wage expenses would likely have ensured this. So when you say ‘I personally would prefer to sacrifice a pay rise to keep members of our team’, understand that your partners did not show you the same courtesy earlier this year. A 100% equity partner who earned, for example, $1,500,000 in the boom-times of 2007/2008, might have seen this profit might dip to, say, $1,300,000 (we have no idea of the correctness of these figures). With a partner still receiving such an awe-inspiring salary, could it ever be justifiable to freeze pay, much less sack workers, on the basis of this loss? The partner still earned in excess of $1,000,000!
Are you sure ‘BD treats its staff well’? Send the Firm Spy your news and views!
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Wow it is good to see the communist party is still running FirmSpy. In berating Blakes partners’ for earning 1million per year you clearly don’t factor in the risk these people take as partners. It is a huge responsibility and liability and the hours worked and various matters to juggle are a serious issue. By the way I am not one of the lucky ones on 1.5million, I am a junior in a top tier (not Blakes) earning a crappy 70k. But some of us are grateful to have jobs (even when still working long hours for no pay increase) and for the experience and training we get in the top tier. You clearly fail to understand the allure of partner income that keeps many juniors in places like Blakes. Love your website but it is obvious you have never set foot in a top tier firm and do not understand the mentality of staff members. Please keep your rants to your weekly socialist alliance meetings ok?
Junior, either your firm has a superbly good brainwashing programme or they just don’t hire very bright people.
The risk taken by partners is nominal – PI insurance, clients’ natural reluctance to sue law firms and the fact that the vast majority of partners don’t own anything in their own names makes sure of that. Further, as we’ve recently seen, partners don’t take on a whole lot of business risk either because while they’ve been happy to take the upside for years (at our expense), as soon as things get bad it’s the juniors who get shown the door.
As for hours worked and stress, sure partners work hard and take responsibility but don’t we as well? I work as hard or harder than anyone in my team but I do it for 90k per year while my partners make ten times that. They are undoubtedly better lawyers than me – and clients are paying for their experience, not mine – but the point remains that there are very few industries with such a leverage ratio.
And it is getting worse. Good experience is invaluable, and there will always be people stupid/avaricious enough to buy into the great pyramid scheme that is private practice (those people keep the wheels of law firm hierarchy greased), but law firms have been taking the piss for the last year. Perfect example – Did your charge out rate increase on 1 July? Has your level of responsibility increased over the last year? How about your salary? Almost invariably, the answers to those questions for most lawyers have been yes, yes and no, in that order. That means that partners have ratcheted up the margins again, under the guise of making sure “that we don’t have to make any [more] redundancies”. It’s becoming clear that while most firms haven’t taken much of a revenue hit, all of them have significantly decreased overheads. I’ll let you work out what that means.
I know that many, many top tier lawyers share Firm Spy’s sentiments and I wouldn’t be so quick to assume that everyone thinks as you do (or that Firm Spy hasn’t worked in a top tier environment).
I also don’t think that it’s a “communist” viewpoint to object to getting paid less than 15% of your billable target (the average margins for top tier lawyers, so I’m told).
What ‘Lawyer’ said, only with more “fu*k you” to the partner posing as “Junior”.
If you object to being “exploited”, Lawyer, just leave. No one is making you stay in this industry with its terrible leverage ratio. I assume by working at the firm you are at you are one of those stupid/avaricious types you so decry.
For Chrissakes, everyone knows that law firms are the classic Marxian model- the owners (partners) control the means of production and derive profit from exploiting the workers (lawyers)- ie, paying them less than they make from them.
It has ever been thus. And in every downturn, the owners look to maintain profit by downsizing staff and freezing pay- just like pretty much every other business out there.
It was not that long ago in the boom that lawyers were racking up 20-40% payrises year on year and seeking (oh yes) to be paid a bonus based on fees delivered. All for the upside we were- now things have turned we’re crying “not fair”.
Why don’t you just look at being a lawyer in a large firm as an extremely well paid job with pretty good benefits. Trade off- hard work.