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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."

TALENT TUG-OF-WAR -  In last week's Law.com Trendspotter, we posited that corporate legal departments' recent difficulty luring talent away from lucrative law firm posts might actually be a blessing because of its potential to rid the talent pool of those who misguidedly believe in-house gigs are less demanding. But there remains one major drawback that theory didn't account for: as Law.com's Phillip Bantz reports, these recruiting struggles are hampering efforts to improve in-house diversity. "We're trying to pull a lot of women and minorities out of law firms and bring them in-house. It's not an easy task," said John Gilmore, co-founder and managing partner of executive search firm BarkerGilmore. "These law firms are doing everything they can to hold onto people. The comp is high. The bonuses are high." So what might it take to entice top diverse talent to cross over from Big Law to in-house? Fat signing bonuses alone are unlikely to get it done, but remote work flexibility might prove to be the perfect sweetener. "I fully expect that many legal departments that were previously office based only will adopt flexible work arrangements, and I would not at all be surprised to see the ability to work remotely become a way to attract top talent," said Tiffany Meriweather, chief legal officer for Palo Alto, California-based startup Enjoy Technology Inc.

ENERGY INEFFICIENT? - Energy company EQT Corporation and its top officers were slapped with a shareholder lawsuit Tuesday in Pennsylvania Western District Court. The lawsuit, filed by Rolnick Kramer Sadighi on behalf of EQT stockholders, contends that EQT materially misrepresented facts in connection with its merger with Rice Energy, including the extent of its base cost savings value. Counsel have not yet appeared for the defendants. The case is 2:21-cv-00781, Scopia Windmill Fund LP et al. v. EQT Corporation et al. Stay up on the latest deals and litigation with the new Law.com Radar.  

EDITOR'S PICKS

WHILE YOU WERE SLEEPING

OVER IT OVERSEAS - Along with law firm staffers and clients, add U.K. and European law firm leaders to the list of folks who are less than impressed with astronomical associate pay in the U.S. As Law.com International's Varsha Patel reports, many firm heads watching the pay war from afar are skeptical that the money being shelled out is worth it. "That's more than we pay most of our salaried partners. When will clients object?" a U.K. top 25 firm managing partner asked. Meanwhile, several other U.K. and European partners pointed out that salary is no longer the key consideration for many associates. This is particularly true in parts of continental Europe. "I'm not sure it's completely consistent with evolution with the legal market," said a Paris-based private equity partner at an international law firm. "It seems that it will probably attract very talented lawyers, but the old-fashioned ones."

WHAT YOU SAID

"I cannot protest strongly enough, your honor. I am furious. The committee is going to have my head."