1 00:00:02,160 --> 00:00:05,800 Speaker 1: You're listening to the Bloomberg Law Podcast. Catch us weekdays 2 00:00:05,840 --> 00:00:09,680 Speaker 1: at ten pm Eastern on Bloomberg dot Com, the iHeartRadio app, 3 00:00:09,720 --> 00:00:12,639 Speaker 1: and the Bloomberg Business app, or listen on demand wherever 4 00:00:12,680 --> 00:00:15,120 Speaker 1: you get your podcasts. 5 00:00:16,040 --> 00:00:19,280 Speaker 2: Welcome to the Bloomberg Law Show. I'm Kimberly Robinson and 6 00:00:19,320 --> 00:00:22,160 Speaker 2: I'm Lydia Wheeler. We're filling in for June Grasso, who's 7 00:00:22,200 --> 00:00:24,760 Speaker 2: out this week ahead. In this hour, we'll talk about 8 00:00:24,800 --> 00:00:27,640 Speaker 2: the salary war that's heating up between major law firms, 9 00:00:27,720 --> 00:00:30,520 Speaker 2: many of whom have bumped up associate salaries to a 10 00:00:30,560 --> 00:00:33,519 Speaker 2: whopping two hundred and twenty five thousand dollars for the 11 00:00:33,560 --> 00:00:34,680 Speaker 2: most senior attorneys. 12 00:00:35,040 --> 00:00:38,160 Speaker 3: But first, in a contentious hearing, Senate Democrats last week 13 00:00:38,200 --> 00:00:41,640 Speaker 3: approved subpoenas for individuals at the heart of recent ethics 14 00:00:41,640 --> 00:00:44,880 Speaker 3: scandals involving Justices Clarence Thomas and Samuel Alito. 15 00:00:45,880 --> 00:00:49,480 Speaker 4: Now for the second time as my chairmanship, the Republicans 16 00:00:49,479 --> 00:00:51,920 Speaker 4: have invoked the to our rule, as they did on 17 00:00:52,000 --> 00:00:55,840 Speaker 4: the Veneta Gupta nomination, which means that we literally have 18 00:00:56,000 --> 00:00:57,480 Speaker 4: until twelve o'clock to complete it. 19 00:00:57,560 --> 00:01:00,320 Speaker 5: No, we have next week, and we have the week 20 00:01:00,360 --> 00:01:02,800 Speaker 5: after that, and we have the week after that. What 21 00:01:02,920 --> 00:01:05,280 Speaker 5: is the urgency here? Will give me a break. 22 00:01:05,480 --> 00:01:07,319 Speaker 1: You got to build on the floor. 23 00:01:09,760 --> 00:01:10,360 Speaker 5: Let me finish. 24 00:01:10,400 --> 00:01:13,959 Speaker 4: The chair has the floor. We will therefore proceed with 25 00:01:14,000 --> 00:01:16,480 Speaker 4: a vote on the chairs November second, twenty twenty three, 26 00:01:16,520 --> 00:01:19,880 Speaker 4: Motion to authorize subpoena relating to the Committee Supreme Court 27 00:01:19,880 --> 00:01:23,200 Speaker 4: Ethics investigation. The clerk will call the room. 28 00:01:23,200 --> 00:01:25,920 Speaker 2: That was Senate Judiciary Chairman Dick Durbin trying to get 29 00:01:25,959 --> 00:01:29,040 Speaker 2: a role call. The measure eventually passed along a party 30 00:01:29,080 --> 00:01:31,200 Speaker 2: line vote. Here to talk with us about that is 31 00:01:31,240 --> 00:01:34,800 Speaker 2: Bloomberg News. Emily Burnbound, Thanks so much for joining us, 32 00:01:34,959 --> 00:01:37,880 Speaker 2: Thanks so much for having me. All right, Emily, can 33 00:01:37,920 --> 00:01:42,360 Speaker 2: you remind listeners what prompted the Senate Committee's interest in 34 00:01:42,480 --> 00:01:43,520 Speaker 2: Supreme Court ethics. 35 00:01:44,600 --> 00:01:49,640 Speaker 6: There has been a string of really amazing revelatory reports 36 00:01:49,680 --> 00:01:54,840 Speaker 6: from Pro Publica and other news organizations about potential ethics 37 00:01:54,880 --> 00:01:58,800 Speaker 6: concerns at the Supreme Court. So that includes big GOP 38 00:01:59,040 --> 00:02:04,520 Speaker 6: donors taking Clarence Thomas and Samuel Alito on luxury trips. 39 00:02:05,320 --> 00:02:10,720 Speaker 6: That includes Harlan Crowe, a GOP donor, having a decades long, 40 00:02:10,919 --> 00:02:14,000 Speaker 6: very close relationship with Claris Thomas, in which he's taken 41 00:02:14,080 --> 00:02:17,400 Speaker 6: him around the world. So basically all of this has 42 00:02:17,440 --> 00:02:20,799 Speaker 6: brought up you know, what should the Supreme Court justices 43 00:02:20,880 --> 00:02:25,799 Speaker 6: have to disclose in their financial reports? What should they 44 00:02:25,919 --> 00:02:29,440 Speaker 6: not be doing? A lot of conflict of interest questions. 45 00:02:30,560 --> 00:02:35,360 Speaker 3: So who exactly is the Judiciary Committee trying to subpoena here? 46 00:02:35,760 --> 00:02:39,080 Speaker 3: And what information are Democrats seeking from these witnesses. 47 00:02:40,320 --> 00:02:44,000 Speaker 6: They are trying to figure out the breadth of the 48 00:02:44,200 --> 00:02:49,000 Speaker 6: gifts from Gop megadonor Harlan Crowe and Leonard Leo, a 49 00:02:49,160 --> 00:02:53,240 Speaker 6: former president of the Federal Society, So the gifts that 50 00:02:53,440 --> 00:02:57,880 Speaker 6: either Crow gave to the Supreme Court justices or that 51 00:02:58,000 --> 00:03:02,160 Speaker 6: Leo organized for them. They're looking for detailed accounting of transportation, 52 00:03:02,639 --> 00:03:06,519 Speaker 6: lodging gifts over the last couple of decades. 53 00:03:07,560 --> 00:03:10,560 Speaker 2: And so far, what has been the response from Crow 54 00:03:10,680 --> 00:03:11,360 Speaker 2: and from Leo? 55 00:03:12,400 --> 00:03:16,200 Speaker 6: Crow and Leo have both said the committee's investigation is 56 00:03:16,240 --> 00:03:18,840 Speaker 6: a political stunt, you know, it's part of the democrats 57 00:03:18,880 --> 00:03:21,960 Speaker 6: frustration with the right word direction of the Court under 58 00:03:22,000 --> 00:03:27,320 Speaker 6: the Conservative supermajority. So Crow's been a little bit more responsive. 59 00:03:27,480 --> 00:03:31,720 Speaker 6: He's offered five years worth of information. Democrats say that's 60 00:03:31,760 --> 00:03:35,560 Speaker 6: not enough. And Leo, on the other hand, says that 61 00:03:35,680 --> 00:03:38,880 Speaker 6: he just won't engage. He says it's a politicized vendetta. 62 00:03:40,160 --> 00:03:43,320 Speaker 3: Is anybody else the subject of the committee's attention and 63 00:03:43,400 --> 00:03:44,720 Speaker 3: if so, what do they have to say? 64 00:03:45,320 --> 00:03:48,120 Speaker 6: Yeah, they were also looking at Robin Arkley. So he's 65 00:03:48,160 --> 00:03:51,400 Speaker 6: a real estate businessman who owned the fishing lodge where 66 00:03:51,600 --> 00:03:54,760 Speaker 6: Justice Samuel Alito stayed in a trip that he didn't 67 00:03:54,760 --> 00:04:00,680 Speaker 6: disclose years ago. But the committee decided not to subpene Arcley. 68 00:04:00,800 --> 00:04:04,960 Speaker 6: They said that he had begun cooperating. This all comes 69 00:04:05,000 --> 00:04:08,600 Speaker 6: after this same committee tried to bring in Chief Justice 70 00:04:08,680 --> 00:04:12,240 Speaker 6: John Roberts to testify himself about some of these ethics scandals. 71 00:04:13,200 --> 00:04:16,520 Speaker 6: Roberts rebuffed them. They don't really have any authority to 72 00:04:16,560 --> 00:04:20,159 Speaker 6: bring in Supreme Court justices. So they have turned their 73 00:04:20,200 --> 00:04:25,480 Speaker 6: attention to these big GOP donors and fundraisers behind the justices. 74 00:04:26,320 --> 00:04:29,760 Speaker 2: And so, Emily, what is it that, you know, members 75 00:04:29,800 --> 00:04:32,560 Speaker 2: of the Senate hope to do with this information? They've 76 00:04:32,600 --> 00:04:35,599 Speaker 2: given any indication about, you know, sort of what the 77 00:04:35,640 --> 00:04:36,520 Speaker 2: long game is here. 78 00:04:37,040 --> 00:04:42,000 Speaker 6: Yeah, they say it's part of an investigation to inform legislation. 79 00:04:42,240 --> 00:04:45,839 Speaker 6: So they do have a Supreme Court Ethics Code legislation 80 00:04:46,000 --> 00:04:47,760 Speaker 6: that they passed out of the committee but haven't brought 81 00:04:47,800 --> 00:04:52,760 Speaker 6: to the floor. But they say they need to see 82 00:04:52,800 --> 00:04:56,000 Speaker 6: the full extent of the problem before they can come 83 00:04:56,080 --> 00:04:59,479 Speaker 6: up with a proper solution. So I think it's about 84 00:05:00,080 --> 00:05:03,360 Speaker 6: really figuring out if there are more trips that haven't 85 00:05:03,400 --> 00:05:06,720 Speaker 6: been disclosed, more gifts that haven't been disclosed, and why 86 00:05:06,839 --> 00:05:10,640 Speaker 6: or why not. So it's part of this broader probe. 87 00:05:10,800 --> 00:05:14,919 Speaker 6: But there's a constitutional question around all of this, which 88 00:05:14,960 --> 00:05:18,680 Speaker 6: is does Congress have the authority to even write legislation 89 00:05:19,200 --> 00:05:23,279 Speaker 6: that applies to the Supreme Court? And that is the 90 00:05:23,360 --> 00:05:24,760 Speaker 6: elephant in the room through this whole thing. 91 00:05:25,960 --> 00:05:28,120 Speaker 3: Now we know, we got a reaction from Harlan Crow 92 00:05:28,200 --> 00:05:30,520 Speaker 3: and Leonard Leo, you know, calling this a political stunt. 93 00:05:30,800 --> 00:05:34,240 Speaker 3: But are they actually going to comply with the subpoenas? 94 00:05:34,279 --> 00:05:35,280 Speaker 3: Do they intend to do? 95 00:05:35,320 --> 00:05:38,839 Speaker 6: You think so far they're saying that they don't intend to. 96 00:05:39,040 --> 00:05:43,240 Speaker 6: Crow's office has been a little bit more mild, so 97 00:05:43,440 --> 00:05:46,040 Speaker 6: he said he's ready to keep engaging with the committee 98 00:05:46,040 --> 00:05:49,720 Speaker 6: in good faith, but he described the subpoena as invalid. 99 00:05:50,040 --> 00:05:53,680 Speaker 6: Leonard Leo also said the subpoena is invalid. So both 100 00:05:53,720 --> 00:05:59,039 Speaker 6: of them have set themselves up as antagonistic to these subpoenas. 101 00:05:59,120 --> 00:06:01,880 Speaker 6: So we're getting in to really complicated area. 102 00:06:02,320 --> 00:06:04,240 Speaker 2: Emily, I do want to get into sort of that 103 00:06:04,279 --> 00:06:08,320 Speaker 2: whole complicated procedure that could happen next. But just wondering 104 00:06:09,080 --> 00:06:11,680 Speaker 2: why it is that Crow and Leo are saying that 105 00:06:11,720 --> 00:06:15,039 Speaker 2: these are invalid. I mean, what about the processes have 106 00:06:15,240 --> 00:06:17,000 Speaker 2: them claiming that it's invalid. 107 00:06:17,800 --> 00:06:22,520 Speaker 6: So Leo especially has been claiming it's invalid from the 108 00:06:22,560 --> 00:06:25,599 Speaker 6: start because of some of those constitutional questions. They say, 109 00:06:25,960 --> 00:06:30,640 Speaker 6: the legislative agenda here is not worth pursuing and therefore 110 00:06:31,279 --> 00:06:34,440 Speaker 6: anything that they do as part of the investigation might 111 00:06:34,720 --> 00:06:37,960 Speaker 6: be unconstitutional. So that's been what he said from the beginning. 112 00:06:38,040 --> 00:06:42,480 Speaker 6: But now there are these procedural issues that we heard 113 00:06:42,680 --> 00:06:46,919 Speaker 6: about at the beginning of the episode. We heard that clip. 114 00:06:47,960 --> 00:06:52,279 Speaker 6: There are rules on the committee that you need a 115 00:06:52,279 --> 00:06:58,800 Speaker 6: certain number of minority senator members present when you take 116 00:06:59,000 --> 00:07:01,720 Speaker 6: a vote and when you can do business. All of 117 00:07:01,760 --> 00:07:05,240 Speaker 6: the Republicans left the room before these subpoenas were authorized. 118 00:07:05,440 --> 00:07:09,880 Speaker 6: So that's a little bit in the weeds about congressional procedure, 119 00:07:09,880 --> 00:07:13,360 Speaker 6: but it actually could really matter in terms of whether 120 00:07:13,400 --> 00:07:14,840 Speaker 6: these subpoenas are enforceable. 121 00:07:16,360 --> 00:07:18,880 Speaker 3: So what happens here if Harlan Crowe and Leonard Leo 122 00:07:19,120 --> 00:07:22,040 Speaker 3: defy the subpoenas, Is this a matter that could make 123 00:07:22,080 --> 00:07:24,080 Speaker 3: its way all the way to the Supreme Court? 124 00:07:24,880 --> 00:07:31,360 Speaker 6: It definitely could playing out the hypothetical lawmakers could certify 125 00:07:31,680 --> 00:07:35,680 Speaker 6: a contempt citation for Leo or Crow for criminal prosecution 126 00:07:36,400 --> 00:07:39,280 Speaker 6: for defying the subpoena. Or they could turn to the courts, 127 00:07:39,920 --> 00:07:42,280 Speaker 6: take a civil route, try to enforce a subpoena by 128 00:07:42,360 --> 00:07:47,360 Speaker 6: seeking a civil judgment declaring the recipient of the subpoena 129 00:07:47,360 --> 00:07:51,560 Speaker 6: has to comply, and through the appeals process, those could 130 00:07:51,720 --> 00:07:55,400 Speaker 6: arrive before the Supreme Court, and that would get really 131 00:07:55,640 --> 00:08:00,880 Speaker 6: complex because it is about an investigation into the Supreme Court. 132 00:08:01,000 --> 00:08:04,560 Speaker 6: So then I think that poses refusal questions that the 133 00:08:04,720 --> 00:08:09,800 Speaker 6: justice haven't necessarily had to face before. But they do 134 00:08:10,080 --> 00:08:14,239 Speaker 6: first need sixty votes on the Senate floor to push 135 00:08:14,320 --> 00:08:17,840 Speaker 6: forward the subpoenas, and they don't seem to have that 136 00:08:18,000 --> 00:08:21,720 Speaker 6: right now, given Republicans hold forty nine seats in the Senate. 137 00:08:21,920 --> 00:08:25,600 Speaker 6: So that's their first most important hurdle. 138 00:08:27,720 --> 00:08:29,720 Speaker 2: You know, while all this has sort of been playing 139 00:08:29,720 --> 00:08:33,160 Speaker 2: out in the Senate, we have seen the justices release 140 00:08:33,200 --> 00:08:36,600 Speaker 2: their own Ethics Code. Did that change the game at 141 00:08:36,600 --> 00:08:40,400 Speaker 2: all for Senate Democrats And they're calculus on these subpoenas. 142 00:08:40,800 --> 00:08:43,559 Speaker 6: It doesn't seem like it has. They postponed the vote 143 00:08:43,800 --> 00:08:45,960 Speaker 6: just a couple of days after the Supreme Court put 144 00:08:46,000 --> 00:08:48,640 Speaker 6: out their ethics Code. They said, oh, we need to 145 00:08:48,640 --> 00:08:51,280 Speaker 6: take some time to dig into this. But ultimately, what 146 00:08:51,320 --> 00:08:57,040 Speaker 6: they're looking for is an enforcement mechanism for ethics standards. 147 00:08:57,200 --> 00:09:00,360 Speaker 6: So the Ethics Code that the Supreme Court put out 148 00:09:00,880 --> 00:09:05,440 Speaker 6: codified standards that they said they already abide by. But 149 00:09:05,880 --> 00:09:10,319 Speaker 6: activists and Democratic lawmakers have said, well, you need oversight. 150 00:09:10,400 --> 00:09:12,240 Speaker 6: If you're going to have a set of rules, you 151 00:09:12,320 --> 00:09:15,200 Speaker 6: have to face repercussions if you don't follow those rules. 152 00:09:15,200 --> 00:09:18,559 Speaker 6: You have to have someone overseeing whether you are following 153 00:09:19,400 --> 00:09:22,480 Speaker 6: the standards you set for yourself. So it's about enforcement 154 00:09:22,600 --> 00:09:26,200 Speaker 6: at this point. So that's where Congress could step in. 155 00:09:26,920 --> 00:09:28,960 Speaker 2: Well, coming up on the program, we'll get more on 156 00:09:29,040 --> 00:09:33,000 Speaker 2: the Senate Supreme Court ethics subpoenas with Emily Burnbound. Remember 157 00:09:33,080 --> 00:09:35,320 Speaker 2: you can always get the latest legal news by listening 158 00:09:35,320 --> 00:09:39,840 Speaker 2: to our Bloomberg Law podcast on Apple, Spotify, or wherever 159 00:09:39,880 --> 00:09:42,880 Speaker 2: you get your podcasts. I'm Kimerly Robinson. 160 00:09:42,640 --> 00:09:45,040 Speaker 3: And I'm Lydio Wheeler. This is Bloomberg. 161 00:09:51,920 --> 00:09:55,360 Speaker 1: You're listening to the Bloomberg Law Podcast. Catch the program 162 00:09:55,400 --> 00:09:59,120 Speaker 1: weekdays at ten pm Eastern on Bloomberg Radio, tune in app, 163 00:09:59,160 --> 00:10:02,040 Speaker 1: Bloomberg dot Com, and the Bloomberg Business App. You can 164 00:10:02,080 --> 00:10:05,320 Speaker 1: also listen live on Amazon Alexa from our flagship New 165 00:10:05,360 --> 00:10:09,000 Speaker 1: York station. Just say Alexa play Bloomberg eleven thirty. 166 00:10:10,920 --> 00:10:14,520 Speaker 2: I'm Kimberly Robinson and I'm Lydio Wheeler in for June Grassom. 167 00:10:15,640 --> 00:10:20,240 Speaker 5: I don't buy anything. You just said. This should be real, blunt, indirect. 168 00:10:20,360 --> 00:10:24,440 Speaker 5: This is a garbage. If you really thought this was 169 00:10:24,480 --> 00:10:28,559 Speaker 5: a problem, why don't you bring up the Supreme Court 170 00:10:28,679 --> 00:10:33,640 Speaker 5: Ethics Refusal and Transparency Act that was past September the fifth, 171 00:10:33,920 --> 00:10:37,760 Speaker 5: twenty twenty three in this committee to fix the problem 172 00:10:37,920 --> 00:10:40,520 Speaker 5: you just talked about. This bill is never going to 173 00:10:40,600 --> 00:10:43,040 Speaker 5: see the light of the day. Go to Senator Schumer 174 00:10:43,080 --> 00:10:47,520 Speaker 5: and tell him this is urgent. The country's going to 175 00:10:47,559 --> 00:10:50,840 Speaker 5: collapse if we don't fix this problem. Why hasn't the 176 00:10:50,880 --> 00:10:54,280 Speaker 5: Majority leader brought up the bill that all of y'all 177 00:10:54,320 --> 00:10:57,319 Speaker 5: voted for to fix this problem? It's never going to 178 00:10:57,400 --> 00:11:00,240 Speaker 5: be brought up the subpoenas are never going to see 179 00:11:00,280 --> 00:11:02,800 Speaker 5: the law of the day. I don't know who's driving 180 00:11:02,800 --> 00:11:05,440 Speaker 5: the train on your side, but you're driving the committee 181 00:11:05,480 --> 00:11:06,439 Speaker 5: off into a ditch. 182 00:11:07,400 --> 00:11:10,720 Speaker 2: Some hartswort's there from South Carolina Senator Lindsay Graham about 183 00:11:10,880 --> 00:11:14,840 Speaker 2: democrats approach to Supreme Court ethics. We've been speaking with 184 00:11:14,840 --> 00:11:18,959 Speaker 2: Bloomberg News. Is Emily burnbound about the newly approved subpoenas. Emily, 185 00:11:19,120 --> 00:11:22,440 Speaker 2: why are Republicans so mad about what's happening here? 186 00:11:23,120 --> 00:11:27,600 Speaker 6: First, they say this is a politicized move against private citizens. 187 00:11:27,640 --> 00:11:30,280 Speaker 6: They say Democrats are just really mad about recent Supreme 188 00:11:30,280 --> 00:11:33,840 Speaker 6: Court decisions such as overturning the federal rate to an abortion. 189 00:11:34,320 --> 00:11:36,760 Speaker 6: They say it's not about ethics or disclosures at all. 190 00:11:37,080 --> 00:11:39,480 Speaker 6: They say it's especially an effort to harm the reputation 191 00:11:39,520 --> 00:11:42,960 Speaker 6: of Clarence Thomas, one of the more conservative members of SCOTUS. 192 00:11:43,360 --> 00:11:46,040 Speaker 6: But second, there is the issue of how important Leo 193 00:11:46,160 --> 00:11:50,480 Speaker 6: and Crow are to the GOP. So according to one 194 00:11:50,559 --> 00:11:53,720 Speaker 6: count from an advocacy group, the Senate Republicans on the 195 00:11:53,720 --> 00:11:59,240 Speaker 6: committee alone received over four hundred and fifty thousand dollars 196 00:11:59,240 --> 00:12:02,120 Speaker 6: in donations from Crow over the years, and Leo two 197 00:12:02,120 --> 00:12:05,000 Speaker 6: has been such a leader in fundraising shaping the conservative 198 00:12:05,040 --> 00:12:08,439 Speaker 6: legal movement. They owe a lot of the party's recent 199 00:12:08,480 --> 00:12:11,400 Speaker 6: wins to him, so there's also an element of loyalty. 200 00:12:11,600 --> 00:12:15,120 Speaker 6: Ted Cruz called both of them patriots. At the markup. 201 00:12:15,920 --> 00:12:18,880 Speaker 3: Now, Senate Judiciary Chair Dick Durbin had to use a 202 00:12:18,880 --> 00:12:23,880 Speaker 3: surprise procedural move to authorize these subpoenas you mentioned before that, 203 00:12:23,960 --> 00:12:26,280 Speaker 3: you know, during the committee that's been pretty contentious. You know, 204 00:12:26,320 --> 00:12:28,880 Speaker 3: Republicans walked out of the room. Can you describe what 205 00:12:28,920 --> 00:12:32,040 Speaker 3: that process looked like. You know, it hasn't been pretty, right. 206 00:12:32,720 --> 00:12:34,960 Speaker 6: It definitely hasn't been pretty and it was hard to 207 00:12:35,080 --> 00:12:40,400 Speaker 6: follow even as it was happening. But basically, Republicans filed 208 00:12:40,440 --> 00:12:43,320 Speaker 6: one hundred and seventy seven amendments to the subpoenas, so 209 00:12:43,400 --> 00:12:45,840 Speaker 6: that was an effort to gum up the works. And 210 00:12:45,920 --> 00:12:49,959 Speaker 6: then at the beginning of the markup, they invoked something 211 00:12:50,000 --> 00:12:53,080 Speaker 6: called the two hour rule, which people don't really use 212 00:12:53,200 --> 00:12:55,800 Speaker 6: a lot in the Senate, but it means what it 213 00:12:55,800 --> 00:12:58,000 Speaker 6: sounds like that the meeting could only last two hours. 214 00:12:58,040 --> 00:13:03,040 Speaker 6: So that was another effort to delay authorizing the subpoenas. 215 00:13:03,160 --> 00:13:07,160 Speaker 6: You know, you heard Graham earlier saying we can do 216 00:13:07,200 --> 00:13:09,440 Speaker 6: this every single week. We'll just keep doing this every 217 00:13:09,480 --> 00:13:13,560 Speaker 6: Thursday forever. But Durbin put his foot down. At the 218 00:13:13,720 --> 00:13:16,160 Speaker 6: very end of the two hours. He just called a 219 00:13:16,240 --> 00:13:18,880 Speaker 6: vote on the subpoenas they hadn't voted on any of 220 00:13:18,920 --> 00:13:25,120 Speaker 6: the Republican amendments. Republicans had been delaying and delaying, talking 221 00:13:25,120 --> 00:13:28,959 Speaker 6: about other things, making statements that they've made before about 222 00:13:28,960 --> 00:13:31,959 Speaker 6: all of this, and as Durbin was starting to call 223 00:13:32,160 --> 00:13:35,120 Speaker 6: the vote, Republicans quickly got up and like ran out 224 00:13:35,160 --> 00:13:38,200 Speaker 6: of the room in order to deny Democrats the necessary 225 00:13:38,280 --> 00:13:42,400 Speaker 6: number of minority senators present. So now, of course Republicans 226 00:13:42,440 --> 00:13:44,640 Speaker 6: are saying, well, that wasn't even valid. You didn't have 227 00:13:44,760 --> 00:13:47,880 Speaker 6: a quorum. They also say that the actual vote took 228 00:13:47,920 --> 00:13:52,600 Speaker 6: place two minutes after the two hour rule was up, 229 00:13:52,640 --> 00:13:57,160 Speaker 6: so it was like twelve h two, So it's all 230 00:13:57,440 --> 00:13:59,920 Speaker 6: really dicey. Durbin said something funny though, he said, you know, 231 00:14:00,040 --> 00:14:01,960 Speaker 6: if I were in their position, I'd also be saying that. 232 00:14:02,040 --> 00:14:05,360 Speaker 6: But he says the vote was completely legitimate. 233 00:14:06,040 --> 00:14:09,880 Speaker 2: And how did those those differing versions of how this 234 00:14:09,920 --> 00:14:12,160 Speaker 2: all played out? How does that get worked out? 235 00:14:13,040 --> 00:14:15,600 Speaker 6: I think that there's a lot of conversations happening behind 236 00:14:15,720 --> 00:14:18,280 Speaker 6: the scenes right now. I think that the committee is 237 00:14:18,320 --> 00:14:20,600 Speaker 6: going to need to talk about this again in a 238 00:14:20,880 --> 00:14:25,640 Speaker 6: public setting because if really there is a procedural issue 239 00:14:25,640 --> 00:14:30,240 Speaker 6: with these subpoenas, there's not a point to authorizing them 240 00:14:30,280 --> 00:14:33,640 Speaker 6: because then they could just get beat really quickly in court. 241 00:14:34,520 --> 00:14:37,080 Speaker 6: So I actually think we just don't really know what 242 00:14:37,200 --> 00:14:38,640 Speaker 6: comes next just yet. 243 00:14:39,120 --> 00:14:42,200 Speaker 3: Now. We heard some of the criticism from Senator Lindsey Graham, 244 00:14:42,400 --> 00:14:45,440 Speaker 3: but what about the response from other Senate Republicans. I mean, 245 00:14:45,480 --> 00:14:46,920 Speaker 3: are they all on the same page here? 246 00:14:47,560 --> 00:14:52,400 Speaker 6: They do seem really united on this. So Senator Cornyn 247 00:14:52,880 --> 00:14:57,040 Speaker 6: at a certain point during the markups said that Durban 248 00:14:57,320 --> 00:15:01,040 Speaker 6: was destroying the Senate Judiciary Committee. He said, congrats, you've 249 00:15:01,080 --> 00:15:04,440 Speaker 6: destroyed all this good will that we've built up because 250 00:15:04,480 --> 00:15:07,960 Speaker 6: there is a history of bipartisanship on the Judiciary Committee, 251 00:15:08,720 --> 00:15:13,680 Speaker 6: specifically in the Senate at least. And yeah, there there 252 00:15:13,840 --> 00:15:17,600 Speaker 6: was a lot of complaints from Senator Tom Cotton, from 253 00:15:17,800 --> 00:15:22,040 Speaker 6: Marshall Blackburn. They all got up at the same time 254 00:15:22,120 --> 00:15:24,120 Speaker 6: and walked out of the room. So I really think 255 00:15:24,160 --> 00:15:27,080 Speaker 6: that they have made it clear they're willing to go 256 00:15:27,240 --> 00:15:29,880 Speaker 6: to bat against the subpoenas and expend a lot of 257 00:15:29,920 --> 00:15:32,400 Speaker 6: political capital fighting them. 258 00:15:33,120 --> 00:15:35,960 Speaker 2: So you sort of described what happened to the at 259 00:15:36,000 --> 00:15:39,160 Speaker 2: the end of the hearing, you know, as Republicans all 260 00:15:39,240 --> 00:15:42,120 Speaker 2: sort of got up. Was it a surprise to them 261 00:15:42,400 --> 00:15:45,280 Speaker 2: that Senator Dermot was just gonna go ahead and move 262 00:15:45,320 --> 00:15:48,000 Speaker 2: forward with the vote? Was that something that they weren't expecting? 263 00:15:48,200 --> 00:15:49,480 Speaker 2: Was it something you were expecting. 264 00:15:49,800 --> 00:15:52,840 Speaker 6: No, I wasn't expecting it. Other reporters in the room 265 00:15:52,880 --> 00:15:57,000 Speaker 6: weren't expecting it, and I don't think Republicans were either. 266 00:15:57,880 --> 00:16:02,440 Speaker 6: They clearly knew what to do when it started. I 267 00:16:02,480 --> 00:16:04,400 Speaker 6: think that they know the rules of their own committee 268 00:16:04,400 --> 00:16:07,600 Speaker 6: really well. But I think it was actually a surprise, 269 00:16:07,640 --> 00:16:08,840 Speaker 6: which is hard to pull off. 270 00:16:09,920 --> 00:16:14,080 Speaker 3: Yeah, definitely in Congress. So what happens now? What should 271 00:16:14,080 --> 00:16:15,200 Speaker 3: we expect from the Senate? 272 00:16:16,280 --> 00:16:19,360 Speaker 6: So still a little unclear. They need the sixty votes 273 00:16:19,440 --> 00:16:24,280 Speaker 6: to formally approve the subpoenas, so that is a huge hurdle, 274 00:16:25,760 --> 00:16:30,440 Speaker 6: and they will probably have to maybe even vote again 275 00:16:30,720 --> 00:16:34,160 Speaker 6: if they decide that this quorum issue is real. Uh, 276 00:16:34,240 --> 00:16:36,480 Speaker 6: They're going to be fighting about it in public and 277 00:16:36,520 --> 00:16:39,360 Speaker 6: in private for weeks to come. So I wish that 278 00:16:39,400 --> 00:16:42,480 Speaker 6: there was a more solid answer, but they're getting into 279 00:16:42,640 --> 00:16:45,280 Speaker 6: slightly uncharted territory STATCHA. 280 00:16:45,920 --> 00:16:48,560 Speaker 2: So you know, we talked a little bit, you know, 281 00:16:48,680 --> 00:16:52,280 Speaker 2: earlier about the Supreme Court Ethics Code, and you mentioned 282 00:16:52,320 --> 00:16:56,120 Speaker 2: that one of the concerns was enforceability. Do you have 283 00:16:56,120 --> 00:16:58,200 Speaker 2: any indication from the Court that they're going to be 284 00:16:58,280 --> 00:17:01,400 Speaker 2: speaking more on this topic or is what they've given 285 00:17:01,480 --> 00:17:03,640 Speaker 2: us sort of all they're going to give us, and 286 00:17:03,680 --> 00:17:05,679 Speaker 2: this will have to play out in other parts of 287 00:17:06,200 --> 00:17:06,679 Speaker 2: the debate. 288 00:17:07,680 --> 00:17:11,880 Speaker 6: The language from Chief Justice John Roberts describing the Ethics 289 00:17:11,920 --> 00:17:15,760 Speaker 6: Code was pretty final, you know. It basically was a 290 00:17:15,800 --> 00:17:19,880 Speaker 6: message that something along the lines of critics have been 291 00:17:19,960 --> 00:17:23,680 Speaker 6: saying that we don't have ethics standards the way other 292 00:17:24,040 --> 00:17:27,760 Speaker 6: courts and judges do in this country. So we're just 293 00:17:27,800 --> 00:17:30,720 Speaker 6: putting this all down in writing to show you, actually, 294 00:17:30,760 --> 00:17:33,280 Speaker 6: we do have these standards. We've been abiding by them forever. 295 00:17:34,200 --> 00:17:38,040 Speaker 6: So it wasn't even you know, here we have something new. 296 00:17:38,240 --> 00:17:41,480 Speaker 6: It was no, we have all of this. Let us 297 00:17:41,520 --> 00:17:44,280 Speaker 6: just show you our work a little bit. So I 298 00:17:44,440 --> 00:17:48,160 Speaker 6: don't have an indication that there's going to be an 299 00:17:48,280 --> 00:17:53,080 Speaker 6: enforcement effort, you know, like an oversight board created or 300 00:17:53,119 --> 00:17:56,320 Speaker 6: anything along those lines, but a lot of people thought 301 00:17:56,640 --> 00:17:59,480 Speaker 6: that Scotus would never even respond to a lot of 302 00:17:59,520 --> 00:18:03,080 Speaker 6: this criticism, and they did, so it's a really new 303 00:18:03,200 --> 00:18:04,200 Speaker 6: era in that way. 304 00:18:04,720 --> 00:18:06,800 Speaker 3: Yeah, I wanted to ask you about that response. You know, 305 00:18:06,880 --> 00:18:09,400 Speaker 3: it seems like a lot of people were clamoring and 306 00:18:09,520 --> 00:18:11,679 Speaker 3: you know, really pushing them to release something, and then 307 00:18:11,720 --> 00:18:15,159 Speaker 3: they did, and then the enthusiasm about that. You know, 308 00:18:15,400 --> 00:18:17,880 Speaker 3: I guess there really hasn't been that much enthusiasm about 309 00:18:17,880 --> 00:18:20,320 Speaker 3: the code that was released. So what are some of 310 00:18:20,320 --> 00:18:22,720 Speaker 3: the concerns that critics have about what the Supreme Court 311 00:18:22,800 --> 00:18:23,480 Speaker 3: actually put out? 312 00:18:24,280 --> 00:18:29,320 Speaker 6: I guess the first concern from critics and from activists 313 00:18:29,640 --> 00:18:35,359 Speaker 6: is that they're saying one thing and doing another. So, 314 00:18:35,760 --> 00:18:39,920 Speaker 6: you know, they say that they don't get into situations 315 00:18:39,960 --> 00:18:42,960 Speaker 6: that could appear to create a conflict of interest. So 316 00:18:43,160 --> 00:18:46,239 Speaker 6: then it becomes maybe a matter of opinion, what is 317 00:18:46,760 --> 00:18:50,240 Speaker 6: an appearance of conflict of interest? You know, all of 318 00:18:50,280 --> 00:18:53,880 Speaker 6: these justices spend a lot of time making speeches at 319 00:18:53,880 --> 00:18:57,960 Speaker 6: the Federalist Society. Could that potentially violate ethics standards? It's 320 00:18:58,000 --> 00:18:59,200 Speaker 6: a little bit unclear. 321 00:18:59,720 --> 00:19:02,359 Speaker 2: Well, a lot of unknowns still. Lit'll definitely have to 322 00:19:02,400 --> 00:19:05,560 Speaker 2: keep watching this situation. But our thanks to Emily Burnbaum. 323 00:19:05,960 --> 00:19:08,560 Speaker 2: Coming up next on the Bloomberg Law Show, we'll dive 324 00:19:08,640 --> 00:19:11,439 Speaker 2: into the salary wars playing out at big law firms. 325 00:19:11,680 --> 00:19:14,120 Speaker 2: I'm Kimberly Robinson and I'm Lydia Wheeler. 326 00:19:14,520 --> 00:19:15,600 Speaker 3: This is Bloomberg. 327 00:19:22,680 --> 00:19:26,359 Speaker 1: You're listening to the Bloomberg Law Podcast. Catch us weekdays 328 00:19:26,359 --> 00:19:30,200 Speaker 1: at ten pm Easter on Bloomberg dot Com, the iHeartRadio app, 329 00:19:30,240 --> 00:19:33,160 Speaker 1: and the Bloomberg Business App, or listen on demand wherever 330 00:19:33,200 --> 00:19:34,280 Speaker 1: you get your podcast. 331 00:19:36,880 --> 00:19:40,000 Speaker 2: I'm Kimberly Robinson and I'm Lydia Wheeler. We're in for 332 00:19:40,080 --> 00:19:42,639 Speaker 2: June Grasso, who's out this week. Let's get now to 333 00:19:42,720 --> 00:19:45,560 Speaker 2: the big lass salary wars. Joining us to discuss is 334 00:19:45,560 --> 00:19:50,040 Speaker 2: Bloomberg Laws Megan Tribe, who covers lawyers in the legal industry. Megan, 335 00:19:50,080 --> 00:19:52,199 Speaker 2: what are the salary wars? I mean, it seems like 336 00:19:52,200 --> 00:19:55,119 Speaker 2: this is something that we go through every year or 337 00:19:55,119 --> 00:19:57,479 Speaker 2: so that I keep hearing about. So what's happening? 338 00:19:59,119 --> 00:20:01,919 Speaker 7: Well, I think this time around might be a little 339 00:20:02,840 --> 00:20:05,960 Speaker 7: a little strong, but it's definitely You're definitely right that 340 00:20:06,040 --> 00:20:10,159 Speaker 7: we've seen this movie play out before, so kind of 341 00:20:10,440 --> 00:20:13,119 Speaker 7: pulling back a little bit, you know, the way that 342 00:20:13,160 --> 00:20:17,879 Speaker 7: big law compensates it's young lawyers is very nuanced. So 343 00:20:18,520 --> 00:20:22,840 Speaker 7: generally all big, top big law firms follow a senurity 344 00:20:22,880 --> 00:20:25,960 Speaker 7: based pay scale for their young lawyers, and all of 345 00:20:25,960 --> 00:20:28,720 Speaker 7: the top firms tend to move in lockstep with one another, 346 00:20:29,160 --> 00:20:32,000 Speaker 7: meaning that if one firm raises salaries, so in this 347 00:20:32,119 --> 00:20:35,360 Speaker 7: case Mail Bank, then the rest will likely do so 348 00:20:35,359 --> 00:20:38,720 Speaker 7: so as not to lose out on talent. The salary 349 00:20:38,800 --> 00:20:42,879 Speaker 7: war piece comes in as it's a way for firms, 350 00:20:42,920 --> 00:20:46,159 Speaker 7: the most profitable firms to set themselves apart from the 351 00:20:46,200 --> 00:20:52,640 Speaker 7: rest of the pack. You absolutely recall twenty twenty one 352 00:20:53,000 --> 00:20:56,840 Speaker 7: and twenty two when we just saw a series of 353 00:20:56,960 --> 00:21:01,560 Speaker 7: salary increases all coupled with the bonus announcements, so special 354 00:21:01,600 --> 00:21:05,120 Speaker 7: bonuses on top of annual bonuses, all of which were 355 00:21:05,160 --> 00:21:09,159 Speaker 7: increased for firms to really, you know, one, reward their 356 00:21:09,160 --> 00:21:14,879 Speaker 7: attorneys for doing really insane amounts of work during that time, 357 00:21:14,960 --> 00:21:20,280 Speaker 7: but also as a way to be competitive. So that's 358 00:21:20,440 --> 00:21:23,280 Speaker 7: there's definitely a bit of flexing on the part of 359 00:21:23,359 --> 00:21:28,520 Speaker 7: firms that happens every time something like this happens, but yeah, 360 00:21:28,560 --> 00:21:32,439 Speaker 7: this time around, it definitely was shocking and surprising. I 361 00:21:32,480 --> 00:21:35,080 Speaker 7: think most would agree, and so. 362 00:21:35,040 --> 00:21:37,280 Speaker 2: I want to get to that shocking bit, But first 363 00:21:37,480 --> 00:21:40,040 Speaker 2: I just want to be clear that we're talking about associates, 364 00:21:40,040 --> 00:21:42,840 Speaker 2: not partners here. So what is it that these attorneys 365 00:21:43,960 --> 00:21:46,679 Speaker 2: normally look like? I mean, are they really experienced? Are 366 00:21:46,680 --> 00:21:48,640 Speaker 2: they just starting out? Is that everything in between? 367 00:21:49,680 --> 00:21:53,520 Speaker 7: It's everything in between. So associates can range from you know, 368 00:21:53,560 --> 00:21:56,959 Speaker 7: a first year who just came out of law school 369 00:21:57,680 --> 00:22:00,640 Speaker 7: that will make now about two hundre and twenty five 370 00:22:00,680 --> 00:22:03,639 Speaker 7: thousand dollars a year, to more senior associates who have 371 00:22:03,800 --> 00:22:07,359 Speaker 7: about seven to eight years under their belt and they'll 372 00:22:07,400 --> 00:22:11,040 Speaker 7: be making anywhere between four hundred and twenty two four 373 00:22:11,119 --> 00:22:12,960 Speaker 7: hundred and thirty five thousand dollars a year. 374 00:22:13,119 --> 00:22:17,480 Speaker 3: Now, you mentioned that Millbank was the firm that really 375 00:22:17,560 --> 00:22:19,840 Speaker 3: kicked this all off. Can you tell us a little 376 00:22:19,880 --> 00:22:23,160 Speaker 3: bit about that law firm and exactly what they did, 377 00:22:23,200 --> 00:22:24,480 Speaker 3: what was their increase? 378 00:22:25,640 --> 00:22:28,880 Speaker 7: Sure, so mill Bank really has made it a point 379 00:22:28,920 --> 00:22:32,720 Speaker 7: in recent years to become a leader in associate compensation. 380 00:22:33,200 --> 00:22:35,720 Speaker 7: You know, going back to twenty eighteen when it raised 381 00:22:35,960 --> 00:22:39,879 Speaker 7: starting salary associate salaries to one hundred and ninety thousand 382 00:22:40,080 --> 00:22:43,760 Speaker 7: a year. It was also the first to increase associate 383 00:22:43,800 --> 00:22:49,080 Speaker 7: salaries in early twenty twenty two and its chair Scott 384 00:22:49,160 --> 00:22:53,040 Speaker 7: Edelman in this recent announcement where they bumped salaries I 385 00:22:53,080 --> 00:22:55,920 Speaker 7: believe ten thousand dollars across the board set. In an 386 00:22:55,960 --> 00:22:59,920 Speaker 7: internal email announcing those increases, he cited high levels of 387 00:23:00,119 --> 00:23:03,840 Speaker 7: activity across the firm driving those pay raises. 388 00:23:04,520 --> 00:23:08,560 Speaker 2: Alongside with those salary bumps come and increase in the 389 00:23:08,560 --> 00:23:11,119 Speaker 2: bonus scale. You mentioned that a little bit. What kinds 390 00:23:11,200 --> 00:23:14,479 Speaker 2: of bonuses are these lawyers eligible for? What what are 391 00:23:14,520 --> 00:23:15,400 Speaker 2: we talking about here? 392 00:23:16,520 --> 00:23:20,480 Speaker 7: So that's just one thing. There wasn't any increase in 393 00:23:20,560 --> 00:23:23,439 Speaker 7: bonuses this year, so it stayed the same. The scale 394 00:23:23,520 --> 00:23:27,320 Speaker 7: stayed the same as we've seen over the past three years, 395 00:23:27,440 --> 00:23:31,960 Speaker 7: ranging from fifteen thousand dollars to one hundred and fifteen 396 00:23:32,440 --> 00:23:34,760 Speaker 7: thousand dollars in the most senior associates. So these are 397 00:23:34,800 --> 00:23:39,040 Speaker 7: annual bonuses. These are awarded to associates who had been 398 00:23:39,240 --> 00:23:41,680 Speaker 7: have been at the firm for you know, the calendar year, 399 00:23:41,840 --> 00:23:47,640 Speaker 7: who have met their billable hours requirements and in some 400 00:23:47,720 --> 00:23:52,199 Speaker 7: special circumstances, you know, other requirements that the firm has. 401 00:23:52,840 --> 00:23:54,720 Speaker 3: This seems like a lot of money that we're talking 402 00:23:54,760 --> 00:23:57,879 Speaker 3: about here. So what is expected from these attorneys in 403 00:23:57,960 --> 00:24:01,040 Speaker 3: return in order to justify those big salaries. 404 00:24:01,800 --> 00:24:04,320 Speaker 7: On the associate side, the trade off is pretty clear. 405 00:24:04,680 --> 00:24:06,680 Speaker 7: You know, you'll be working at a top law firm, 406 00:24:06,840 --> 00:24:09,840 Speaker 7: and that on your resume alone is able to open 407 00:24:09,880 --> 00:24:13,760 Speaker 7: doors in your legal career. But the flip side of 408 00:24:13,800 --> 00:24:16,840 Speaker 7: that is you are working a lot of one of 409 00:24:16,840 --> 00:24:20,480 Speaker 7: the most top law firms expect associates to build anywhere, 410 00:24:20,680 --> 00:24:24,480 Speaker 7: you know, around two thousand hours a year, and that's 411 00:24:24,560 --> 00:24:27,480 Speaker 7: not including just general, you know, run of the mill 412 00:24:27,560 --> 00:24:31,240 Speaker 7: admin work, So you really are kind of turning over 413 00:24:32,480 --> 00:24:35,000 Speaker 7: a big portion of your life to these law firms 414 00:24:35,000 --> 00:24:37,280 Speaker 7: in return for these salaries. 415 00:24:37,680 --> 00:24:39,399 Speaker 2: Well, we've talked a little bit a couple of times 416 00:24:39,400 --> 00:24:42,680 Speaker 2: about this being a surprise move from Millbank. Was that 417 00:24:42,920 --> 00:24:46,240 Speaker 2: related to the state of the legal industry, and if so, 418 00:24:46,440 --> 00:24:47,720 Speaker 2: what does that look like right now. 419 00:24:48,880 --> 00:24:51,880 Speaker 7: It's interesting that it comes at this time, So bumps 420 00:24:51,920 --> 00:24:55,800 Speaker 7: typically happened during boom times, as we saw in twenty 421 00:24:55,920 --> 00:24:58,800 Speaker 7: twenty one and twenty two, when M and A activity 422 00:24:58,960 --> 00:25:01,800 Speaker 7: spikes too in all time high and there really weren't 423 00:25:01,920 --> 00:25:04,359 Speaker 7: enough associates to go around to do the work at 424 00:25:04,400 --> 00:25:09,000 Speaker 7: these law firms. So move Bank's move now comes emitted 425 00:25:09,080 --> 00:25:12,600 Speaker 7: downturns for many firms. As you know, we all see 426 00:25:12,600 --> 00:25:17,280 Speaker 7: transactional activity hasn't really come back. You know, some firms 427 00:25:17,400 --> 00:25:21,600 Speaker 7: have laid off associates and delayed start dates for first years. 428 00:25:22,320 --> 00:25:26,439 Speaker 7: You know, lateral associate hiring is down. But what this 429 00:25:26,720 --> 00:25:29,280 Speaker 7: likely shows is that there are some firms that are 430 00:25:29,320 --> 00:25:34,159 Speaker 7: getting a disproportionate share of the work that's available. So 431 00:25:34,400 --> 00:25:37,879 Speaker 7: in a recent study by Wells Fargo, net income among 432 00:25:38,200 --> 00:25:42,720 Speaker 7: the biggest fifty firms in the US was up about 433 00:25:42,800 --> 00:25:46,600 Speaker 7: five point two percent on average throughout the first nine 434 00:25:46,600 --> 00:25:49,399 Speaker 7: months of the year, and then for the next fifty 435 00:25:49,720 --> 00:25:54,040 Speaker 7: largest firms, net income was down point seven percent. So 436 00:25:54,240 --> 00:25:57,280 Speaker 7: there's kind of so there's what we're seeing is there's 437 00:25:57,320 --> 00:26:03,119 Speaker 7: this disparity and the salaries increases are kind of reflective 438 00:26:03,119 --> 00:26:04,000 Speaker 7: of us. 439 00:26:04,840 --> 00:26:07,480 Speaker 3: So what has the response been from other firms? Are 440 00:26:07,520 --> 00:26:10,800 Speaker 3: they taking things further or are they meeting Millbank here 441 00:26:10,880 --> 00:26:12,200 Speaker 3: on this salary. 442 00:26:12,600 --> 00:26:16,199 Speaker 7: So it was interesting after Millbank's initial announcement, there was 443 00:26:16,400 --> 00:26:19,520 Speaker 7: a fair amount of silence among law firms and it 444 00:26:19,600 --> 00:26:22,760 Speaker 7: wasn't until Krevas, which has been the leader for decades 445 00:26:22,840 --> 00:26:26,560 Speaker 7: in associate compensation, announced its scale that we started to 446 00:26:26,560 --> 00:26:29,360 Speaker 7: see law firms say that they would be matching. Now 447 00:26:29,440 --> 00:26:31,760 Speaker 7: I think we're at about it over a dozen firms 448 00:26:31,760 --> 00:26:33,959 Speaker 7: that have said that they would be matching this new salary. 449 00:26:34,080 --> 00:26:36,280 Speaker 7: So as we wait and see what other firms will do, 450 00:26:36,280 --> 00:26:38,479 Speaker 7: it will be interesting to see which go along with 451 00:26:38,520 --> 00:26:41,480 Speaker 7: this scale and which don't, you know, and perhaps we'll 452 00:26:41,480 --> 00:26:47,520 Speaker 7: see the long anticipated bifurcation of salaries amongst law firms. 453 00:26:48,880 --> 00:26:51,520 Speaker 2: So it occurs to me that these new salary and 454 00:26:51,680 --> 00:26:53,960 Speaker 2: bonus scales, whenever they happen, they're sort of a one 455 00:26:54,000 --> 00:26:56,520 Speaker 2: way ratchet. Do they ever go down or is it 456 00:26:56,560 --> 00:26:57,800 Speaker 2: always just up, up, up. 457 00:27:00,119 --> 00:27:02,000 Speaker 7: That's a really interesting question, and it gets in an 458 00:27:02,080 --> 00:27:06,640 Speaker 7: interesting point about this recent round of salary raises. Associate 459 00:27:06,720 --> 00:27:10,480 Speaker 7: salaries haven't gone down at least over the last two decades. 460 00:27:11,440 --> 00:27:14,280 Speaker 7: There are static costs and it typically stays that way, 461 00:27:14,480 --> 00:27:18,320 Speaker 7: and firms really don't typically walk them back. But bonuses 462 00:27:18,480 --> 00:27:22,199 Speaker 7: can vary year to year depending on the profitability of 463 00:27:22,240 --> 00:27:25,720 Speaker 7: the law firm. So, for example, in two thousand and nine, 464 00:27:25,760 --> 00:27:28,760 Speaker 7: after the bottom fell out in the global economy, bonuses 465 00:27:28,840 --> 00:27:33,159 Speaker 7: fell from thirty five thousand dollars for first years just 466 00:27:33,440 --> 00:27:37,520 Speaker 7: down to seventy five hundred salaries, however, stayed the same. 467 00:27:38,400 --> 00:27:41,520 Speaker 7: So by putting more into bonuses ZEO over year, it 468 00:27:41,600 --> 00:27:45,119 Speaker 7: allows the firm to reward associates when things are good, 469 00:27:45,920 --> 00:27:50,879 Speaker 7: but without having a fixed cost when times are bad. 470 00:27:51,080 --> 00:27:54,520 Speaker 7: That's why this move by Millbank is really surprising because 471 00:27:54,560 --> 00:27:57,639 Speaker 7: it's locks the industry's top firms into a new scale 472 00:27:58,000 --> 00:28:01,239 Speaker 7: that they have to pay that isn't discretion during a 473 00:28:01,280 --> 00:28:04,480 Speaker 7: nod boom time. So it'll be really interesting to see 474 00:28:04,520 --> 00:28:06,080 Speaker 7: what happens in the coming months. 475 00:28:06,800 --> 00:28:09,040 Speaker 3: So why did Millbank do this to start with? Like, 476 00:28:09,080 --> 00:28:12,280 Speaker 3: what was their reasoning for wanting to up the salaries here? 477 00:28:12,920 --> 00:28:15,000 Speaker 7: They said that they had high levels of activity and 478 00:28:15,040 --> 00:28:18,520 Speaker 7: they wanted to reward their associates. The other thing I 479 00:28:18,520 --> 00:28:22,080 Speaker 7: think they alluded to in their email was cost of 480 00:28:22,160 --> 00:28:25,679 Speaker 7: living and so inflation being what it is, I believe 481 00:28:25,720 --> 00:28:29,560 Speaker 7: now starting salaries have met inflation. Those were their main 482 00:28:29,560 --> 00:28:35,000 Speaker 7: reasons why, and you know, not not to you know, 483 00:28:35,160 --> 00:28:38,719 Speaker 7: to go back to the beginning original point, but that's 484 00:28:38,520 --> 00:28:40,560 Speaker 7: it's just kind of a way for the top firms 485 00:28:41,440 --> 00:28:43,200 Speaker 7: to show that they are the top firms. 486 00:28:43,720 --> 00:28:46,760 Speaker 2: So I wonder if you know what the whole effect 487 00:28:46,800 --> 00:28:49,280 Speaker 2: on the legal industry is going to be after this 488 00:28:49,400 --> 00:28:52,360 Speaker 2: latest round of salary raises. 489 00:28:54,200 --> 00:28:56,840 Speaker 7: So it'll be really interesting to see what the fallout 490 00:28:56,880 --> 00:28:59,080 Speaker 7: is from this. I think it definitely makes the statement 491 00:28:59,640 --> 00:29:04,320 Speaker 7: that not all firms are similarly situated. Some law firms 492 00:29:04,360 --> 00:29:08,120 Speaker 7: can match without issue, others will have a very tough 493 00:29:08,240 --> 00:29:11,160 Speaker 7: time if they decide to do so, and a hard 494 00:29:11,360 --> 00:29:15,920 Speaker 7: sell to their partners if they want to match. One 495 00:29:15,960 --> 00:29:18,400 Speaker 7: thing to keep in mind, though, is that when firms 496 00:29:18,520 --> 00:29:22,040 Speaker 7: do announce increases like this, they have two options to 497 00:29:22,080 --> 00:29:25,840 Speaker 7: pay for it. One is to require associates to work 498 00:29:25,880 --> 00:29:31,240 Speaker 7: more hours, or the other is to increase billing rates. 499 00:29:31,280 --> 00:29:34,120 Speaker 7: And we've seen over the past decade that major law 500 00:29:34,160 --> 00:29:38,920 Speaker 7: firms have consistently raised their rates at significant levels, which 501 00:29:38,960 --> 00:29:43,040 Speaker 7: has helped some maintain revenue growth even during time to 502 00:29:43,120 --> 00:29:47,360 Speaker 7: flat demand. So revenue gains this year were largely driven 503 00:29:47,480 --> 00:29:52,360 Speaker 7: by the average billing rate increases about eight percent according 504 00:29:52,360 --> 00:29:56,360 Speaker 7: to that Wells Fargo survey. That is the highest growth 505 00:29:56,360 --> 00:30:01,240 Speaker 7: in billing rates that Wells Fargo has seen, and anticipating 506 00:30:01,400 --> 00:30:05,760 Speaker 7: that rate to stay the same into next year. So 507 00:30:05,880 --> 00:30:11,600 Speaker 7: if firms feel confident that they can continue to raise rates, 508 00:30:11,640 --> 00:30:16,040 Speaker 7: you know, perhaps they will feel confident enough to increase 509 00:30:16,200 --> 00:30:20,000 Speaker 7: associate salaries. One person I did talk to those did 510 00:30:20,080 --> 00:30:25,360 Speaker 7: say that the pairing of the boat the salary increases 511 00:30:25,480 --> 00:30:28,680 Speaker 7: as well as the rate increases might be a tough 512 00:30:28,720 --> 00:30:32,160 Speaker 7: sell to some clients. And you know, it'll be really 513 00:30:32,160 --> 00:30:35,240 Speaker 7: interesting to see what kind of conversations are being had 514 00:30:35,360 --> 00:30:39,480 Speaker 7: right now and into next year as law firms determine 515 00:30:39,840 --> 00:30:40,760 Speaker 7: where to go from here. 516 00:30:41,280 --> 00:30:44,440 Speaker 2: So far we've been focusing on associate pay, but let's 517 00:30:44,440 --> 00:30:48,160 Speaker 2: turn out of partners, Megan. If the associates are making 518 00:30:48,400 --> 00:30:51,480 Speaker 2: these big numbers, how much are the partners making. 519 00:30:52,200 --> 00:30:56,720 Speaker 7: Well, partners are making a fair amount of money these 520 00:30:56,800 --> 00:30:59,680 Speaker 7: days at the nation's top firms. I think that's the 521 00:31:00,640 --> 00:31:04,880 Speaker 7: easiest way to say it. You know, last two three years, 522 00:31:04,920 --> 00:31:09,400 Speaker 7: we've just seen enormous records pay per equity partner. So 523 00:31:09,480 --> 00:31:12,960 Speaker 7: equity partner is a partner that owns a stake in 524 00:31:13,000 --> 00:31:16,520 Speaker 7: the law firm. So when we think about traditional partnerships, 525 00:31:16,520 --> 00:31:20,360 Speaker 7: that's we're referring to. You know, we've seen you know, 526 00:31:20,440 --> 00:31:25,479 Speaker 7: reported figures between six seven million, but we've also you know, 527 00:31:26,000 --> 00:31:30,800 Speaker 7: beyond that herd of compensation packages for top lateral talents 528 00:31:30,840 --> 00:31:34,640 Speaker 7: being in the double digits in the millions. So it's 529 00:31:34,720 --> 00:31:39,160 Speaker 7: definitely rising and at some of the nation's top firms, 530 00:31:39,400 --> 00:31:40,160 Speaker 7: it's enormous. 531 00:31:40,320 --> 00:31:40,560 Speaker 2: Wow. 532 00:31:40,600 --> 00:31:43,440 Speaker 3: And you mentioned before that these higher salaries just for 533 00:31:43,520 --> 00:31:46,680 Speaker 3: associates requires them to do a lot more work. But 534 00:31:47,360 --> 00:31:50,080 Speaker 3: what about for partners making these higher salaries. I mean, 535 00:31:50,160 --> 00:31:52,600 Speaker 3: isn't it once you make partner you get to step 536 00:31:52,600 --> 00:31:55,120 Speaker 3: back a little bit or is there more work involved? 537 00:31:56,040 --> 00:31:59,200 Speaker 7: Oh, there's definitely more work in faults. So think of 538 00:31:59,240 --> 00:32:01,719 Speaker 7: it as you know, you're climbing up the ladder. And 539 00:32:02,320 --> 00:32:05,400 Speaker 7: you know, at most firms, traditionally it's around the seventh 540 00:32:05,480 --> 00:32:09,000 Speaker 7: or eighth year, sometimes ninth that you will be eligible 541 00:32:09,080 --> 00:32:13,240 Speaker 7: for partnership. And once you are a partner or an 542 00:32:13,240 --> 00:32:17,480 Speaker 7: equity partner, there's different scales within the partnership At a 543 00:32:17,480 --> 00:32:20,320 Speaker 7: lot of big law firms, and ranges and set in 544 00:32:20,400 --> 00:32:25,120 Speaker 7: terms of salaries. You know, the big astronomical figures that 545 00:32:25,120 --> 00:32:28,520 Speaker 7: we're talking about, you know, those are really the superstars, 546 00:32:28,640 --> 00:32:32,560 Speaker 7: the rain makers. Those are really like the superstars who 547 00:32:32,640 --> 00:32:36,200 Speaker 7: have huge clients, whether that be a big private equity 548 00:32:36,240 --> 00:32:39,920 Speaker 7: firm you know, or a big public company. You know, 549 00:32:40,120 --> 00:32:43,040 Speaker 7: those are the people that are the ones getting these 550 00:32:43,800 --> 00:32:47,880 Speaker 7: big figures. But there's a big range within you know, partnership. 551 00:32:48,120 --> 00:32:51,480 Speaker 7: There's also you know, something called a non equity partner, 552 00:32:51,880 --> 00:32:55,240 Speaker 7: which they don't have equity stake and part of their 553 00:32:55,560 --> 00:33:00,640 Speaker 7: pay is salaried. So there's a bunch of different ways complicated. 554 00:33:01,640 --> 00:33:03,960 Speaker 2: One thing that you you talked about before and you've 555 00:33:03,960 --> 00:33:06,200 Speaker 2: done a lot of reporting on this is about billing 556 00:33:06,280 --> 00:33:09,440 Speaker 2: rates and sort of the effect that that has on, 557 00:33:09,560 --> 00:33:14,120 Speaker 2: you know, on associate salaries and you know work. Can 558 00:33:14,160 --> 00:33:16,280 Speaker 2: you tell us what those look like for some of 559 00:33:16,320 --> 00:33:17,680 Speaker 2: the most sought after partners. 560 00:33:18,280 --> 00:33:22,000 Speaker 7: So for some of the most sought after partners, you know, 561 00:33:22,160 --> 00:33:27,560 Speaker 7: clients are looking at a bill worth you know, with 562 00:33:27,600 --> 00:33:30,840 Speaker 7: a top partner billing out at about you know, eighteen 563 00:33:31,800 --> 00:33:36,720 Speaker 7: two thousand dollars an hour. Wow, Yeah, but these are 564 00:33:36,760 --> 00:33:40,960 Speaker 7: really these are really the superstart, you know, the partners 565 00:33:40,960 --> 00:33:43,800 Speaker 7: that you want on your case, you know, especially when 566 00:33:43,800 --> 00:33:46,440 Speaker 7: it's a bet the company case. But then after that, 567 00:33:46,720 --> 00:33:49,800 Speaker 7: you know, the billing rates can for partners can range 568 00:33:49,800 --> 00:33:54,680 Speaker 7: anywhere from you know, a thousand, twelve hundred, you know, 569 00:33:54,800 --> 00:33:56,680 Speaker 7: up to that and again we're talking about the top 570 00:33:56,720 --> 00:34:02,200 Speaker 7: top firms, you know, and associates can go from seven 571 00:34:02,240 --> 00:34:07,160 Speaker 7: hundred and fifty to one thousand dollars depending on experience. 572 00:34:07,680 --> 00:34:10,879 Speaker 3: Is that sustainable for the legal industry though it. 573 00:34:10,920 --> 00:34:14,040 Speaker 7: Has been, and it seems like it would continue to 574 00:34:14,080 --> 00:34:18,040 Speaker 7: be as clients know that, you know, they can call 575 00:34:18,120 --> 00:34:22,000 Speaker 7: up expirm and get the result that they want. Billing 576 00:34:22,080 --> 00:34:26,400 Speaker 7: rates have consistently gone up year over year and it 577 00:34:26,440 --> 00:34:31,480 Speaker 7: doesn't look like there's any indication that it'll slow Well. 578 00:34:31,320 --> 00:34:34,239 Speaker 2: That's Bloomberg Laws, Megan Tribe that's going to do it 579 00:34:34,280 --> 00:34:37,280 Speaker 2: for this edition of the Bloomberg Law Show. I'm Kimberly 580 00:34:37,360 --> 00:34:40,840 Speaker 2: Robinson and I'm Ridio Wheeler. This is Bloomberg