Bonus envy

As the recession has gone on, the overseas high life has dried up. And so have the perks

By Momoko Price

On Friday December 10th, 2010

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Illustration by Martin HaakeGail Wong’s experience is emblematic of how much things have changed for Canadian lawyers in just a few short years.

In 2005, Wong, a University of Toronto graduate practising corporate law at McCarthy Tétrault LLP, was recruited by London-based Clifford Chance LLP. She was riding a wave that was sweeping up lawyers worldwide, dropping them into a culture of exorbitant luxury.

“When we arrived at Clifford Chance the mood was euphoric,” Wong recalls. Coworkers had arrived in the previous two years from New Zealand, Hong Kong and Singapore.

Attending closing dinners that started at noon and ended well past midnight was typical, she recalls. Sometimes they even travelled as far as Bahrain and Istanbul to celebrate. There were office trolleys laden with champagne, departmental retreats to Prague and Berlin, extended sabbaticals to accommodate world travel and ski trips to the Alps for top clients, all expenses paid.

Wong, now 34, knew she’d arrived at the peak of the European banking bubble. She also knew it wouldn’t last. So, when the credit crunch hit in late 2007, siphoning away the perks (and the jobs) about a year later, she was at least somewhat prepared. Sadly, many of her colleagues were not. “Our major clients were laid off, lawyers were losing their jobs, firms were calling their partners and reshaping,” she says.

“Eventually, the drinks trolley disappeared.”

By August 2009, Wong returned home to McCarthys, accepting a position she coveted, as director of student programs for Ontario, and ultimately escaping the low morale that had cast a shadow over London.

Meanwhile in New York City, top-tier U.S. firms, which only a few years before had been recruiting Canadian students in record numbers, began jettisoning associates.

At the time, Michael Gans, a partner at Blake, Cassels & Graydon LLP, was working in the firm’s New York office. The massive layoffs were ricocheting through BigLaw. “There were widely publicized layoffs, cutbacks and salary freezes,” he says. “Latham & Watkins fired over 100 associates. Allen & Overy and U.K. firms pulled back dramatically. Bonuses were either eliminated or dramatically scaled back.”

All this was a sharp contrast to just a few years earlier, when Gans says annual bonuses for associates were around $50,000 (U.S.). “It’s half that or a third of that now,” he adds.

Fortunately for Gans, who is transitioning back to Blakes’s Toronto office for family reasons, being a partner at a small satellite office sheltered him from the recession. But he acknowledges that shrinking demand in New York is still curtailing the ambitions of young Canadian lawyers.

“There is no question that there is less opportunity there today than there was five or six years ago,” Gans says. “It’s better than it was a year or two ago, but it’s still not where it was.”

Mya Bulwa, assistant dean of recruitment, admissions and career development at Osgoode Hall Law School, has seen New York recruitment retreat sharply in the last two years. “In the summer of 2008, we had just over 10 firms participating in our OCI program, and the summers before that, even more. In 2009 it dropped off. This summer a number of firms who always came before didn’t come at all. Some collected applications and didn’t come up for interviews, but many didn’t even collect applications.”

Moreover, a summer placement in New York used to equal a job after graduation. Not anymore.

The disappearance of international opportunities — particularly in London and New York — is hitting Ontario’s youngest lawyers doubly hard. Not only have overseas positions dried up, but top international candidates are competing with local lawyers for Toronto jobs.

Carrie Heller, president of Toronto recruitment agency The Heller Group, says she’s seen this compounding effect first-hand. “In the last couple of years there has been a significant increase in the number of Canadians trying to return to Canada from the U.S. and U.K.,” she says. “And a lot of foreign lawyers are trying to make the move to Canada as they view us as a safe haven.”

Wong says that in light of the dramatic boom and bust of the last few years, today’s graduates should seriously consider the risks of working overseas. For one thing, it’s not so easy to come back to Canada anymore.

She recalls hearing from a recruiter who had a junior position in-house to place and she received over 100 applications from a variety of backgrounds. “It doesn’t matter if you have amazing credentials and spent time overseas. You’re still competing with other people.”

With a dwindling job market abroad and intensifying competition at home, the glory days of popping Moët with a favoured client on the slopes of Courchevel are becoming a faded memory.

Just four years ago, an overseas opportunity like Wong’s was considered glamorous. But for Canadian lawyers today, it’s not just rare — it’s a gamble.


Illustration by Martin Haake