financial crisis legal salaries.JPGWhen we last saw Bryan Cave, the firm was busy acquiring Powell Goldstein, and saying great things about their long-term future and financial health.

Having just added so many new attorneys, the message ATL received this morning was surprising.

Two pieces of news for Bryan Cave associates today: they’re deferring salary increases by three months and eliminating the associate shared fee program (where associates got bonuses for bringing in new clients)….

The spin on the deferrals is that they’re a better option than layoffs and less drastic than an all-out salary freeze.

Shortly after this first report, we received the full firm-wide email announcing the changes:

In light of the continuing volatility in the economy and the uncertainties in the marketplace as we move into 2009, we believe it is now prudent to implement the following actions with respect to our compensation programs:

* Deferral of Consideration of Increases for Counsel and Associates. Consideration of increases for counsel and associates will be deferred in all offices. For example, for those cities where increases were previously effective January 1, the date for 2009 will be April 1. Offices with different compensation consideration dates will

Occasionally, commenters in our layoffs posts suggest that they would be willing to give up some of their salary in exchange for keeping their jobs. So … here’s a chance to do just that, at least for a period of time.

But most Bryan Cave associates will be pissed. Because you know what would have been even more “less drastic” than an all-out salary freeze? Not acquiring the debts and liabilities of Powell Goldstein.

More tipster reaction and the full Bryan Cave memo after the jump.


Bryan Cave LLP logo AboveTheLaw Above the Law blog.jpgAnother tipster reports:

I hope this actually means no layoffs, though, as many junior associates have been really hurting for work. I also hope it means they won’t have to be too stingy with raises when the deferral period ends, since Bryan Cave is not lockstep with the Simpson 160k scale after the first couple years.

If people are hurting for hours, the next logical question is “what about the bonus?”

[T]hey’re leaving intact the hours-based bonus program, so the few folks who managed to find enough work to meet their targets this year (the bonus year ended on October 31 for most offices and word is that not too many people made even the first threshold) will get what they earned.

Oh, and Bryan Cave legal assistants? Yeah, Bryan Cave has some love for you too. From Bryan Cave’s memo:

* Bonuses for Legal Assistants and Staff. There will be no discretionary bonuses paid to legal assistants or staff for 2008. However, legal assistants will be paid any hours-based performance bonuses earned for 2008.

Leave it to David Lat to put the entire legal market into the proper perspective: “What we are seeing right now is an innovation of cheapness and a race to the bottom.”

Read the full memo below.

BRYAN CAVE — MEMO — BONUSES AND COMPENSATION

FROM: Management Committee

RE: Changes Affecting Bonuses and Compensation Increases

As we are all aware, economic conditions continue to be very difficult and are expected to remain so for some time. Fortunately, Bryan Cave has always operated on a conservative financial basis, and we remain on a sound economic footing. As you would expect, however, we are not immune from the economic downturn that affects so many of our clients.

Over the past year as the economy has deteriorated, we have implemented a number of cost control and expense reduction initiatives in order to better align our operations with the weakening economic environment. These actions include travel limitations, staff hiring restrictions, postponement of CSG Retreats, more focused use of marketing funds, renegotiation of vendor agreements and other expense-saving measures. In light of the continuing volatility in the economy and the uncertainties in the marketplace as we move into 2009, we believe it is now prudent to implement the following actions with respect to our

compensation programs:

• Deferral of Consideration of Increases for Counsel and Associates. Consideration of increases for counsel and associates will be deferred in all offices. For example, for those cities where increases were previously effective January 1, the date for 2009 will be April 1. Offices with different compensation consideration dates will be similarly delayed.

• Deferral of Consideration of Increases for Legal Assistants and Staff. Consideration of increases for legal assistants and staff on a firm-wide basis will be deferred until April 1, 2009.

• Counsel and Associate Bonuses. The shared fee program for associates will terminate after the current cycle. Shared fee bonuses for the period ending November 30, 2008 will be paid. The Performance Bonus program remains for counsel and associates. The discretionary

shared fee program for counsel also remains.

• Bonuses for Legal Assistants and Staff. There will be no discretionary bonuses paid to legal assistants or staff for 2008. However, legal assistants will be paid any hours-based performance bonuses earned for 2008.

As you surely appreciate, we are operating in an unusually turbulent economic environment. Like everyone else, we hope that economic stability will be restored during 2009. However, we consider the uncertainties sufficiently great that we need to take the prudent economic steps described above to ensure the Firm’s success for the long term. We very much appreciate everyone’s contributions to the success of the Firm which makes it especially difficult to take these steps. We trust that you understand the need for these decisions. Please feel

free to contact your Office Managing Partner, Director of Administration or us if you have questions.

Earlier: Bryan Cave & Powell Goldstein ‘Officially’ Announce Merger (Or Acquisition Or … Something)

Bryan Cave to Acquire Powell Goldstein

Related: ATL coverage of salary freezes


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