Last year, we reported on a nice perk for Cravath associates abroad: a hefty cost of living allowance, which had junior associates in London making over $300,000.
It looks like the half-Skadden mentality has made its way across the Atlantic. From a tipster:
Cravath Swaine & Moore cuts its COLA in the London office from $110,000 to $60,000 as of January 1, 2009. [A]ll the associates, one after one, where called into the office of a partner, Philip Boeckman, to receive the news. The reason mentioned for the cut is the evolution of the dollar-pound exchange rate.
The COLA is the same for all associates in London regardless of the level of seniority. The COLA gets paid together with the base salary on a bi-weekly basis.
That’s a big cut for the 20 associates in the London office. Before the COLA was raised to $110,000 last year, it was at $85,000.
RollOnFriday is not overly sympathetic:
Clearly the firm’s partners have now got wise. This week associates were hauled in one by one and told that the COLA would be reduced by $50k from 1st January, in response to weakness of Sterling. One associate complained to RollOnFriday that this comes on top of bonuses being halved and the ski weekend being cancelled, and says that these measures “pretty badly affect associate morale”. OK, no one likes to get less wedge – but low morale because of only getting £40k to live in London, when everyone else is being made redundant? Bring out the violins.
The other side of the pond just got a lot less attractive.
Earlier: Biglaw Perk Watch: Working Abroad
Cravath London associates lose £34k bonus [RollOnFriday]