Nationwide Pay Raise Freeze Watch: Latham & Watkins

onDecember 16, 2008 at 11:34 AM

If you liked your 2008 salary, you’re going to love your 2009 salary. Latham & Watkins just sent around this email about 2009 associate compensation:

The world economy is experiencing unforeseen and unprecedented dislocations. Our clients are feeling those impacts and the legal community is not immune. The Executive Committee has spent the last few weeks discussing these critical issues in the context of planning for 2009. While we anticipate that the diversity of our practices and global reach will serve us well in the year to come, it seems clear that the global economy will continue to be challenged at least through 2009. As a result, we are modifying associate compensation as part of a prudent business strategy.

Effective January 1, 2009, associates moving to the next class year will continue to receive the same base compensation as they received in 2008. Please do not hesitate to contact your local Associates Committee members if you have any questions about the resulting salary scales.

We expect as a general matter to continue to reward outstanding performances through our merit-based bonus pool. As in previous years, we will announce bonuses in late January.

We are confident that by continuing to work together we will be well positioned to succeed in the face of the economic challenges that lie ahead. We thank each of you for your many contributions to the firm.

Freezing salaries is now part of the “market.” The latest associate pay raise is effectively being undone.

Sponsored

Early Adopters Of Legal AI Gaining Competitive Edge In Marketplace

How to best leverage generative AI as an early adopter with ethical use.

From LexisNexis

After the jump, what was that about bonuses?

Unlike other firms that have taken a stroll down salary freeze lane, Latham & Watkins doesn’t indicate that it will reconsider the pay freeze based on how 2009 shapes up. Other firms had said that they would review associate pay increases in March 2009 (or later).

The LW memo also really puts a damper on 2008 associate bonuses. “We expect as a general matter to continue to reward outstanding performances through our merit-based bonus pool” lays the groundwork not only for Half-Skadden (or less) bonuses, but all but promises that some people will be left out of the bonus pool entirely.

Moreover, with its references to “unforeseen and unprecedented dislocations,” the memo makes it sound like Latham associates should prepare for some difficult times ahead.