While the Latham & Watkins salary freeze came as a shock to most in the Biglaw community, Reed Smith associates have known for days that their salaries would remain frozen in place.
Reed Smith laid off 115 people two weeks ago. Individual salary memos started going out to the remaining Reed Smith associates last week (Reed Smith makes salary decisions known on a person-to-person basis). Not surprisingly, most people are not getting 2009 raises.
Because of the individualized nature of the salary information, we can’t say that nobody at Reed Smith will be receiving a raise. We can say that nobody we’ve talked to has received a full raise, expects a full raise, or is hoping for anything other than having a job when the calendar flips over. A couple of people we talked to will be getting a small salary bump, but nothing at the normal level for their class.
Did somebody say something about bonuses? Our Reed Smith sources don’t expect to get that either. There hasn’t been any official announcement, but the rumblings around the firm all point towards the “special bonus” of $0. Though, one tipster points out that there are enough bonus complications that the firm might be able to avoid the negative press associated with a $0 bonus:
RS doesn’t give end-of-year bonuses. All of our bonuses are dependent on hours or performance or are related to profit sharing. Everything is discretionary, except profit sharing, which is based on the firms performance, and well, we know where that is.
The lesson, as always, if your firm recently picked up a bunch of Thelen attorneys, or a bunch of Heller attorneys, things are not going well.
This is an open thread to discuss best gifts for lawyers. Perhaps you can e-mail the post out to friends and relatives instead of compiling the hated gift wish list.
To get your creative juices flowing, here’s a few ideas we came up with:
For the lawyers who like bling:Profession Gifts offers this pin up as “a beautiful clothing accessory that makes both a professional and fashion statement.” Indeed.
For the lawyer doing doc review around the country: We hate stripping down to go through airport security and unloading the contents of our carry-ons. While the shoes, the belt, and the metal bustier still have to be shed, laptops can stay in their bags according to a TSA policy change made this summer. The catch is that you have to have a special “checkpoint-friendly” bag (via USAToday). Here are some bags fitting the bill from The Week.
For those who work so hard that they never see their kids: It’s nice to remind the little ones of their absent parents. For Counsel has a whole section of “Gifts for Lawyers’ Babies and Toddlers.” We like the idea of branding the little one with this bib.
For the lawyer with lots of weird stuff on his or her desk: We might recommend Supreme Court Bobbleheads (if you can get one) from the Green Bag. Scalia’s up for grabs on eBay at the moment. Current bid: $102.50.
For the kinky lawyer: A “justice is blind” blindfold.
So here’s an open thread to discuss what you want this year (besides a Skadden-sized bonus). What do you recommend giving to legal folk this holiday season?
We started getting reports this morning that Dechert let go a number of secretaries and legal assistants. But the numbers from our tipsters were low, very low. The Legal Intelligencer just reported that Dechert has in fact laid off an amazing 72 staffers.
A firm spokeswoman confirmed that Dechert has laid off 72 administrative staff across its U.S. offices. She wouldn’t get into details about which positions or how many in each office, but said the cuts were basically proportionate across the firm’s 11 U.S. offices.
The 72 administrative positions account for about 12.6 percent of the firms 570 U.S. staff members. Dechert has around 1,045 attorneys firmwide and the spokeswoman said there are no plans to cut any more staff or any attorneys based on what they know at this time.
An attorney tipster moves straight to the problem associates at Dechert are all worried about:
[I]t’s not like we can have less secretaries unless there are less lawyers…
Dechert has come to the layoff buffet early and often. In October, there was a lot of contention about how many attorneys Dechert has been stealthily getting rid of. At least the staff layoffs are being properly announced.
But then again, Dechert staff also got to feel a little bit of that “Dechert style” on their way out the door. More after the jump.
You can use Facebook to accumulate friends, poke strangers, and tag photos. And if you’re a lawyer in Australia, you might be able to use it to serve a complaint.
Our legal friends in the Land Down Under have made an interesting ruling. From the Associated Press:
A court in Australia has approved the use of Facebook, a popular social networking Web site, to notify a couple that they lost their home after defaulting on a loan.
The Australian Capital Territory Supreme Court last Friday approved lawyer Mark McCormack’s application to use Facebook to serve the legally binding documents after several failed attempts to contact the couple at the house and by e-mail.
The lien notice could have been sent by Facebook messaging–the judge specified that posting to a Wall was not kosher–but the couple got wind of the plan in news reports and took their profiles down.
We love rulings that legitimize the use of Facebook in the workplace. Next up: legal notice via gchat?
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.
I’ve been operating under the assumption that the legal layoff party of 2008 would stop in 2008. My rose colored logic has been simple. I’ve assumed that Biglaw managers can: A) count, B) add, and C) figure out a sustainable 2009 business model. If those three assumptions are true, I figured that most well managed law firms would be able to get through all of their attorney reductions in 2008 and get themselves into an appropriate position for 2009.
Flawed logic? Perhaps. It’s what the shrinks like to call a “coping mechanism.”
Of course, in making these assumptions I ignored the possibility that some firms were still using “operation ostrich”: a heads down, asses high approach that gleefully exposes tail feathers to the still spinning wheel of economic destruction.
The Legal Intelligencer today warns us that the first quarter of 2009 could see more chopping at firms that are still trying to ride out the storm:
Move over, New York — it’s Philadelphia’s time in the hot seat. Legal blog Above the Law was abuzz with reports and rumors Monday that two Philadelphia firms saw associate cuts with one of them laying off staff as well. And according to one consultant, the Pennsylvania market could most likely expect to see more attorney cuts in the new year as firms wait out the holiday season.
After the jump, the new cuts in the new year aren’t likely to be localized just to the Philadelphia area.
* Budweiser (Bud) beer cannot corner the market on it’s name anymore. The EU high court took away Anheuser-Busch’s famous trademark–a big win for Czech beer company “Budvar”. [Associated Press]
* The Supreme Court breathed life in to the lawsuit of former Gitmo detainees, British Muslims who want top officials (including Donald Rumsfeld) held responsible for their torture at the prison. [The Los Angeles Times]
* Bankruptcy filings are up 30% this year, and New York filings are happening at a faster rate than the rest of the Nation. Maybe this time Wall Street is suffering more than mainstreet? (doubtful). [The New York Times]
* Madoff’s lawyer John R. Wing, known as “Rusty” says Madoff’s family had nothing to do with the ponzi scheme (am I the only one who thinks of the Fonz every time I hear ponzi scheme). [The New York Times]
* A Senator says the U.S. Treasury may adopt a plan that would force automakers into bankruptcy if they can’t make it without the government’s help. [Bloomberg]
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