McDermott Will & Emery has already announced that associates will be eligible for their bonus “advances” that they were already promised. We reported that MWE associates can expect $10K to $20K now, while the final numbers will be released in March. At the time we said:
The other wrinkle here is that MWE is leaving the door open on what their “final” bonus package will look like. They could match last year’s market, or not. There is a lot of time to read the market between now and March.
Having already announced this good news, it was a little weird yesterday when McDermott announced the same news again. The same numbers, the same plan, the same “final decision in March” language. Did MWE management simply forget that they had said all of this before?
Not quite. Buried in the third paragraph of this “new” announcement was the line:
In addition to the final bonus determinations, Associate base salaries for 2009 will be determined and announced in March at the conclusion of the 2008 compensation process. Until then, current base salaries will remain in effect
No raises until March (if at all)? Is MWE really hurting or just really, really cheap?
After the jump, the freezing future.
As struggling law firms try to do everything they can to control costs, can we expect other firms to follow MWE? Remember, Bryan Cave already announced a similar wage freeze in November.
In October, Chadbourne & Parke announced a hiring freeze. Could pay raises be the next to go? In the memo announcing the hiring freeze, Chadbourne alluded to other cost-cutting options:
We will be issuing new guidelines pertaining to controls over Firm business expenses, including travel. We will also more closely monitor and limit certain other expenses which in a more robust economy might otherwise be acceptable We have also instituted a freeze on hiring legal and non-legal personnel…. We welcome your thoughts on other cost saving measures.
While many associates know they are getting short-changed on bonuses, how many people are cool having their class year raises delayed, or maybe even canceled?
In normal times, freezing payroll costs like MWE has done is an indication of a company in trouble. But McDermott isn’t sharing its books with us. The profits per partner number will be the next, best indication about the stability of the firm. McDermott came in with over $1.5 million in PPP in 2007. We’ll see what happens in 2008.