Earlier today, associates at K&L Gates attended a town hall meeting with Peter Kalis, chairman and global managing partner. Kalis provided an overview of where the firm stands and announced steps that will be taken to deal with the recession (in addition to skimping on toilet paper).
Several sources sent us reports of the proceedings. Here are highlights:
Possible layoffs: No associate layoffs — yet. At the end of February, management will evaluate how things stand at that point, and there may be a reduction in headcount after that.
Salary freeze: Salaries will be frozen for all associates. This decision will be reviewed at the July Management Committee meeting (so think “slurpee freeze”). According to Kalis, clients were asking him why K&L Gates hadn’t frozen salaries, in response to the freezes of other firms.
Delayed start dates: Incoming first-year associates will have their start date deferred to January 4, 2010. They will get health care prior to that. But Kalis did not say anything about a stipend (a point several sources noticed). The First-Year Academy (training for new associates) and the Associates Symposium have been canceled.
Billing rates: The firm will be raising billing rates (interesting, in light of the salary freeze — pay associates the same, but charge clients more for their services). According to Kalis, rates at K&L Gates are currently lower than those of peer firms, so this is a chance to catch up.
Firm finances: K&L Gates is one of only two Am Law 100 firms with no debt, per Kalis.
That’s the hard news. Colorful quotes and fun stuff, after the jump.
Peter Kalis sounded some gloomy notes (and some tipsters appreciated his candor). In describing the global economy, he said: “When I look up at the sky in London, I see predatory fowl circling…. Financial institutions are devouring capital as a carnivore does meat.”
How to stave off the birds of death? “Although I don’t expect any wild applause from this audience, our focus will be on profits per partner,” he said. According to Kalis, maintaining high PPP is the way to keep top partners at the firm — otherwise, K&L Gates could go the way of Heller Ehrman et al.
Kalis also made martial comparisons: “It’s a war out there. And I would want to go to war with no other group [than the partners and associates of the firm]…. I have great confidence in you and know that you will not let us down, and we will try not to let you down.”
There was a funny exchange about layoffs (well, as funny as such a subject can be). In response to questions about possible layoffs, Kalis said that at the end of this month, the firm would take whatever steps necessary to ensure “proportionality” between staffing and client needs. One associate then asked: “You’ve mentioned contractions, but are there any areas of growth?” Kalis responded: “For clarity, I did not use the word ‘contraction,’ I said ‘proportionality.’” This exchange generated laughter in some quarters.
Kalis stressed — twice — that if there are any mass layoffs, the firm will comply with all laws regarding such actions. Audience members viewed this as an assurance that K&L Gates would comply with its WARN obligations (and avoid WARN lawsuits).
A final tidbit from a tipster: “Oh, and the best part for you. He said that he’s been traveling and reading the latest news on [other sites] and Above the Law. Kalis reads ATL!”
Earlier: Prior ATL coverage of K&L Gates