Salary Freeze

Nationwide Pay Freeze Watch: Pillsbury Two-Step

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Last week, Pillsbury was busy throwing mama from the train. But underneath the layoff news, the firm instituted other cost cutting measures. On Tuesday, Pillsbury decided to freeze salaries.

Pillsbury is one of the firms with a two tiered associate payscale. A tipster reports that a number of Pillsbury associates were already receiving below market pay, before last week’s freeze:

[I]n June of 2007, Pillsbury decided to meet the Biglaw salary raises that occurred at the time (albeit they were a later mover on the raise issue). However, they also said in June 2007 that new requirements were tied to the salary increases. Departing with prior firm practice, any associate who did not meet a minimum of 1800 billable hours for 2007 would be advanced in class year, and would be advanced in their billing rate, but would be “held back” in salary step increases.

The 2007 policy was made less onerous because there was an easy way for associates to make that money back in 2008:

If the associate that was “held back” in pay for their 2007 numbers billed 1950 hours or above in 2008, they would (a) be advanced in class and salary to become equal again to their actual class year, and (b) would be given a “true up” bonus for 2008 whereby they would be paid the difference in salary they were supposed to be making during 2008, but did not because they were held back in terms of pay.

Pay plans made in 2007 are about as relevant as Adrien Brody standing on the same stage as Robert DeNiro and Anthony Hopkins. It’s nice for context, but painfully out of place given current standards.

After the jump, we look at what Pillsbury is doing now.

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We don’t have the full Pillsbury salary freeze memo. But tipsters report the salient details. Here are some things that Pillsbury associates learned on Tuesday:

We appreciate that eliminating step increases this year will give rise to certain questions related to the application of our existing “1800 hour rule….

* Attorneys who achieved less than 1800 billable hours in 2008 will remain at their 2008 base compensation level in 2009.

* Attorneys who achieved less than 1800 billable hours in 2007 (and thus were not advanced with their class in 2008), but who achieved 1800 or more billable hours in 2008, will have base compensation in 2009 equal to the base compensation level for their class.

* Attorneys who achieved less than 1800 billable hours in 2007 (and thus were not advanced with their class in 2008), but who achieved 1950 or more billable hours in 2008, will be paid a bonus with respect to 2008 performance to ‘”true up” their salary level for 2008, and for 2009 will have base compensation equal to the base compensation level for their class.

It’s really nice that Pillsbury kept its 1950 hours bonus promise to those associates who were lucky enough to make their hours in 2008. If you hit 1950 hours in 2008, you’re in the same boat of any other associate that has had their salary frozen.

And if you billed less than 1800 hours in 2007 and 2008, well, you’re probably just so happy to still have a job right now you don’t know what to do with yourself.

The memo did not say how many hours people have to bill in order to keep their jobs. We’ve got sources strategically placed at Penn Station, Grand Central Station, and Port Authority in case any news breaks.

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Earlier: A Funny Thing Happened on the Way to New York (Or: Pillsbury associates, brace yourselves.)

A Funny Thing Happened on the Way to New York Pillsbury Admits Gaffe — and Looming Lawyer Layoffs

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