Nationwide Pay Freeze Watch: Pillsbury Two-Step
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.
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.
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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Comments
Your Oscars joke sucks. FIRST!
Almost first... :(
we are all so fucked it's beyond belief. These are dark times.
Doesn't this memo directly contravene Pillsbury's policy of announcing all major firm news to hapless bystanders via cellphone shouting in public places?
3-Pull yourself together man.
Pillsbury is still doing better than some. They are probably laughing about the partners that left them 2 years ago and went to DLA for higher comp - without bringing DLA much business and contributing to that firm's downfall.
I like the Oscars joke. Nice work, Elie.
3: It's a lot worse than that.
Pull myself together? My family net worth has been cut in half and now it is likely my offer will be revoked. Fuck off.
Elie, that last line is great. Nice work.
Why would a firm pay more money, either in terms of a true up bonus or by raising the salaries to the top billing associates? Applying yesterday's management in today's environment is like the General who fights the last war. Take a lesson from Pete Kalis and his top Am Law piers. You can get away with screwing even your top billers now, so take advantage while you can. What, you think those associates that were monitarily rewared for billing 1950 or better are going to somehow be motivated? This is the time of "just be lucky you have a job." Dough boy "incentive" managment is a joke.
6 - Pillsbury is not doing better than most; it's just taking a little longer to die. It's been on life support for years.
@9....booo hoo..suck it up....be a man...stop crying...you are not the only one hurting
9 - A lot of folks have "family net-worths" that were around the "zero" mark, or below, before all this started; so, yeah, pull yourself together, you over-privileged ass
Dude, 9, you're being very un-Dude. Pour a white Russian, light one up, and just abide.
13: 9 is a woman, you IDIOT!
@9 --
Who the hell talks about "family net worth"? What're you, a Vanderbilt or something? I'm sure you've got enough squirreled away in the servants' quarters to last until the next Republican administration.
screw Pillsbury, what about Sullivan & Worcester
9 here: you don't understand -- if my offer gets revoked, I will not have money to fucking eat! What am I supposed to do then besides off myself?
The Management Committee would like to announce that all remaining associates will be required to contribute capital for zero equity stake and a chance at keeping their jobs. That is all.
20: That's what I'm talking about.
--11
Forget the train stations, why not just put people outside 1540 Broadway to stalk partners all the way from the office?
Wow, 9, have you considered therapy? I mean, if you're that tightly wound, the pressures of a legal career will put you in the ground by your 40's. Why don't you follow 15's advice, and maybe drop some applications if you're so worried.
agree with 10. elie you are definitely coming into your own, good humor.
The ship be sinking...
9 here again: I think you're all still in denial about what is happening. Wait 6 months, and then we will see who is overreacting.
9, you're forgetting that attorneys are still some of the most highly-educated, marketable employees in the country. Undoubtedly, some champagne dreams have turned into Miller High Life hangovers, but when was the last time you saw a guy on the street with a sign saying "Will litigate for food"? The vast, vast, vast majority of lawyers will land on their feet, and in a few years the salary wars will be back on. Your net worth might even rebound.
27 is right. This economy is going to hit recent college grads much harder than the legal community. The downsizing of law firms is going to push junior associates into non-law jobs that would ordinarily have gone to entry-level college graduates. Those kids are the ones who are really screwed in the job market.
#9 - If the poor would rather die, perhaps they should do so and decrease the surplus population.
Biglaw Partner
It is a really funny scheme. God bless us!
9 here again: My family's net-worth is slip slidin' away and that just makes me sad, okay?! On top of that, if my offer gets revoked, I don't know what the hell I'll do.
9, do you always throw up your hands in defeat when faced with a tough situation? Maybe law isn't for you - most clients want someone a bit more aggressive in the problem-solving area. Perhaps a nice job in a flower shop would be more to your temperament.
9, quit being a p*ssy. If you need money for food, get a job bartending. Unlike you smart law students with your finger on the pulse of the economic crisis, we lawyers with a mortgage and a kid to feed aren't at all paying attention to this mess? No, I'm pretty sure that it is on our minds every single day. However, I'm not about to start pissing my pants and crying in my beer every time someone tells me that the sky is falling. Law firms are terrible at predicting economics (see the massive summer associate classes of the past 3 years). So, in effect, they are basically a trailing economic indicator and mass layoffs at law firms could be a sign that the recession is half over. Stocking up on water and ammo isn't going to get you anywhere. Calm down, start planning worst-case alternative career strategies and lock down a tight budget. We'll all get through this together...
9, quit being a p*ssy. If you need money for food, get a job bartending. Unlike you smart law students with your finger on the pulse of the economic crisis, we lawyers with a mortgage and a kid to feed aren't at all paying attention to this mess? No, I'm pretty sure that it is on our minds every single day. However, I'm not about to start pissing my pants and crying in my beer every time someone tells me that the sky is falling. Law firms are terrible at predicting economics (see the massive summer associate classes of the past 3 years). So, in effect, they are basically a trailing economic indicator and mass layoffs at law firms could be a sign that the recession is half over. Stocking up on water and ammo isn't going to get you anywhere. Calm down, start planning worst-case alternative career strategies and lock down a tight budget. We'll all get through this together...
9, quit being a p*ssy. If you need money for food, get a job bartending. Unlike you smart law students with your finger on the pulse of the economic crisis, we lawyers with a mortgage and a kid to feed aren't at all paying attention to this mess? No, I'm pretty sure that it is on our minds every single day. However, I'm not about to start pissing my pants and crying in my beer every time someone tells me that the sky is falling. Law firms are terrible at predicting economics (see the massive summer associate classes of the past 3 years). So, in effect, they are basically a trailing economic indicator and mass layoffs at law firms could be a sign that the recession is half over. Stocking up on water and ammo isn't going to get you anywhere. Calm down, start planning worst-case alternative career strategies and lock down a tight budget. We'll all get through this together...
6= person who got left behind by the people who left for DLA. Don't be bitter.
Well said 33-35.
This post leaves out the most "salient" part of Pillsbury's salary policy for 2009. Yes, there is a freeze in effect. But any associate eligible for a step increase who makes their hours (1950) will get a "true up" bonus equal to their step increase. Pillsbury's "freeze" is a deferred raise if you make your hours.
38 is right. if you make 1950 in '09 you're thawed.
Kinda like those oh so delicious Toaster Strudel Pastries or even better yet, like Totino's Pizza Rolls.
Pillsbury bonuses include thawed pizza rolls. That's still better than Thelen.
Even assuming you bill 1950 hours in this market (a tough nut in Corporate), is that figure "billable time submitted", "time actually billed to the client", or "time actually paid by the client". Don't think those figures are even going to be close to eachother in 2009. Finally does the 1950 include firm time for research and biz dev? What about pro bono?
There's so many games a firm can play to cut the percentage of associates that would qualify for the clawback that I'd be nervous if my hours weren't closer to 2050 or 2100.
41 - 1950 means the same definition Pillsbury has always applied - client billable, pro bono, and other firm approved work. Does not include business development. What gets billed to client, and what client pays, is not relevant to that calculation.
The economy will not reboud you classless asshats....so dont cry in your beer...keep plugging along...there won't be shit left in about 15 months. F doom and gloom thats reality. Were printing money people, the dollar is devaluing by the day, the jobless claim will hit 15% by mid year...Lawyers will have jobs but not legal ones...See you all at the Macy's shoe department.
-- Ray S. Ipsa
Macy's isn't hiring.
Ray S. Ipsa. That's cute. "Good one."
Footlocker?
Pillsbury just tapped from strikes. You tap from strikes, you're a little bitch. That's what I think.
Question: If you are splitting your summer with one firm but in two different offices when are usually told if you will be receiving an offer/no offer? Is it at the end of your time with the first office or do they wait until you have finished with the second office. Thanks in advance.
Elie making an Oscars joke is about as funny as blah blah blah poopy butt blah blah. It's nice for context, but painfully fat given current standards.
pillsbury partner on the train:
http://www.youtube.com/watch?v=Xut__-uXG8U&feature=related
FAT CLAMS!!!!
9, nice job creating your own one-man/woman play on the board.
#50--Hilarious. Thank you.
I'm surprised that ATL has mentioned this story: http://www.chicagotribune.com/business/chi-biz-muc-shelist-law-partner-pay-cut-feb23,0,3996915.story
And, yes, I know, Chicago = TTT to many of you, but since ATL covers firms I've never heard of, there's no reason not to report that Much Shelist is cutting attorney pay by 10% until May 31st, and that Neal, Gerber is laying off roughly 10% of its attorneys.