Last Monday, Dewey & LeBoeuf informed the world that some of its partners would be receiving less money. This past Friday, The Recorder reported that DLA Piper is also officially reducing partner compensation:
DLA Piper informed all of its U.S. partners on Friday that it will reduce pay for most of them by 11.5 percent in 2009, while strong performers will get more money.
I guess it was only a matter of time before the horrible economy started taking a bite out of partner draws:
DLA’s pay cut is part of an annual budget projection process and is not related to the firm’s 2008 results. The firm ended 2008 with zero debt and will end 2009 with zero debt, said O’Malley.
As opposed to 2008, when the economic downturn was not full blown until the fourth quarter, firms are preparing for four quarters of dried-up demand in 2009.
Of course, after the jump we have to get into the obligatory “but things here are just great” rhetoric.
Just as notably, the firm asked a boatload of income partners to make capital contributions to the firm back in November.
Given all that background, this statement from managing partner J. Terence O’Malley isn’t all that surprising:
“We are very pleased with how we are performing relative to the competition, but it’s a tough economic environment,” O’Malley said.
“We are conservatively budgeting this year to be a down year.”
It seems that like a lot of firms, DLA is just “very pleased” to still be around. There are a growing number of firms that simply can’t say that.
DLA Piper to Cut Most Partners’ Pay [Law.com]