So far, salary cuts have been localized to mid-sized and regional firms. But it appears Baker & McKenzie has become the first national firm to slash associate salaries. A tipster reports that associate salaries have been cut between 10% and 25% for some associates at the firm.
As we understand it, associates are receiving individualized memos about their salary reductions. Salary cut decisions are being made on a case-by-case basis and it is difficult for associates to know what is going on with colleagues down the hall.
Baker McKenzie has been making all sorts of news lately. Two weeks ago, the firm laid off 124 people. Then the firm pushed back start dates until January 2010. But it is surprising to see the firm get out in front on cutting salaries while its peer firms are resisting salary cuts.
Is this another nail in the lockstep coffin? Additional details after the jump.
Our sources report that the deepest cuts were reserved for the slowest practice groups. But even within the different groups the cuts were not evenly spread around. We understand that some associates in slow groups aren’t taking any cut, while others are being scaled down by a significant amount.
We also understand that the cuts are not tied to specific class years. Some first years are taking a 10% hit, while some mid-levels are looking at a 15% salary cut.
Baker & McKenzie did not respond to our request for comment.
But if the firm is cutting salaries on an individualized basis, that quite simply means that associates in the same class year are going to be paid different base salaries. That doesn’t sound like lockstep compensation.
We don’t have any information about whether Baker is also adjusting its billing rates.