Salary Cut Watch: Chadbourne & Parke Takes a Stab at Salaries
Chadbourne & Parke has already laid off associates. It has already frozen associate salaries. So perhaps cutting associate salaries outright isn’t too much of a surprise.
Associates at Chadbourne were just informed that their salaries would be cut. But they weren’t told how deep the cuts would go. Here’s the pertinent part from the firm-wide memo:
We will be reducing base salaries of attorneys, administrative personnel and other staff for the remainder of the year, beginning with the May pay period. All personnel will be advised of the reduction to their salary. Depending upon Firm financial performance and individual effort and contribution, all personnel will be eligible to recoup all or part of the amount of the reduction in the form of a bonus to be distributed at the same time discretionary bonuses have been traditionally distributed.
That really brings a whole new (and much more terrible) meaning to the term “special bonus.”
Just like with Baker & McKenzie, Chadbourne seems to be doing more than simply cutting associate salaries. The firm is doling out different cuts to different people, and it doesn’t appear that class year has a lot to do with it. It’s another shot at lockstep associate compensation.
Has Chadbourne management been listening to The Dow is Up Guy? Interesting details after the jump.
Even though Chadbourne and Baker & McKenzie are the only Vault 100 firms cutting associate salaries (as far as we know), management at Chadbourne believes that the salary cuts are simply prudent:
Some may say we are being overly cautious in aligning our expenditures based on the assumption of no significant increase in demand through the year-end. Perhaps so, but it is our belief that it is better to be conservative. If we are wrong, and we hope we will be, we can rectify the situation by the payment of bonuses.
Will Chadbourne’s conservative approach cost the firm on the recruiting trail this summer? Unlike layoffs or associate deferrals, most top firms seem to be avoiding salary cuts (so far).
We’ll keep you posted as individual associates find out how much they stand to lose under Chadbourne’s new policy.
Read the full memo below.
CHADBOURNE & PARKE — MEMORANDUM — SALARY CUTS
As we all know, the current global recession is proving to be longer and more severe than most had forecast. Many businesses have been severely impacted and have taken steps to reduce expenditures which are many times more draconian than those which law firms generally have taken and which we, in particular, have had to implement.
The steps we have taken to date to reduce expenditures have been done reluctantly, particularly those involving personnel reductions, but have been necessary to align our resources to the demand for our services. In view of the continuing global economic uncertainty, we believe we must plan based upon the assumption that the current conditions will not reverse dramatically before year-end.
We have not reduced personnel to the extent that some of the law firms which are experiencing the same decline in demand have, nor do we want to. We have great talented people at Chadbourne and we believe that further significant reductions would be counter productive for both the Firm and our clients.
That said, as a matter of prudence, we do need to reduce expenditures further. Accordingly, we will be instituting a reduction in salaries in our U.S. offices. We are hopeful that this action will avoid the need for additional reductions in our work force.
We will be reducing base salaries of attorneys, administrative personnel and other staff for the remainder of the year, beginning with the May pay period. All personnel will be advised of the reduction to their salary. Depending upon Firm financial performance and individual effort and contribution, all personnel will be eligible to recoup all or part of the amount of the reduction in the form of a bonus to be distributed at the same time discretionary bonuses have been traditionally distributed.
Some may say we are being overly cautious in aligning our expenditures based on the assumption of no significant increase in demand through the year-end. Perhaps so, but it is our belief that it is better to be conservative. If we are wrong, and we hope we will be, we can rectify the situation by the payment of bonuses.
We are also taking measures to reduce expenditures in our international offices. The measures taken in those offices will vary in some cases from what we are doing in the U.S. offices, taking into account local market conditions, requirements and circumstances.
We thank you all for your efforts in these challenging times.
Management Committee
Earlier: Salary Cut Watch: Baker McKenzie Brings Salary Cuts into the Vault Top 50
Nationwide Layoff Watch: Chadbourne & Parke Update
(113) 
Comments
Fucking first!
jeez, i hope this doesnt become a trend.
Always good to see firms paying the lazier associates closer to what they are actually worth. LOL LAZIES !!!
Is it just me, or does that picture look like a nipple?
What's the big deal? When a business suffers major loss of income, it's normal for the business to reduce salaries and/or layoff workers. These folks should be happy they have a job and quit complaining about not liking the fact that milk is white.
Latham cut the salaries of 50% of its first years by 100%. Top that, people.
Chuck Norris counted to infinity. Twice
THE RECESSION IS OVER!
4,
What the hell kind of nipples have you been seeing? It's definitely just you.
The Dow Jones is where it was in 1997. Associate salaries should be too. Weren't large firms paying around $60,000 then? Sounds fair to me.
Chuck Norris pounds any secretary he wants to in the ass because he went to Yale without even applying.
I believe their mascot is a dinosaur turd.
-GW 1L
Coincidentally, I believe that is also our mascot now at GW
12 -- are profits per partner at 1997 levels too?
12 -- are profits per partner at 1997 levels too?
13,
I'm not sure, what does that have to do with dinosaur turds?
-GW 1L
10 -- are profits per partner at 1997 levels too?
Chuck Norris once ate three 72 oz. steaks in one hour. He spent the first 45 minutes pounding his waitress in the ass.
The Dow Jones is where it was in 1997. Partner draws should be too. Weren't profits-per-partner a fraction of what there are now back then? Sounds fair to me.
Did you guys hear about what happened to Partner Emeritus and why he has suddenly disappeared?
Ashcroft LLP to $60,000!
13/14/16 & 18: Most firms HAVE cut partner draws to 1997 levels. I think there was a story about that on here in the last few weeks.
I was laid off by chadbourne. Everyone there was nervous about it...
NY to 190!
The hired 3Ls will never make it in the door....
Is law school tuition at 1997 levels? Fuck no
Good. Lock-step needs to die. It's a stupid business idea and rewards mediocrity.
I know all this layoff and salary cut talk has been going on for some time, but now I'm starting to get seriously bummed about it and I'm considering a career change. From looking around on the Internet, it looks like there might be a market for men who ejaculate on women's faces (men's too, for that matter). Anyone know if there's money in that?
Is law school tuition at 1997 levels? Fuck no
There's good money in anything if you do it well.
Chuck Norris can slam revolving doors.
21 there was no such story because it isn't true. Most firms have not cut partner draws to 1997 levels.
27 = winner for all time
I heard Chuck Norris pees gold so his showers are literally golden showers.
Partners generally have more money in 401(k)s and other investments that have taken a beating because of the stock market, and have suffered great losses. It is thus not unreasonable for them to tie associate compensation to the stock market as well. Setting associate compensation at 1997 levels makes perfect sense.
None of us will ever step foot inside our respective firms. Class of 2009 will truly become a lost generation. Sucks to be us!
33 con't.: Of course, if the stock market goes up, that should be reflected in associates' compensation.
The "lockstep" or "cravath" model doesnt need to die, it just needs to be implemented properly. Lawyers are notoriously bad at people managing, thats why they love it. Pay everyone the same until its time to see if its time for partnership. Through some of counsel and non-equity sidetracks for those who are worth holding onto but not worthy of partnership and you have a half-decent model that has one form or another been around for 120+ years (to be fair, most of the modifications happened in the last 35).
The issue is ttt firms and flyover country firms paying new york rates. Baker botts is hot shit in the oil community, but they have no business paying ny rates. Thats why their start dates have been delayed 2 months and who knows what else will happen next. Hell, even the cali firms were over their head in trying to compete with the new york big boys. See latham. V10 rankings be damned.
And sure, lots of new york firms are cutting salaries, but who's to say that we should have been 160 in the first place.
Its an adjustment in the market. A painful one, but good lawyers will be employed and cooley grads will be replaced by raj
i went into law prior to 125k. Being 160k now is a bit much. I see that going down with maybe v10 firms holding steady.
You're off by about a decade. Starting salaries were $65,000 in 1986.
Chuck Norris drives around in an ice cream truck covered in human skulls
Chuck Norris drives around in an ice cream truck covered in human skulls
Yeah, who bumped off Partner Emeritus? He is noticeably absent today! Did he get laid.....off.
This is sure sign that demand for legal services has not picked up for Biglaw. It is also a strong sign that Chadbourne is facing cash flow issues.
We could be looking at another Thelen here.
10 - Can I buy your house from you for what it was worth in 1997?
I was just thinkin that blowhard PE hadn't commented yet. In his absence let me try:
Looks like Chadbourne & Parke are among the first to realize the economy won't recover until 2015 at the earliest. Unfortunately, they didn't take my advice completely to heart. I recommend dropping all associate salaries to zero, repealing the 13th amendment and forcing associates to work for free indefinitely. Now, if you'll excuse me, I have to go play in my own filth.
Sincerely,
Partner Emeritus
The ship be sinking...
37: From http://www.law.com/jsp/llf/PubArticleLLF.jsp?id=1170842572765
"By contrast, associate salaries in 1996 at the nation's largest firms equaled $70,000, or 14.3 percent of the profits per partner, which that same year averaged $489,753 among the Am Law 100, the 100 highest-grossing firms."
Sorry, I was off by $10k. Associate starting salaries to $70,000, then.
The Big Bang was really just Chuck Norris round house kicking God in the face.
If you end up on an island that is not claimed by anyone with a hot girl and you are both american citizens and you rape her, can you get prosecuted?
For those who seem to have survived the initial waves of layoffs at their respective firms, this new trend is awful news.
There are enough crap firms with no business out there who have to cut salaries in order to survive that other financially sound firms will be able cut salaries and take cover under a market justification.
I want to know what happened to PE too. He had a good shtick going.
Chuck Norris is God's bodyguard.
Almost, 42. But home value isn't a good measure of where associate salaries should be. The fortunes of corporate law firms have always been tied to Wall Street, and associate salaries should be set accordingly as everyone tries to ride out this storm. Are you listening, law firms? Associates everywhere to $60,000 (or $70,000).
Go ahead and cut our salaries, but you'll soon be cutting our billing rates too. Clients aren't paying the bloated rates anymore.
Please remove comment 47.
Right you are, 34, right you are.
Cutting salary from staff to attorneys is a new precedent setting low blow to all employees of law firms! Chadbourne is first.... who's on second?
Right you are, 34, right you are.
Once Cap and Trade is implemented, salary cuts will be a thing of the past.
51 - Are you saying that partner profits, billable hour requirements, office lease rents, health care costs and billing rates all go to 1997 levels, too? That's the only way your post makes any sense at all.
51 - Are you saying that partner profits, billable hour requirements, office lease rents, health care costs and billing rates all go to 1997 levels, too? That's the only way your post makes any sense at all.
How many times is too many to pound my secretary in the ass in one day?
45 -- PPP at the nation's largest firms are many times that amount now, and at the best firms the partners make much more than seven times the amount of the associates. Although, at a lot of V100-200 firms, I imagine the ratio is still around 7 to 1.
51 - Are you saying that partner profits, billable hour requirements, office lease rents, health care costs and billing rates all go to 1997 levels, too? That's the only way your post makes any sense at all.
51 - Are you saying that partner profits, billable hour requirements, office lease rents, health care costs and billing rates all go to 1997 levels, too? That's the only way your post makes any sense at all.
51 - Are you saying that partner profits, billable hour requirements, office lease rents, health care costs and billing rates all go to 1997 levels, too? That's the only way your post makes any sense at all.
51 - Are you saying that partner profits, billable hour requirements, office lease rents, health care costs and billing rates all go to 1997 levels, too? That's the only way your post makes any sense at all.
RIP Partner Emeritus. You will be missed...
43 - That really was a good imitation!
58/59/62-64: Sure, there's room to argue that other adjustments should be made, but that starts us down the proverbial slippery slope. We need a bright line here, and associate salaries are the costs best equated with the performance of the stock market. Of course, that means that, if and when the stock market goes up, first year associates should receive somethnig over and above the $60-70K they should be receiving now. As it is, they're being paid as though the stock market had more than twice the value that it actually does.
P.S. -- I always enjoy duplicate comments on this site, but posting a comment five times is truly an impressive feat!
60- When Chuck Norris tells you to stop pounding your secretary, stop pounding. Until then, pound away, my friend, pound away.
1. Regarding the ATL internship, why did you prohibit comments in that thread?
2. Is the internship 420-friendly?
-MIke P.
68: Everything appears to be in order here. Done and done.
--Chadbourne & Park Management Committee
If salaries go down to 1970 levels, rents, mortgages, credit card payments, etc. should go down to those levels too!
Ah, Chadbourne. A true house of horrors. When I worked there, they'd say that you didn't have to work on tobacco defense, and then they'd make you work on it anyway. They routinely conducted stealth layoffs even when the economy was good. Who can be surprised that they'd pull a stunt like this? They've never given a darn about their associates, and they never will.
Man, I sure am glad I went in-house.
While most of you spend your days wasting away your existence on this blog, I had an opportunity to meet with economic advisors that are counseling the firm on tightening up our operations. Salary cuts are on the table. Firm management is waiting for at least two peer firms to announce salary reductions and we will follow suit. Layoffs are continuing on a rolling basis so as to deflect negative publicity about "massive" layoffs conducted in rounds. Several leeching non-equity partners have been placed on notice. We are trimming the fat and some of you won't make the cut. Now please go back to arguing about inane topics such as whether NYU School of Law is really a legtimate top school.
By the way, can someone let me know when it is 4:20?
-Mike P.
By the way, can someone let me know when it is 4:20?
-Mike P.
PE -- Welcome back! As usual you are in good form. Some of us thought you got laid........off.
Just because a failing firm like Chadbourne is cutting salaries, it doesn't mean that this will become standard practice.
Thanks Google:
Harvard: The Law School's tuition for 1997-98 will be $22800
Michigan: 1997-1998 $17,148 (in state) $23,148 (out of state)
BYU:1997-1998 Full-Time $2,475(LDS) $3,715 (non LDS)
PESA!!!
Partner Emiritus Strikes Again!
79, well, that's what happens in a recession: it gets more expensive (i.e., higher tuition) to make less money (i.e., lower associate pay).
There are no firms doing well. Only firms that Chuck Norris has allowed to survive.
PESA!!!
Partner Emiritus Strikes Again!
PE - I was hoping to never see your BS here again. Please punch yourself in the face and then go back to preparing for your 1L exams.
The comments about returning to '97 salary rates are plain stupid and born out of jealousy. Please stop.
It takes Chuck Norris 20 minutes to bill 5 hours. Latham tried to hire Chuck Norris, but he slammed that revolving door in their face.
Q: What is the difference between Partner Emeritus and an Iraqi journalist?
A: Two shoes.
Much has been made on this board of Chuck Norris' penchant for pounding secretary's from behind, but little has been said of Chuck Norris' tendency to wear a live rattlesnake as a condom when he does it.
Which firms are still firing? Or are lay-offs finally done.
19, 40, 43, 49, 66, 67, 74, 77, 80 = Partner Emeritus
self troll.
PS, yes, it's a nipple. It is mine.
even assuming, arguendo, that that is a nipple, the nipple's owner should not get a salary cut just because "it is better to be conservative." He/ she should get a merit-based raise, a fortiori
89 = Partner Emeritus
87- sorry to correct you, but Chuck doesnt wear a rattlesnack when pounding a secretary, its a 10 foot python, and he stretched the python.
A question to the panel: I put a deposit down at BU, and am wait-listed at Northwestern. What do you think my chances are at Northwestern, with not pull whatsoever?
I am a Harvard grad, with a masters in Eastern Studies, also from Harvard? Any suggestions? Please don't tell me to go to China, I'm sick of China.
93- little to none. with this economy, everyone is going to accept.
It's a good day to be a rich fat partner, I tell ya.
93 - I don't know your grades or LSAT score so it's hard to say. I hope you get into Northwestern but if not work really hard at BU (hopefully make top 10% and law review) and you should be fine if you want big law. Oh, and btw, don't go to law school unless you really really want to be an attorney. If you just can't think of anything else to do, keep thinking.
Masters in Eastern Studies = pwned
I'm not saying this in any kind of arrogant way or anything, but I have never even heard of this firm.
Partner E: The Senator said you attended a lesser state institution for law school, some would call it today a TTT. What say you?
73 - If you get fired when times are good, it's for performance. There were no "stealth layoffs" in 2005.
Dear Chadbourne & Parke Associates:
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Operators are standing by!
Cap 'n Trade = socialism
Any NY firm doing this is going to be avoided by associates like the plague and is going to get a reputation as a second-rate firm. The executive committee at C&P is either just plain stupid (lawyers ARE hideously bad managers) or really desparate because they see a potential dissolution in the cards. How are their clients going to give them any matters of significance when they are sending up a giant red flag like that. I think it is time to start the C&P deathwatch.
10 and like minded commenters:
Why should associate salaries be tied to the performance of a stock market index? Unlike partners, associates didn't agree to have their salaries exposed to market risks. You paid top dollar to get the top law students. Don't be surprised when they leave to go to a firm that can actually charge the rates that are commensurate with those salaries, instead of (as have most of the firms that thought they could be "market followers") passing off 100% of the marginal increase in cost from associate salaries to clients in the form of higher billing rates.
So with the salary freeze and the reduction in pay, a 4th year at Chadbourne makes less than a first-year at another firm (157,5000 vs. 165,000)?
ELIE, you do realize that "tak[ing] a stab" at something means making an attempt, right? It doesn't make much sense to say that C&P is attempting or trying salaries. Try "takes a bite out of" or "takes a cut" next time.
You try to use metaphor (and/or the English language). And you fail.
Or "whacks." I'm sure you're intimately familiar with related usages.
1977 Harvard Tuition - 3,500
1977 Michigan Tuition (Non Res) 3,500
1977 NY Starting Salary 25,000
1977 LA Startong Salary 22,500
1977 Avg Per Partner Profit 5 Leading Wall St Firms - Apprxomately $200,000
108 - oh, snap!
I hate lawfirms.
#96. Thank you for your advice. I am thinking hard about everything these days.
SECOND-RATE FIRM CUTS ASSOCIATE SALARIES, ADMITS INFERIORITY, ACCEPTS FUTURE INABILITY TO RECRUIT TOP TALENT
SECOND-RATE FIRM CUTS ASSOCIATE SALARIES, ADMITS INFERIORITY, ACCEPTS FUTURE INABILITY TO RECRUIT TOP TALENT