Is promising associates that you won’t kick them to the curb the new trend? Vinson & Elkins had an all associates meeting yesterday, and managing partner Joseph Dilg assured associates that the firm would not resort to layoffs.
Instead, Dilg told his loyal following that the firm would look to shed $40 million in operating expenses in a variety of ways. A tipster reports:
The firm is going to cut at least $40 million in costs by reducing staff bonuses, no longer reimbursing out of town CLEs, making us pay for our own cell phones on our blackberries, waiting to upgrade computers and a long list of other cost-cutting measures.
That is on top of the pushing back the start dates on incoming associates. Texas Lawyer reports that 3Ls received the news last night:
V&E hiring partner Thomas Leatherbury of Dallas says the incoming associates were notified last night that they can choose a new start date of either Nov. 2 or Jan. 4, 2010. He says “either start date is fine,” but the firm wants the new associates to talk to the practice group leaders and department heads in their areas to “get some input” before making a decision. The Houston-based firm is offering an incentive for the Jan. 4, 2010, date: a $10,000 salary advance the associates will not have to repay.
Tipsters also report that even bigger changes could be coming to V&E down the road. Details after the jump.
It doesn’t appear that Mr. Dilg told everybody that V&E has “no debt,” which is probably encouraging. But according to our sources, he did indicate that associate compensation would have to be addressed at some point:
Joe Dilg said there could be major changes to the associate compensation structure. They want to get rid of the deferred compensation structure and change bonuses so they are more aligned with firm performance rather than individual hours. We will be notified by 5/1 as to what exactly will happen.
Cherish these April paychecks Vinson comrades, because it doesn’t look like the May checks will be quite as heavy.
However, because of the no layoff promise, V&E associates are upbeat:
The general mood is that things definitely could be worse, and the firm seems well-positioned and to have a good plan for weathering the current storm.
If this market has taught us one thing, it’s that things could always be worse.
Is anybody else sitting on a promise not to be canned? Send in your assurances to tips.
V&E pushes back first-year associates’ start date [Tex Parte Blog]
Earlier: Cost Cutting At Schiff Hardin