Salary Cuts

DLA Piper Salary Cut Follow Up

Salary Cuts.jpgOn Friday, we reported that DLA Piper cut associate salaries by ten percent across the board. But we now know that ten percent was just the starting line for associate salary cuts.
Friday, the firm memo included this language:

Adjustments to all associate salaries at other class levels will be determined and communicated on a case-by-case basis based on class year and performance levels.

It appears that the case-by-case consultation resulted in salary cuts of up to 20% for associates that were not on pace to make their hours. Many tipsters brought this to our attention, as well as some interesting commenters:

Elie/David – what I hope is not overlooked in DLA’s move is that they made a calculated move to mislead abovethelaw and its readers by saying that starting salaries were being lowered to 145. That’s not true. A number of first year attorneys salaries were lowered to 128k. There are 3rd years making 136k. Their efforts to cover for there salary reductions should be given more exposure.

Other commenters made the point that the decision was all about hours:

You could get great performance reviews/make in excess of your budget for years/ be well regarded/ do pro bono work etc, but still the ONLY thing that was taken into account when cutting salaries was whether you were on pace for the first 4 months of this year. The published memo does not disclose this. You could be a pretty average associate and happen to have been staffed on a doc review for the first 4 months or hoarded your work and hey suddenly you are getting paid more than other associates.

Tipsters emailed us, texted us, even called us on the phone to give us details about the 20% cut. We get into the extra news after the jump.

DLA Piper logo.jpgOne issue that really got our tipsters angry is that first years who received a 10% cut are now making more than second or third year associates who had been slow for the first part of the year:

* If you were on pace: 10% cut
* If you were off pace: 20% cut
These numbers were calculated after subtracting off pro bono hours, which we are told will be counted toward our billable hour requirement up to 100, or over 100 if they are “signature projects.” Not so.
This was without exception. The email they sent about $145k, and a “case by case evaluation,” was pretty much irrelevant. I say … that the cuts today meant that most first, second and third years (at least in my office, in the two practice groups i talked to) went BELOW $145K. Whatever they were making — $170k, $180k, $200k — 20% was cut off.
Assuming that our summers (who start in June) will make $145k, they will make MORE than MOST OF THE FIRST, SECOND AND THIRD YEARS in our offices. Most went to $120-140k. First years who were on pace stayed at $145k, meaning that they now make more than second and third years who were off pace. Seriously.

These deep cuts also took its toll on people working in secondary markets. Suffice it to say that in some of DLA Piper’s smaller offices, a 4th year who got nailed with a 20% cut is making less than summer associate in NYC this summer.
If you put the salary cut situation in context with other cost cutting moves DLA has taken (like freezing salaries), you’ve got some people who are very, very angry:

6th year associate at DLA. The firm screwed me on my bonus earlier this year – giving me and everyone else the very bottom of the bonus range. I estimate that I lost at least 20K on that cheap ass move. Then the salary freeze, another 10k. Now a 20% reduction for another 34k in losses this year. These bastards have screwed me out of 64k this year (and I am not in NY or LA). Yet they have yet to reduce the obscene rates that the firm charges.
I got my memo from some flunky. The memo informed me of my new salary “pursuant to our e-mail regarding the new Associate Pay structure.” I didn’t receive that jewel of an e-mail for several more hours. Classy.
My practice group leader was conveniently out of the office.
I hope this place dies.

But aren’t these moves better than layoffs? DLA has already laid off 180 U.S. attorneys and staff and another 124 in the U.K. (remember, Thursday’s official dismissal of U.K. personnel was simply the end of the redundancy consultation DLA Piper started in February, not a second round of London layoffs).
As one commenter put it, salary cuts might be better than firing people:

maybe they should have done the prestigious thing: fire ten percent of all associates and claim it was a performance based thingie…but not bother to explain to clients why ten percent of the firm was just discovered to be f***** up?

These are tough times for everybody. Will DLA take a recruiting hit for cutting salaries by up to 20% based on hours? Or is it still better than an outright layoff?
Earlier: Nationwide Salary Cut Watch: DLA Piper Joins the Party
Nationwide Layoff Watch: DLA Piper Lays Off 180
International Layoff Watch: DLA Piper Cuts 140 U.K. Employees

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