Salary Cut Watch: Ballard Spahr Makes Personal Decision About Personnel
More evidence of deflation in the legal market comes from Philadelphia. Last week, Ballard Spahr decided to cut associate salaries. Tipsters report that the average cut is 14%, but each individual salary cut is based on class year and other factors. According to one source:
Ballard Spahr cut associate salaries firmwide between approximately $19,000 and $30,000 per year (senior associates being cut more both on a percentage basis and actual dollar basis than junior associates) effective June 16.
The firm would not confirm or deny these reports. Instead a firm spokesperson told Above the Law:
The firm considers compensation a personnel issue. And corporate policy is not to discuss personnel issues with the press.
More details, and an update, after the jump.
As we understand it, Ballard Spahr sent around individual memos explaining the cuts to its associates. At this point, associates aren’t really sure if the firm cut salaries in a lockstep fashion, or if some people are taking a bigger hit within the same class year.
Update (2:21): A source shared the new Ballard Spahr salary scale with us. Essentially, Ballard is moving to a three tiered system. We’re not sure how mid-level and senior associates will like it:
Year Old New
2008: $145K $125K
2007: $145K $125K
2006: $149K $125K
2005: $153K $135K
2004: $157K $135K
2003: $161K $135K
2002: $165K $148K
2001+ all at: $148K
There is a firm-wide meeting scheduled for later this week to discuss the pay cuts.
Like many firms that have cut associate salaries, Ballard management suggested that associates would be able to make the money back come bonus time. But tipsters we spoke with are not holding their breath:
The memorandum contained vague statements that the cut may be offset by a larger bonus program — but was clear that there were no promises being made. That is of little solace as last year’s bonuses were cut by 60% from the normal levels.
As usual, salary cuts seem better than layoffs. Unfortunately, some tipsters believe that Ballard is conducting layoffs in a stealthy manner:
Ballard Spahr’s Philadelphia office is in the process of performing ‘stealth’ layoffs in the guise of mid-year performance reviews. I am not certain if this is happening in other offices or not. … at least 4 or 5 other attorneys in their corporate department. Apparently the unfortunate associates at Ballard are being given severance for two months, and that’s it.
We haven’t been able to speak with an associate who has been a direct victim of these alleged layoffs, and there are all sorts of reasons that four or five people could leave the firm.
Either way, we wish our Ballard Spahr friends the best of luck. The economy can’t keep throwing ballast overboard forever.
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Bad news
"Either way, we wish our Ballard Spahr friends the best of luck. The economy can't keep throwing ballast overboard forever. "
Damnit, stop saying this! We DO NOT wish our "friends" the best of luck. On the contrary, many of us are delighting in their pain.
I've been wondering whether the ship is still afloat and, if not, how much farther it has to sink.
Anyone know?
Thanks in advance.
A ship analogy? That's novel. Got any titanic jokes?
Given the 24% drop in PPP and the fact many of the associates bring home more than half what the partners did, this one makes a lot more sense than most....
Fuck yo couch, Ballard!
Fuck yo couch!
Ballard Spahr should just do everyone a favor and pull a WolfBlock. What losers.
Ballard Spahr should just do everyone a favor and pull a WolfBlock. What losers.
Right on, 8.
Ballard Spahr needs to understand that Philadelphia is irrelevant to the outside world, and just fold like peer loser firm WolfBlock.
The sooner, the better.
Given that I have $250,000 in debt and no job, I would much rather engage in witty repartee with Baron Harkonnen before he politely tells me that he's poisoned my soup and that I have five minutes to die and that he'll bugger me while doing that, than work as an associate in Ballard Spahr.
I went hiking once in mountains and got a very sharp ballard spahr in my boot. It was awful. It got infected and then I had to saw my own foot off with a rock to save my life
salary cuts - coming to a theater, er, firm near you this summer! the days of TTT paying the same as davis, sullivan, simpson, and the like in nyc are over.
how is babby formed?
Ballard Spahr -- Instead of screwing clients, we'll screw associates!
4:
In the immortal works of Michael Ray Richardson:
The Ship Be Sinking
Ballard partners have correctly determined that their associates are to blame for the huge drop in PPPs the firm suffered. Now those associates must be punished.
This will have no impact on Ballard's ability to keep and attract talent.
This is sadly not surprising. The firm is obviously making a concerted effort to get rid of mid-level and senior associates. This is the second round of stealth layoffs. The first occurred in January with mostly senior associates given some number of months to find a new job - of course, they still needed to keep billing.
Ballard Spahr -- We keep our balls in your mouth and spank on you.
how much does a 7th year at a big law California firm make?
Who wants a Fresca?
Is Michael Ray Robinson in the house? If he is I would like to get his expert analysis on whether or not this ship is sinking, and how far it may sink?
-Denny Crane
I bet the Personnel staff want to get Personal with their staff at the Ball Spahr
Wow, talk about compression! Max associate salaries of $148k! The most senior associates get cut to $3k more than brand new first year associates were making before the cuts! That is the most compression I have ever seen at a law firm.
18 - We make 650k/yr w/o bonus.
Guys at my high school used to get into personal Ball Spars with their staffs all the time, it was no big deal
Ballard Spahr has laid off in DC.
Ships sinking make me a saaad panda.
#3 and 21:
Sky's the limit?
-Panda Emeritus
26
Is there a firm lower than Balls Spar that the fired (excuse me, laid off) associates in D.C. can lateral to? Is that even possible?
16 -
I'm sure the dead weight partners had nothing to do with the huge drop in PPPs. You're right, it should be up to the associates to bring in all of the firm's business.
There is no place to go right row, but senior associates who know what they are doing will not be sticking around to make 148 with a potential 2K bonus at the end of the year.
Once the economy turns, those dead weight partners will be writing their own briefs and ruining their own weekends. Assholes.
UPenn 1L here (not UPenn St.)
Ballard associates now top out at 148.
Most places in New York still top out at 265 for associates.
Philly has a cheaper cost of living, but not by that much. I guess Ballard can still hope to recruit Widener grads.
Way to go ATL - they called you 'press.' Congrats!
Uh, I guess no one is pointing this out, but either your tipster has bad numbers or it is incorrect the senior associates are being hit with larger cuts. The opposite appears to be true, in both absolute and percentage terms.
Absolute size of the cuts:
'08 - 20
'07 - 20
'06 - 24
'05 - 18
'04 - 22
'03 - 26
'02 - 17
32 - I assume you are a partner/troll at Ballard Spahr or a law student because your mathematical reasoning leaves quite a bit to be desired. Ballard has instituted a tiered pay system meaning that most of these people are not going to be getting pay increases as they go through the firm. (one-time analysis vs. time series). It's clearly a system designed by a consultant to weed out middle and senior associates. They've now effectively implemented a maximum salary. They want you to just focus on one year. The real savings comes over time. Calculate how much these associates will lose over a 5 year period and you'll see how significant the impact really is.
33 - I am neither, and I wasn't addressing the subject of your analysis. I was addressing annual salaries and not earnings over time. One-time analysis, in your terms. My point was that the cut to annual salaries does not disproportionately hit the top end of the scale as suggested by Elie and the tipster, at least for the years we can see. To put it most simply: I was saying that Elie needed to crunch the numbers before throwing this out onto the web.
However, since we're doing analysis over time, it's worth considering the plight of an '08. Assuming steady pay scales, that person will lose an average ~$21k/y over his first six years ($130k total). An '01 associate will also lose $21k this year (assuming the scale is constant) and will lose $25k more next year. You are correct in that if our '01 continued as an associate indefinitely into the future, then he would stand to lose a lot. But to match the $130k loss of our '08 associate's first six years, the '01 would have to remain at the firm another 4+ years, making him a 12th year associate. That doesn't match real world conditions - "up or out" will prevail, and associate salary scales from this firm won't matter to him.
Of course, the calculus changes for a 4th or 5th year associate, but even so that person is likely to be up or out before matching the lost potential income of a current 1st year. So, your analysis, while technically correct, fails to incorporate real world conditions.
Ballard Spahr appears to be built like a North Korean apartment complex.
34 - That's the point. It will be different for a 4th or 5th year which is why this does really hurt mid-levels and senior associates more than the juniors over time. The real world condition is that there are 4th, 5th, 6th (and so on) years there who are going to be impacted really hard over time and who the firm essentially just told to fuck off with this new structure. Those at the firm who are in the Class of 2001 and prior just got their salary capped at $3k more than a 1st year was getting last week. But you're right, they're not being impacted because they "technically" do not exist due to "up and out."
Does anybody know how this effects the IP office in Atlanta? Formerly Needle Rosenberg.
Needle Rosenberg? Are you fucking kidding?
I'd pour syrup on that.
30 - Your pay scale does not apply to Ballard IP lawyers, which start (at least before today) at 165 with 10, and then 15K bumps.
Word is that Ballard made some poor decisions regarding leteral partners' compensation and the firm is suffering because of contractual payouts to them. Of the big/mid sized Philly firms, Ballard is the one suffering the most.
Stealth layoffs started as early as late fall '08 at Ballard. There were several in Philadelphia and in the Voorhees, NJ office.
Nevertheless, we should also remember that Ballard associates got two $10K raises over an 8 month period between late '07 and early '08. Notwithstanding the senior associate salary compression and maximum, this salary cut more or less rolls back the clock to early '07 salary-wise.
Stealth layoffs started as early as late fall '08 at Ballard. There were several in Philadelphia and in the Voorhees, NJ office.
Nevertheless, we should also remember that Ballard associates got two $10K raises over an 8 month period between late '07 and early '08. Notwithstanding the senior associate salary compression and maximum, this salary cut more or less rolls back the clock to early '07 salary-wise.
If it makes any of you feel better, they've cut partners too. And not just their salaries -- I mean they have been shown the door. In typical Ballard fashion, they manage to say: "Yes, we have had layoffs due to the economy, but no one really good ever gets laid off." That is nearly verbatim, quoted in the local legal rag.
Nothing like kicking people in the ass on their way out. Just in case they have kids to support.
Ballard is sub-prime.
This is the firm that chased Phoenix, Vegas, and LA after they got hot. Whether or not you could predict the current economy, rushing headlong into these markets without any name recognition (or clients there) was just plain irrational. They offered above-market guarantees to lateral partners in those offices, none of whom are bringing in any money. Those bad decisions are / were the death knell for the firm, yet management takes no responsibility.
Ballard has no leadership. Associates take the fall.
Upside for Associates is that even if lawyering doesn't work out, they are young enough and smart enough to be successful at something else. Mid-career partner with no business and big mortgage, not so much.
Message to deferred first years and summers (current and future):
get away from this death spiral while you can.
How else were they going to pay for the $45k stipend promised to deferred first years?
Once Rendell leaves office, the place is finished. All the young, heavy-hitter partners have left. Now, there will be no new, high-flying associates. Just below average associates and average partners, sinking together.
Funny, when they raise salaries they have no problem commenting on compensation.