Salary Cuts

DLA Piper to Move Away From Lockstep … Eventually

DLA Piper logo.jpgBack in May, we reported that DLA Piper decided to cut its associates’ salaries. Initially it was a 20% cut on some associates, but after our report the firm moved down to a 10%, across the board, salary cut.
But saving money was apparently only one of the goals for DLA Piper. We can also add DLA to the list of firms that want to end the system of lockstep compensation. The National Law Journal reports:

DLA, the largest firm in the United States, with about 3,785 attorneys worldwide, is one of several firms rethinking its associate program amid the need for cost-cutting brought on by the recession and in light of clients’ demand that they pay only for associates skilled enough to deliver consistent quality. The firm hopes by year end to have a new associate compensation, training and promotion structure that discards the traditional “lockstep” system of paying them based on years of service, the leaders said.
“People really want to rethink the model,” said Lee Miller, one of the firm’s joint chief executives. “I don’t think the model is broken, but people want to rethink what they’re doing and why they’re doing it.”

The model isn’t broken, but the firm is going to change it anyway? That sounds like some excellent Shock Doctrine logic.
After the jump, more details about DLA’s new business model.

DLA indicated that it is planning on expanding its staff attorney program:

The firm expects that more work in the future will be done by staff attorneys, the leaders said. Such attorneys are employees, but are not on the firm’s partnership track and are typically paid at lower rates.
Currently, DLA has about 30 staff lawyers. The firm will have larger pools of professionals who do certain things efficiently at a cost that makes more sense to the client, Frank Burch [DLA’s global chairman] said.

Interesting, the firm is talking about hiring more non-partner lawyers, but not talking about outsourcing work. Unemployed J.D.s, you know where to send your resumes.
In April, we told you about DLA practically begging its incoming first year associates to defer a full year. It appears that about half of the class decided to delay the start of their careers:

The delayed class of first-year associates entering the firm in January has 85 lawyers, and only half of those will actually take up posts at the firm, while the other half go into public interest jobs and join the firm in the fall of 2010, said Frank Burch … That class size is down from 100 last year and 120 in 2007, he said. The firm was also “careful” in hiring just 65 students into this year’s summer program, he said.

We’re not sure if that means that DLA plans to hire all of their carefully selected summers. Or if the firm plans to offer some of them the opportunity to be a staff attorney at the firm. Or what they’ll be paid. Or when they’ll be able to start.
Hope for the best, prepare for the worst. Good luck to DLA’s band of merry pipers.
DLA Piper Plans to Keep Reducing Associate Classes, Discard Lockstep System [National Law Journal]
Earlier: Nationwide Salary Cut Watch: DLA Piper Joins the Party
DLA Piper Salary Cut Follow Up
DLA Piper Gives Back 10% of the Salary Cut
Nationwide Start Date Round-up… Yup, Another One

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