omelveny logo.JPGAt what point does a salary freeze start to feel like a salary cut? Staff at O’Melveny & Myers are about to find out. O’Melveny just announced a new salary ice-age for its staff. Above the Law obtained this internal memo sent to O’Melveny staffers:

We are committed to taking proactive steps to maintain our financial strength in the face of unprecedented economic times. As part of this effort, we continue to look at how we can prudently and efficiently manage our costs and have therefore decided that there will be no salary increases this year and the performance evaluation cycle will be extended from 12 months to 24 months. Your performance evaluation will now cover the period between July 2008 – July 2010. We will consider salary increases at the end of the new performance review period in July 2010.

O’Melveny has already been through layoffs. In March, 200 people were let go, including 110 staffers. So on the one hand, a salary cut is a lot better than being out on the street.
On the other hand, staffers don’t make much to begin with, and nobody wants a static salary. O’Melveny staff better start rooting for the rest of the American economy to continue its deflationary trend.
O’Melveny confirmed that the freeze only applies to staff.
Will we see more ice-age freezes this summer? Stay tuned.
Check out the full firm statement after the jump.
Earlier: Nationwide Layoff Watch: O’Melveny Fires 90 Lawyers, 110 Staff


O’MELVENY & MYERS — MEMORANDUM — SALARY FREEZE
We can all agree that it has been a challenging year for businesses around the globe. Over the past several months, Firm leadership has been discussing the impact that the challenging economy has had on our Firm and on law firms in general. We are committed to taking proactive steps to maintain our financial strength in the face of
unprecedented economic times. As part of this effort, we continue to look at how we can prudently and efficiently manage our costs and have therefore decided that there will be no salary increases this year and the performance evaluation cycle will be extended from 12 months to 24 months. Your performance evaluation will now cover the period between July 2008 – July 2010. We will consider salary increases at the end of the new performance review period in July 2010.
We continue to evaluate other compensation programs as well, such as annual bonuses, as part of our commitment to remain strong in these rapidly changing times. We recognize that this comes as unwelcome news, but these steps are necessitated by the broader economic circumstances that we now confront.
While we have extended the current performance review cycle this year, the Firm remains committed to the professional development of its employees. We encourage you to find opportunities to have meaningful conversations with your supervisor or local HR Managers with regard to your personal and professional growth here at O’Melveny. Please continue to provide feedback and suggestions on how to work more efficiently and effectively with the shared goal of providing excellent service to our clients.
We thank you all once again for your commitment and your continued support and understanding as we continue to navigate through these challenging economic times. Please feel free to contact your HR Manager or Office Administrator should you have any questions.


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