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

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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.
Earlier: Prior ATL coverage of associate salary cuts

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