Last week, we brought you some salary cut news from the Sunshine State. Today we bring you more such news.
Holland & Knight, a large national law firm with a significant presence in Florida (the state it started in), announced pay cuts yesterday for associates, senior counsel, and senior professionals. The salary cut will be effective with the next paycheck (i.e., this Friday). The information was disseminated by voicemail — or, to be technical, a secure link to a Flash audio message — at approximately 7 p.m. Eastern time yesterday.
Our sources reported pay cuts averaging around 10 percent. But according to managing partner Steven Sonberg, the overall cuts are closer to 7 percent.
The explanation, including the firm’s full statement on the cuts, after the jump.
Here is the full statement on the cuts issued to ATL by Steve Sonberg, managing partner of Holland & Knight:
The legal profession has experienced a significant decline in demand for services during the past year. In response to these changing market conditions, law firms have been forced to manage more carefully all of their expenses. Like many other firms, Holland & Knight is reducing the base salaries of its associates, with limited exceptions. The associate salary reductions range from zero to ten percent. In addition, the firm is reducing the base salaries of some senior counsel/professionals.
The total reductions approximate 7%.
In addition to the current salary changes, the firm is developing modifications to its overall system for associate compensation. The firm will announce modifications to the system later this year, and those modifications will be implemented next year. The firm remains committed to recognizing the contributions of all of its lawyers and professionals through appropriate compensation systems.
This message is consistent with what we heard from our own sources at the firm. They noted that over the next few months, the size of the pay cut could be adjusted downwards — i.e., a lesser pay cut — based on productivity and other factors. They also reported that Holland & Knight is overhauling its compensation system for 2010, adopting a new comp system that may pay increased attention to bonuses as a way of recognizing performance (although one tipster quipped that “H & K bonuses have always been so anemic that I pay that little attention”).
Some HK lawyers may be unhappy about this news. But recall that Holland & Knight laid off 70 lawyers and 173 support staff earlier this year. If a pay cut is needed to avoid another round of layoffs, or to make it smaller in size if and when it occurs, we suspect that most associates and staff would be fine with it.
Earlier: Prior coverage of law firm salary cuts (scroll down)