Nationwide Salary Cut Watch: Akerman Senterfitt Opens Books, Cuts Salaries
Akerman Senterfitt is a Florida based firm, so — given the economy in Florida — it’s not all that surprising that the firm has decided to join the salary cutting party.
Multiple tipsters independently confirm that Akerman has instituted an across the board, 10% pay cut on all class years. Here is the internal email about the salary cuts obtained by Above the Law:
We are announcing today a 10% reduction in all associate salaries, effective immediately. This action is being taken in response to market conditions, which I know you are all aware of and which I need not belabor. I want to make it clear that our firm’s financial condition remains very strong, and even clearer as to how much we appreciate all your hard word and effort on behalf of the firm.As previously announced, the associate bonus hours grid that we have used during the past few years has been eliminated. Instead, we will be carefully reviewing each associate’s performance at the end of this year as we consider paying merit-based discretionary bonuses to those meeting the established minimum qualitative and quantitative requirements.
As the email suggests, everybody is well aware of the terrible situation happening in the legal economy. But is the terrible economy forcing Akerman into this situation, or is the firm simply taking advantage of the difficult economic situation to roll back salaries?
After the jump, tipsters who have seen Akerman’s books claim that this is a salary cut of choice, not necessity.
According to sources, Akerman recently took the extraordinary step of “opening [its] books” to senior associates. Giving associates first-hand knowledge of the firm’s financial situation seems like a good move. Unless the numbers suggest the firm didn’t have to cut associate salaries, but decided to do so anyway. Here is our tipster’s report on the underlying financials at Akerman:
This is completely bogus. The management just held a meeting where they “opened the books” for associates. According to their presentation, the firm’s revenues were exceeding budget and expenses were 7% below budget….I understand that collecting on our hours is much more difficult, but the numbers they shared don’t demonstrate a noticeable impact on the bottom line. They continue to hire laterals. Staff members have been spared. This is a flat-out money grab, and associates will remember this when the economy turns around.
Another tipster said simply:
Look at the numbers. This is crap.
In response to our request for comment, Akerman Senterfitt furnished us with this official statement:
It is our policy not to comment on any personnel matters. Our firm’s financial condition remains very strong, and we appreciate all [the associates] hard work and effort on behalf of the firm.
It’s pretty amazing how many firms that are in a strong or “very strong” financial position still feel the need to cut associate salaries. Maybe this really is just a “mental recession,” and the economy is actually just fine.
Clients don’t necessarily care if a firm is making a salary cut out of necessity or out of choice. But current associates (and prospective future associates) do.
Good luck, Akerman associates.
(61) 
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another one bites the dust!
"our firm's financial condition remains very strong"
Nothing to see here...ALL IS WELL!!! ALL IS WELL!!!
You know it's an Elie post when it finishes "Good luck, Akerman associates." It's like his "Good night and good luck," only a lot more lame and hollow.
Firms that claim to be doing well make salary reductions for one of two reasons. They are not doing well or they are just grabbing back money because they are greedy. If you were really doing well you wouldn't be cutting salaries unless you are just getting greedy and opportunistic
Not a peer firm... hybrid tough love... etc.
"Latham is well diversified"
*skull fucks a first year associate's career*
-Latham Management, xoxo
Mystal, I must complement you today on how nice that pearl necklace looks on your moobs. Very fetching.
Ned Nederlander
7 - elis was the "guy" in the wachtell story (pearl necklace etc.).
Who cares about TTT Florida firms.
Seton Hall 3L
Akerman Senterfitt > Binder & Binder > Wachtell
who?
your mom makes a "noticeable impact on the bottom"
Latham = the Akerman Senterfitt of New York
The cuts aren't being made because the firm is making less money, but because the banks are requiring the firm to cut it's overhead in order to keep its lines of credit. When are associates and law students going to realize that it's time to seek another avenue for earning a living, because the practice of law isn't the place to be in the future.
Cue PE's tired shtick about how this is not a peer firm and it made the right move by cutting salaries and this is all Obama's fault.
15
I eagerly await it
AkFittt...reminds me of Bill the Cat from Bloom County.
"This is completely bogus. The management just held a meeting where they "opened the books" for associates. According to their presentation, the firm's revenues were exceeding budget and expenses were 7% below budget.... "
Once again, stupid lawyers who don't know jack about business. Those numbers are lagging, what is important is future revenue. If they want to attract future revenue, they need to cut costs so they can maintain, and even increase profitability. Past performance is not indicative of the future, I'm sure you dolts read that in some mutual fund prospectus during doc review. Looking forward, firms that don't cut costs are going to get hosed. And what is the most substantial cost facing firms, associate salaries. Forget not, associates are labor, they don't own a right to the profitability of the firm, nor should they.
Keep crying associates, you sound more and more like big labor at GM.
I am a Seton Hall summer at Orrick and I am not scared. My WORK PRODUCT speaks for itself.
SETON HALL SECURE
I just sharted. Can I leave for the day?
-Boston Female Attorney
18 - you're almost intelligent. What's important is not future revenue, but future profit. And cutting costs or boosting profits doesn't attract revenue. Cutting rates does - in theory. What you should have pointed out to the dolts is that how you are performing compared to budget is not nearly as meaningful to partners as how they are performing compared to prior years. A halfway smart managing partner would have their current year budget being extremely modest. And being under budget on expenses is easier when work is slow. Take home pay can blow away budget, but still be far off from prior year. And that means associates get a ticket out.
@Partner Emeritus
aka
Mr. "I-have-40+ Years Legal Experience" -
We would like to preempt any comments you may have by noting that the Firm no longer uses mimeograph machines and carbon paper.
Accordingly, please stop pestering all the support staff to locate these items for you. The Elder Law Project program coordinator had insured us that your presence at the Firm would not be a distraction, but if such behavior continues we will be forced to reconsider our present arrangement with ELP.
Sincerely, etc.
- The Partnership
cc: Director, Elder Law Project
"What you should have pointed out to the dolts is that how you are performing compared to budget is not nearly as meaningful to partners as how they are performing compared to prior years."
I'm sorry I'm a little dense, but how is that forward looking? The last few years performance is a little helpful, but if I can perform better than the budgeted (assuming it is not a lowball estimate but one that is a sincere measure) profitability wouldn't that be a more important indicator of performance than comparing to past years?
Two separate thoughts 23. 1. future profits are what matter more than just revenue. And 2., partners (like most associates) don't have business sense and care only about maintaining their lifestyle and bringing home enough this year to pay for all the toys they bought in prior years.
22-
Evidently you are a prestige whore who is grinding away writing your own work, instead of having your three secretaries transcribe your dictations. I remember going to a law office (a small one mind you, 5 lawyers) with 18 secretaries. Fool, you knock that which you don't understand.
-yearning for the good old days
24, I agree with 1, future profits are much more important than future revenue, I mispoke.
As for 2. well, then I guess partners are in worse shape than I thought. Better to maintain, than get blindsided.
Must be why noone saw the bubble coming. It's kind of a moral, not necessarily intellectual issue.
Macintyre is right, time to bush up on Aristotle, because the Weberian partners can't hack the nightmare that's about to befall them.
ack
Comment removed by moderator.
Elie, do you prefer dark meat or white meat?
Have any other firms in South Florida or with South Florida offices reduced salaries?
We've already established that either PE is either on vacation with his family or his mom has revoked his internet privileges. Maybe he didn't get all of his summer chores done.
30,
Binder and Binder is reducing staff salaries while at the same time hiring more staff.
*casually destroys half the first years*
-Latham NY
I think PE is studying for the Alaska Bar, so that he can help Palin with her legal bills
Latham's handling of the layoffs has been, and always will be (and I assure you that more layoffs will be coming), deplorable!
Hope and change you can believe in.
"It's pretty amazing how many firms that are in a strong or "very strong" financial position still feel the need to cut associate salaries."
Not when you're constantly screaming about the sky falling, Mystal! This blood is on ATL's hands!
Can ATL ban futher commenting on the Morgan Lewis Cancels 2010 Summer Program (7/14) thread? The thread has been hijacked by sordid PHJW gossip. What does any of this have to do with the ML story?
I lied, and even jobs at crappy Florida firms no one has ever heard of died.
I'm Barack Obama?
How come none of you morons commented on the typo in the internal email? (". . . hard word and effort . . .")
You are slipping.
How come none of you morons commented on the typo in the internal email? (". . . hard word and effort . . .")
You are slipping.
38 - thanks for the tip! I'll go read about PHJW now; I love to read that stuff. Wouldn't have known about it if not for you. You're the man!
PE cant post anymore. 2 weeks before the bar
Akerman has to cut associates' pay or they'd be overpaying in this market. If you overpay, you get better people and that'd make the current Akerman folks uncomfortable. Can't have that.
14 - fascinating, if true.
The ship be sinking...
Thanks 38! That is some really good dirt on PHJW.
Where is everyone's favorite partner emeritus lately?
This sounds like the tip of the iceberg to me. They can't be saving much money because Akerman is an inverted pyramid where everyone who can breathe makes partner. They have no associates. When they moved to a class partnership system a few years ago, I heard that existing partners at all levels were "grandfathered in" as equity partners.
The firm is "run" by quite the dandy (look at his picture) and a former used car salesman who are not taken seriously. The real powers tend to sit on the sidelines and control the outcomes and do not take a public role. While they have good financial judgment, their primary focus is maintaining or increasing their own slices of the pie which they accomplish in good times or bad. I am sure that this requirement was what necessitated the salary reductions.
I wonder Akerman did to the non-equity partners and its of counsel. The compensation committee will act quickly to deal with the less productive or politically connected equity folks if they haven't already.
44 has an entirely valid alternative explanation. He/she could easily be right.
any clue on how summer offers will work out at the nonV100 florida firms such as akerman, carlton fields, bilzin sumberg, and gunster yoakley.
My offer to start at Kluger Peretz in September still stands.
My offer at Steel Hector to start in August still stands.
@25,
A mimeograph is not used for transcribing dictations.
read the post.
So few Bingo claims between the retirees these days. Shame for TTT law firms.
51, good luck. that place is falling apart. that's mot even the correct name anymore.
If this is what Akerman is up to, it won't be long before the money-grubbing mafia at Greenberg Traurig is asking it lawyers to work for free.
-53
Thanks assclown the sky is also blue, i was speaking in general terms of nostalgia, ie when I visited law offices 25 years ago as a little kid. Dumbass.
-25
Only person I know at this firm is a guy who got fired from PH for banging half the secretaries at the firm while a summer . . . high quality
@25
blue, nostalgia, whatever...
I stand by my earlier comment.
-53
49 is probably close. I'm not from Florida, but if this is a Florida firm, what is it doing with offices in NYC, DC, Denver, LA, Dallas? have delusions regarding expansion run the costs up higher than anticipated? I heard it has never made money in NYC, and that the annual costs of maintaining that and other non-Florida offices have exceeded the revenues generated by those operations. Also, did I read the bios correctly - has the firm been hiring laterals who previously worked at subprime lenders?
Sorry to interject a smattering of reality, but have any of these firms that have cut salaries also cut billing rates? Offered clients larger discounts to retain the work? Done anything to show that they're trying to mollify the clients, instead of stuffing their pockets?
It's bad enough that the in-house ass clowns are jealous of law firm associates pay, but the constant whining about firms paying their associates too much (as opposed to charging too much) really needs to stop. It's boring.