Two weeks ago, Mintz Levin laid off 15 associates. But apparently those cuts were not deep enough. Above the Law has been able to confirm that Mintz Levin has cut associate salaries. A tipster explains it this way:
Salaries will be adjusted as follows (firm-wide, all departments) based on this 12-month period:
* Hours greater than 1635, salary reduced by 5%
* Hours between 1445-1635, salary reduced by 15%
* Hours between 1250-1444, salary reduced by 25%
* Hours less than 1250, salary reduced by 35%
Associates who were employed by the firm for the full fiscal years ended March 31, 2007 and 2008 and who met or exceeded target (i.e. 1925 hours) will have their salaries reduced by only 5%, regardless of their hours for the 12 month period (i.e. this safe harbor effectively only applies to 4th yr associates and above).
To make these cuts Mintz is looking at hours billed over the last 12 months. And we all know what has happened over the last 12 months:
[The cuts are] based on their utilization during the prior 12 months – August 1, 2008 through July 31, 2009. Why the arbitrary period? It’s a snapshot of the recession at its height.
But the firm will make people whole and return the money at the end of the fiscal year if their projections are wrong. For people on track to make their hours in FY 2009 who nonetheless fall below the threshold if you count the entire recession against them, they will have an opportunity to get some of their money back. So they should consider it simply loaning money to the firm right now at a 0% interest rate.
Feel better? More details, including a statement from Mintz Levin, after the jump.
Mintz Levin’s managing member, Robert I. Bodian, confirmed the salary cut news to Above the Law earlier today:
Like many firms over the past year, we have taken a number of steps to reduce expenses, and improve efficiency, including limited staff and attorney reductions and compensation adjustments. While never easy, we believe these short-term adjustments are appropriate given the current economic climate.
The 35% salary cut for the lowest billers is pretty drastic. Most other firms that have cut salaries aren’t cutting this much. The level of cuts makes for the weird situation described by this tipster:
The tiered structure creates a situation where some senior associates are now making less than junior associates, and so on. Particularly disturbing since the firm has supposedly trimmed all the excess fat from their departments, and the associates who remain are the ones they intend to keep.
But since the firm just fired employees, people who were able to keep their job are probably not going to complain. Mintz associates aren’t going to whine about a 5% to 35% salary cut when the alternative was to end up on the street.
Earlier: Prior ATL coverage of salary cuts