Nationwide Salary Cut Watch: Mintz’s Levy on Salaries
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
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Comments
Furst!
Drawing a line at 1635 "and above" is a somewhat unfair reward, in the margin, for those of us who billed 2000 hours last year. : (
MysTTTal
MysTTTal
As long predicted Big Law will fall to under 100K starting salary. This is only the beginning. Time to march on Washingtn for that student loan bailout and a Fed job taboot.
Mintz Levy? Who cares about that firm...
I think it's fair that associates get paid substantially less when they are billing substantially less hours than they were expected to.
The last 12 months can hardly be considered an "arbitrary period." Picking a 12-month period in 2005 or only counting months with R's in their name would be arbitrary.
I would take a 15% pay cut to only bill 1445 hours. Lower tax bracket + summer vacation. Sign me up!
7 - for most of these associates, it is not their fault they are billing less. so an overall decrease in salary makes sense, but the tiers are just unfair because for the most part it is not in the control of the associates how many hours they get- most are trying to get as much as possible but there is no work. and many associates are hoarding whatever work would normally trickle down.
also - how will this effect starting salaries or first-years who haven't had 12 months of past performance to base it on?
Law firms who tie pay closely to hours had better watch out: they could be liable for overtime pay.
Law firms who tie pay closely to hours had better watch out: they could be liable for overtime pay.
How you like me now?
Less than 1200 should be fired immediately.
I think the name of the firm is Mintz Levin, not Levy.
Billed 2200 last year, on track for 2400 this year. Will not be too happy if the salary cut fairy pays the firm a visit.
15 - It's a play on words.
10, but the fact remains that the associates are not billing as much as they were expected to, whatever the reasons may be.
-7
Dumb calculation - 1250 hours, assuming a billable rate of $300 (maybe a first year, mid-market, Boston, etc.), and also assuming a 90% or so realization/collection rate (high in this economy), still yields well over $300,000.
What's the carry on these associates - office space, secretary, workstation, etc.?
How much is Mintz hemorrhaging?
Even the biggest cut, first years are getting six figures to bill <25 hours a week.
Not bad if you ask me.
It's official. Paul Hastings is renegotiating their credit agreement. This can only mean more stealth lay-offs.
I billed 2190 during those 12 months, what's the fucking problem with these people?
20 - I agree that it's still not that bad, but that "<25 hours a week" doesn't translate to that much less time in the office, nor does it translate to substantially less stress, if less stress at all. Worrying about your job and your cut-salary can be worse than worrying about doc-review, due diligence, churning drafts, etc.
Note to anyone considering Mintz: Soon Mintz will implode. Beware.
24, care to elaborate?
- rising 2L looking at Mintz among several other firms I wouldn't have had to if not for ITE.
This is great news.
21: Stealth layoffs are already happening at PH NY (it's an ongoing thing). Where have you been?
Stop mintzing my salary. Levin me alone.
no comment
27 - PH LA associate here. It has reached the point where there are almost as many partners as associates in this office. Tumbleweeds are flying down the corporate, re and employment law halls.
"I think it's fair that associates get paid substantially less when they are billing substantially less hours than they were expected to."
Lawyers in firms who bear the risk of drops in revenue are usually called partners.
Hey, young lawyers, have you finally figured out why you should demand big money as a young lawyer? It is called RISK. You bear it now, as an *employee*. The partners no longer bear any risk of revenue drops until after your life is ground to mulch.
Welcome to law.
Audit the Fed immediately! And legalize cannabis shortly thereafter!!!
Brilliant, 31. At-will employees bear no risk of a drop in firm revenues?
22- just give your name and tele number. it will be easier to id you.
A law firm keeping associates billing 1200 hours?? They should open up an office down in the Carribean mon!
Mintz let go a number of people in the last recession and since then has been hiring people from fine schools like the Franklin Pierce law center. What do you expect?
I'm with 35. 1200 hours? That's like 4.5/day. Where do I sign up?
25, from a consulting source: the Mintz business model can't handle sharp dives in collection/realization. Their credit is too shaky to secure short-term financing to smooth out the accompanying cash flow problems. They binged on their associate classes for the entirety of the boom. Their firm trust was invested in high-risk funds that went bust. The end.
What is this nonsense? I billed 500 hours over breakfast this morning and I'm a partner. I can't stand all these lazy associates. If you're not willing to bill 20,000 hours a year, move to France.
Billing 3000 hours is the new black.
Just ran a report on my hours from August 1, 2008 through July 31, 2009 - billed 2,746.6 hours.
For this year, I'm going to hit the firm minimum of 1,900 hours later this week. I'm on pace for more than 3,139 billable hours, although that will drop after a three week vacation that's coming up.
Number 39- did it ever cross your mind that maybe the associates aren't lazy, and that it's the partners' fault for not bringing enough business into the firm?
p.s it's very sad that you think billing 500 hours over breakfast is an accomplishment- i imagine you are a very, very lonely man.
Number 39- did it ever cross your mind that maybe the associates aren't lazy, and that it's the partners' fault for not bringing enough business in?
p.s it's very sad that you think billing 500 hours over breakfast is an accomplishment- i imagine you are a very, very lonely man.
41--Where do your work and are you litigation or bankruptcy? You cannot be corporate.
43--39 was being facetious (promounced "phu-cee-shus").
9 has no clue how a tiered tax bracket system works....
wow, all of you people just like to announce your own "achievements" by posting your hours billed. why don't you try computing how many hours of your life you actually enjoyed during that time- or how many hours you have left in your boring life...
I billed 0 hours this year and less than 1000 last year. Can you guess where I am right now. Hint. it involves my hands on my pecker.
41- I want to be just like you. Your friends and family must love you. You must feel so fulfilled. On a serious note though, why would that be something to boast about? Who would want that life?
42:
Are you completely retarded?
41 your amazing - can I be your friend
46: Agreed. 9 must have failed basic Tax, never taken Tax, or isn't even a lawyer or law student, and is just running his mouth without knowing what he's talking about.
To summarize briefly, under our current tax system, you only get taxed at a higher rate for dollars you make beyond a certain amount. As an easy example, this means that for single people, everyone's first ~$8,000 is taxed at 10%, everyone's NEXT ~$24,000 (your income between $8,000 and $32,000) is taxed at 15%, etc. It's not as if making $9,000 means that all $9,000 gets taxed at 15% -- only $1,000 of the $9,000 would be taxed at the higher marginal rate, and the rest would be taxed at 10%.
I call bullshit on 41. If you billed that much, you were padding or flat out lying. I just don't believe people who say they bill that much. Maybe a few, a very tiny portion of "high billers" honestly can bill at those levels, but the rest are lying.
I don't get the whole stepped pay scale. If they want to be fair, they should make a mathematical function for the percentage cut. If it's linear, it just needs two variables for the line and two for the maximum and minimum cut off.
This is the 21st century, can't people freaking use a calculator??? I'd hate to be the person an hour away from the better pay rate!
Of course we could make the formula more complicated, 54, but then the stupider associates would be in here complaining, furrowing their brows in a vain attempt to understand the situation.
I've heard a rumor that Ballard Spahr has had another round of salary cuts and/or stealths. Can anyone confirm?
53 - If you aren't padding in this economy you are begging to be laid off!
57- I'm not padding, and I live in constant fear of being laid off. At least I don't feel like a crook and I can sleep at night . . . actually I don't sleep at night because of the fear-of-lay-off thing. Perhaps I should reconsider the no-padding policy.
53
Not entirely true, 52. Not everyone will truly pay 10 percent on the first 8K, etc. Some people get taxed at an effectively higher rate for each level of income because of tax deductions (e.g. student loan interest) that phase out for high income earners.
As to your remarks on 9's tax acumen, don't cast stones when you live in a glass house, 52.
Not 9.
"As an easy example, this means that for single people, everyone's first ~$8,000 is taxed at 10%,"
Problem - it isn't that easy. Due to politicizing of the income tax program exempton and deduction phaseouts and qualifications change heavily once higher income is achieved.
The result, a guy making $16,000 isn't taxed on dick and usually gets back a credit due to the EITC.
Seriously? This firm has associates under 1250 hours?
BK drive-thru employees log more than that. What gives?
There are going to be corporate/m&a/capital market associates with 1200 hours this year, believe it or not. Not everyone, but certainly some. The country went 8 months without a single IPO...What do you think capital markets lawyers do?
61 - this firm isn't the only one out there with some associates billing less than 1250.
Any firm with lots of associates in this situation can expect salary cuts, more layoffs, and perhaps even implosion to put the place out its misery once and for all, unless there is a miraculous substantial uptick in business. Bottom line, it is not sustainable.
48 - you and me both (although I don't have a pecker).
And to all of those saying that "<1200 hours in 2008 should = firing": (1) PHJW would halve instantly (it's already down about 30%), and (2) most corporate departments would be gone.
--billed 2400 in 2005, 2800 in 2006, 2450 in 2007, <1000 in 2008, 0 in 2009
a 35% cut? That's delicious. Good to see you T14 douches are gettiing a taste for shitlaw. In fact, you are the new shitlaw. Long live the Great Recession.
a 35% cut? That's delicious. Good to see you T14 douches are gettiing a taste for shitlaw. In fact, you are the new shitlaw. Long live the Great Recession.
The ship be sinking...
59-60: I was trying to provide an easy example that would apply to associate salary cuts -- as in, for example, between the 33% and 28% tax brackets. If 9 didn't understand the basic concept of progressive tax brackets, do you think he would have been able to grasp the additional concepts of deductions, EITC, etc.? When you learn tax for first time, they start with the basic notion of progressivity & brackets, and then make things more complex with deductions, EITC, and other credits. No associates are going to be receiving EITC or have lower income benefits that are going to disappear between the $164k bracket cutoff, so that discussion isn't really relevant here.
"I was trying to provide an easy example "
Easy yes, accurate no.
"No associates are going to be receiving EITC or have lower income benefits that are going to disappear between the $164k bracket cutoff,"
The ones employed, likely. And what is with the "you learn tax for the first time" comment? Progressive rates structure is at best an 8th grade math problem. It isn't anything $45,000 Harvard tuition teaches.
64 - so what DO you have?
70: Vajayjay - 64.
71 is not 64, I am. If anyone were to actually call it that, he wouldn't be experiencing its magic.
Mintz could be mince meat. The billing fraud and unproductive work that is the hourly system is unsustainable. The hourly system isn't a model for the future in the mind of the client- i.e. those that have been porked by so many, for so long are saying so long to big law.
Mintz has close to 75 more partners than associates at this point, they are royally screwed. Most associates have billed 1200/1300 hours over the last year, except the litigators who bill about 400/500 on pro bono every year. The corporate department has been completely massacred at this point. We're all sitting around waiting for the next round of layoffs. Ironic considering they have spent the last 7 years trying to recover from the brutal PR hit from massive layoffs in the early 2000's. At least we can all laugh out loud now when the partners try to compare Mintz to Ropes or Wilmer.
I am sure the number is much closer to 30 attys and numerous support staff over the last six or so months. These include a number of salaried partners that have been pushed out the door.
Further comment regarding the tiered salary reduction at Mintz (which the firm likes to refer to as "adjustments").
The associates who have avoided the layoffs have repeatedly been told "it's not your fault" that you don't have work. Even associates who have been hit with the outrageous 35% reduction have been told in one-on-one meetings that they are not at fault, that their work is excellent, and there was nothing more they could have done to get additional work, to at least match the hours of associates who only took a 25% or 15% reduction. But in reality, the tiered system shouts loud and clearly that the associates penalized the most are more at fault than the other associates. Is this a quiet way for the firm to push more associates out the door without having to pay them the benefits that would come along with being terminated?
One more thing. These are not “short term adjustments.” Associates have been told to expect the same tiered salary reductions for the next fiscal year (beginning April 2010) as well.
The amount of dead weight partners here at Mintz is unbelievable. While they have weeded out a few, there are many more who bring in zero business and sit on their thumbs all day.
With a history of treating associates horribly (terrible bonuses during the boom years - we're talking $10K for 2200 hours), this era is certainly no exception. The associates have taken the overwhelming brunt of the layoffs, while support staff and the army of HR/Marketing folks have remain unscathed as well as the many useless partners.
these hours are ridiculously low--are these the hours associates at other firms are billing? i'm in litigation at big law in texas and associates in our group are on track to bill 2200 this year on average. if this is what associates are billing at other firms around the country, then i can't believe there haven't more lay offs.
i can't stop shaking my head at how low these hours are.
Mintz Levin continues to cut associates and staff but continues to bill out at 700 + because they have a reputation to up hold. Give me a freakin break! I know that even paralegals are being told they should be at 100% billable! Right, partners and associates are less than 80% but paralegals should be at 100%? What about all the marketing, IT and human resource personnel that do nothing??? How about cutting those losers??