Associate Salaries, Dorsey & Whitney, Killing Lockstep

Dorsey & Whitney: Do We Have Another Firm Looking to Abandon Lockstep?

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Dorsey & Whitney’s managing partner, Marianne D. Short, was making the rounds in the Minneapolis office yesterday, talking to associates there about the future of the firm.
That future might be one without lockstep compensation. A source reports:

[T]he firm [suggested] it was restructuring our compensation. They did not give us any specific details. But, it seems likely that this will result in another large pay cut for associates. While hazy on the details, Dorsey management indicated that the restructuring will be something like this: we will be given a base pay rate which will be below market (whatever that means these days, but regardless, likely well below what we are currently making after our 10% pay cut), which will be supplemented by a ‘bonus’ if we make our hours to bring compensation up to market.

Alright, slow down. While it does appear that Short broached the subject with associates in Dorsey’s Minneapolis office, it appears that there are still a lot of evaluations and reviews that will have to take place at Dorsey before any final decision is made. It is premature to speculate about what kind of new base salary the firm might offer.
But it does look like the firm is considering a new system. We have statements from the firm and more from our tipsters, after the jump.


We asked Dorsey what — if any — new compensation structure it was considering. Here’s what a spokesperson told Above the Law:

[A]ny suggestion of a cumulative pay reduction is inaccurate….
During regularly scheduled office visits, our Managing Partner meets with associates to discuss topics of interest to them and answer their questions on firm direction and management. Yesterday, our Managing Partner was one of several speakers to address Minneapolis associates during a regularly scheduled office meeting. Not surprisingly, the topic of associate compensation was discussed. Like many firms, Dorsey is reviewing market data and considering adjustments to our system which would emphasize associate contribution and core competencies. As discussed with the Minneapolis associates, no decision on the associate compensation structure has been made yet.

Despite the fact that nothing has been finalized, Dorsey & Whitney associates are still worried about what could be coming. Cumulative pay is a lot different than base salary:

[T]he expectation that people will make their hours in this economy is preposterous. This is merely another way to package an enormous pay cut. Even worse, they announced, without giving us specific details, that they want the compensation structure to take hold when the new associates begin in November.

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Dorsey has already cut salaries. It has already canceled its 2010 summer program, and given offers to only 56% of its 2009 summers. But the firm has been open and transparent during the recession. Something tells me that Dorsey doesn’t need an excuse to make difficult business decisions.
If Dorsey & Whitney does move away from lockstep, maybe it won’t involve an additional hit to base salaries? Or maybe the bonus targets will be based on something more than hitting a certain amount of hours in the middle of a recession? It’s possible.
Earlier: Salary Cut Watch: Dorsey & Whitney Cuts Salaries by 10%
More Canceled Summer Programs: Quarles & Brady, Dorsey & Whitney (outside Minneapolis)
Nationwide No Offer Watch: Dorsey & Whitney Brings More News From the Upper Midwest

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