Salary Cuts

Nationwide Salary Cut Watch: Foley Hoag Slashes Salaries to 'Improve Associate Development'

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Don’t you love it when a firm cares so much about associate development that it’s willing to cut associate salaries? That’s what Foley Hoag is doing; the firm announced today that it was slashing salaries, in part to help associate development and recruitment. Here’s a screen shot of the firm wide memo (click to enlarge):

How does cutting salaries help the firm recruit new associates and maintain current associates?
In any event, check out the rest of the memo and tipster reports on how deep the cuts actually are after the jump.


While the firm wide memo emphasizes the cuts to first through third year associates, Above the Law has spoken with some fourth year associates that are also getting hit by the cuts. Those fourth years report that their salary is now lower than what they were making when they first started at the firm.
At least some Foley associates are not better off than they were four years ago. That can’t help associate retention if/when the economy turns around.
Meanwhile, first through third years report that the cuts reported in the memo are somewhat bogus. Tipsters report that Foley’s old salary scale was $160K/$170K/$185K for years one through three. But because of Foley’s salary freeze, no third year was actually making $185K and second years were still stuck on $160K. The ten percent salary cut is a cut on those already frozen salaries. So now, all second years are making less than they were when they were first years.
It sounds like the “ongoing market conditions” are playing a bigger role in these salary cuts that Foley is letting on. But the firm claims that associates will have an opportunity to make up the salary cuts come bonus time:

Foley will “continue to evaluate [its] compensation model.” Does that make Foley associates feel better, or worse?
Earlier: Prior ATL coverage of salary cuts.

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