Nationwide Salary Cut Watch: Foley Hoag Slashes Salaries to ‘Improve Associate Development’
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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Comments
Salary swings Foley. Salary enters Foley. The override slips Foley beside a documentary overload. A collar brackets Foley above the dragon. Under Foley calculates a girlfriend.
Firsty?
Well, on the up side, reducing salaries means fewer layoffs. Sucks to have your salary reduced, but at least you get to keep working.
Looks like PE had a stroke. Better watch out - that's how Jerry Gallo went out, and he was on the toilet at the time.
Mission Accomplished.
The ship be sinking...
How you like me now?
# 3 has it wrong. Salary cuts on top of a salary freeze indicate the firm is still headed downward. Layoffs will follow.
This is not a preeminent peer firm.
Foley Hoag lawyers who have had their salaries cut are dilatory and nescient.
Guys at my high school had their salaries cut all the time. It was no big deal.
Welcome to DeflationLand. The One can't print money fast enough to slow the Great Deleveraging but he needs to stave off the second down leg until after the 2010 elections. So he's throwing your future in front of the trolley in order to save himself and the corporatist/collectivist economy built by the Bushes and the Clintons for their cronies.
When the market and not the powerful pick winners you can be sure the powerful will turn to the government to undermine the market.
The good news is that once the economy turns around the firm will increase salaries again, probably higher to before the cuts
Mission Accomplished!
hopefully my firm doesn't do this, but needless to say these salary cuts are making me nervous.
*tries to figure out if i can afford models and bottles on a 145k/year salary*
-nervous T-10 2L
11 - living frugally is a art
My firm still has a salary freeze, but at least they are honest about it: "Business is slow, this is a sea change, we will provide updates when we can, salaries rose very fast for a few years, and we needed to do a freeze and do some layoffs." The subtext is, we own the firm, we get to protect the firm, you will have to settle for a little bit less money, and unfortunately some of you will have to leave. It is honest.
That is far, far better than these pathetic, shitty, pretender firms who try shit like: "Our clients are telling us that we need to cut associate salaries and it is for your associate development and it is merit-based." That is bullshit, and everyone knows it. Don't bullshit a bullshitter.
Put blunty, lots of lawyers are shitty liars and they don't realize how stupid they look, and how much they are hurting their firms' reputations by lying about these things. Just man up and tell the truth.
Where is the coverage of the Milbank memo ?
14- what happened at Milbank?
"The professional development framework . . . is intended to provide a clearer road map of development goals and the means to achieve them."
The professional development framework would be better described as clearer criteria for determining who to layoff.
Expect the first layoffs to be anyone who asks a question at the October 29th meeting.
Hate to break it to you Nervous, but with NYC rents + the 33% tax bracket + student loan payments, we can't really afford models and bottles on $160K
Learn to read people - that is a PE imposter.
17- Move to Queens, if you make crap you don't have to worry about being in the 33% tax bracket, and paying back student loans is for suckers. The student loan system is unsustainable and the Cash for Crap Degrees program will start in due course. Go on the income contingent repayment program and ditch biglaw.
The ship be sinking...
Its raining WALRUS!
14 - WTF are you talking about??????? WHAT MILBANK MEMO?
Ohh, good call 18! I had totally missed the deliberate typo in the name and was wondering what was wrong with PE.
Have you noticed that not one person who works hard has had their salary reduced, or been fired?
17 - so maybe we should take you out of the 33% tax bracket to help you out?
22 - Milbank memo = flame
Even with the cuts, their pay is still way too high for current and future conditions. If partners want to maintain their income levels, and that's what the game is all about folks, then a whole new pay model needs to be put in place. Say goodbye to six-figure starting salaries.
Foley Hoag's biological clock is...
"THUD! THUD! THUD!
ticking !
Although not a peer firm, FH has won half the battle in its effort to adopt my hybrid tough love package. Associates are finding out that their premature celebration of Commissar Obama's election victory last November was a precursor to living through dark times. Do more with less folks. I certainly did not complain about a $16.5K salary when I started out. I was able to buy a home within 3 years for cash (unlike Taj Oladarian who subscribes to the idea of "buying" homes with no money down). If you find it difficult to live on $145K a year because you over leveraged yourself to pursue a pothead's dream, then you lack the judgment to be a lawyer. Why would clients want to hire lawyers who make poor financial decisions and can't budget themselves acccordingly? In my opinion, FH's salary cuts will develop character within the lowly associate ranks and that is what progress and development should be all about. That is all.
What about the WALRUS manifesto?
I thought it was Foley Lardner????? Did they change their name to get rid of the word "Lard" or something??? Foley Hoagie isn't much better.
Whoa dude--what are the odds of two big ass firms starting with the name "Foley."!!!! Unfuckingbelievable.
Salary cut?! I carry twenty-three great wounds, all got in battle. Seventy-five men have I killed with my own hands in battle. I scatter, I burn my enemies' tents. I take away their flocks and herds. They pay me a golden treasure, yet I am poor!!! Because I am a river to my people!!!
31:
The Foley Lardner guys brother started Foley Hoag. So no coincidence.
Different firms, 31. You're going to be an awesome attorney where details don't really matter much, anyway.
33 how does I worship Allah?
Wilfred, I have told you a million times not to blog while inebriated. You are a disgrace to our family. Would that years ago I had married Reginald Van Houten, a real man. Instead, I was taken in by your incessant prattle as a second year law student about peer law firms and the such. Little did I know that you would graduate last in your class at Harvard and end up as a non productive "special" counsel at my father's law firm.
35:
But isn't there some rule that two big ass firms can't have the same name? Sort of like the Screen Actors Guild?
Guess I knew what I was doing when I turned down their offer recently...
Holey Fag
Odds that the class of 09 will ever start at Foley?
I am sure that cutting, already frozen, salaries will improve recruiting....
妈的
奶奶的
姥姥的
大爷的
舅舅的
操
3, cramdown salary cuts are a boost to PPP permitted by the general market. Layoffs are based on utilization. If there are too many people for the billable work then someone gets cut.
In your thinking, as long as partners make "x" dollars they'll just relax and keep everyone. But that's not correct; "x" is never enough. If average utilization in a group shows that the partnership could cut a whole associate without causing client work to suffer (including anticipated "rebound" work) or overburdening the survivors (2400+ hrs each) then the associate's gone.
I bet $1000 that the typo on the second page identifies the person that leaked this memo. Their ship definitely be sinkin.
I bet $1000 that the typo on the second page identifies the person that leaked this memo. Their ship definitely be sinkin.
Screenshot? Are screens folded in thirds? These look like cell phone photos of a paper copy of the memo.
妈的祖奶奶的舅姥姥的草他妈的草全世界的大爷
What is a Foley Hoag? A sammich? Mmmmm . . . sammiches.
@43 and 48 -
吸我的阴茎
That is all.
13 - Good points but I would add one. Lawyers have no shame. They are trained to make all kinds of crazy arguments with a straight face. So they naturally don't even think twice about saying that the are cutting associate salaries for the associates' own good.
I lied, jobs died.
I'm Barack Obama?
The average state police officer in Massachusetts is making over 150K a year with detail work ($40 per hour, 4 hour minimum) and he didn't go to law school. He also retires at 80% of base pay with healthcare. Figure 55K to 100K retirement. No firings or lay-offs. Most lawyers will never earn half that and will retire on 20K a year social security payments(assuming that program doesn't collapse). Check out the Boston Herald web page for the verification of the numbers. There are too many lawyers chasing a dream that doesn't exist.
@47: Plus, it's damn hard to get Sharpie off your screen.
#34, you're so wrong. You're making it up.
#39, please let me know what other firms you've turned down, hopefully mine won't be on the list.
#41, I won't take that bet. The COO of the firm is hell bent on reducing the bottom line any which way he can, which does not include cutting his perks or bonuses.
Reduce salaries to $0 and see what happens to your recruiting then. At least you'll be able to make it up on associate development.
#32: "Two big ass firms?" FH is hardly a big firm. A medium (at best) sized office in Boston and a small office in DC along with something called the "Emerging Technology Center" somewhere closer to some partner's Weston MA digs. That's not a big firm, dude.
53 is right.
51, I worked at Holy Fobag. The Managing Partner is DEFINITELY the sort of guy to heap loads of crap like "we are cutting pay, and we fired lawyers, to help recruiting."
PE - if you are such a hot shot, shouldn't you be out there making it rain! Enough already!
Foley was the first to do layoffs in Boston. So second tier or not, that firm goes down in history as a market leader in that market. How sad! :) Wow!
53, did you really just tell people to check the Boston Herald to verify your facts? Wow.
Does nobody read Law.com? Foley Hoag is hardly the first firm to to adjust to $145K. The whole salary structure for new lawyers is absurd. Somebody fresh out of grad school does not deserve a six-figure salary, and none of them would be getting it if it wasn't for the dot-com boom and pissing contests between the big NY firms. And it isn't just a question of the recession--the clients are grinding firms hard on the bills. Last stop for the gravy train.
foley definitely wasn't the first firm in boston to do layoffs either.
All firms are looking to make cuts to preserve the firm. They froze salaries, cut or did away with bonses, they have had layoffs, they have reduced salaries and they have laid off again. A lot of firms are just not busy and cannot find new work. No work, no need for all the workers.
ATL is not being told everything from every firm. There are things going on that are not leaked to this site. For those that are working, you need to realize how lucky you are, for those that are unemployed good luck.
Another fat pig partnership being greedy - why take a 5% cut when they can foist 15% unto the associates.
This reminds me of when Dave Miller fought the indians.
Speaking of medium-sized Boston firms, Sullivan & Worcester, an AmLaw 200 firm with ~ 200 lawyers cut first-year salaries to $125,000 in April and the offer rate for 2009 summers was ~40%. Also, they rescinded some offers to incoming associates in March. Plus, their legal recruiting manager and hiring partner are awkward, bumbling fools when it came to the summer program and hiring decisions.
Dodged that bullet. Thanks Foley Hoag guy w/"cool" hair!
whatever. i'll take 145k to bill 1200 hours.
67 -- Foley is a much better firm than S&W.