Latham & Watkins: We Have Good News

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It has not been a great year for Latham & Watkins. Everybody knows that the firm laid off a ton of people — 440, to be exact — in February. But it was the firm’s decision to fire first-years who had been at the firm for just a few months that seemed to shock the conscience of Above the Law readers.
The firm took a major hit in the Vault prestige rankings, plummeting from #7 to #17. And we’ve heard anecdotal evidence that Latham had a rough go of it on the recruiting trail this fall.
But perhaps Latham & Watkins is poised for a comeback? Back in October, we reported that the firm was considering unfreezing associate salaries. Last week, we speculated that Latham might be prepared to pay mega-bonuses this year.
Now additional details are leaking out about the firm’s planned salary thaw, and its bonuses. And things are looking good. After a year in the Biglaw doghouse, it looks like Latham may finally be trying to buy its way back into the light.
Details after the jump.


The reports about Latham’s thaw back in October appear to be accurate, and associates at the firm are just waiting for the bigger paychecks. As we’ve said, Latham appears set to make a “true up” raise — which will put people where they would have been if the firm hadn’t frozen salaries last year. One tipster explains it this way:

No official written announcement has come down yet (and it probably won’t until after the new year), but at the monthly firm-wide meetings [office managing partners] announced that the plan was to unfreeze AND give a “double-bump,” so after the new year, we’d all be restored to what we should’ve be getting, class-year-wise.

Some firms are putting in the freeze for a second year, so it does look like a sign of financial health if Latham puts people back to their class level. That will put Latham associates back on par with associates at the top-tier firms that never froze salaries in the first place.
But what about all of that lost salary associates didn’t get from last year’s freeze? Another tipster reports that the firm plans to do something about that as well:

[C]ome bonus time, the firm will include a “make whole” payment for anyone who’s made their hours, i.e., they’ll include the lump-sum salary difference that we missed out on all year in the bonus.

That’s a lot of money Latham is willing to put in the pockets of those that survived the layoffs.
Does that make everything okay? Just how long is the memory of associates and, especially, law students? If Latham starts throwing money around like it’s 2006, will people forget about the 440 associates and staff Latham let go when the going got tough?
Congratulations to the Latham survivors. It looks like the firm is prepared to do right by you.
Earlier: Nationwide Layoff Watch: Latham Cuts 440 (190 Associates, 250 Staff)
Fall Recruiting Open Thread: Vault 16-20 (2010)
Latham & Watkins: Unfreezing Salaries?
Hope For Mega Bonuses at Latham & Watkins?

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