Thursday, June 25, 2009 11:21 AM - By Elie Mystal
Back in May, we reported that DLA Piper decided to cut its associates' salaries. Initially it was a 20% cut on some associates, but after our report the firm moved down to a 10%, across the board, salary cut.
But saving money was apparently only one of the goals for DLA Piper. We can also add DLA to the list of firms that want to end the system of lockstep compensation. The National Law Journal reports:
DLA, the largest firm in the United States, with about 3,785 attorneys worldwide, is one of several firms rethinking its associate program amid the need for cost-cutting brought on by the recession and in light of clients' demand that they pay only for associates skilled enough to deliver consistent quality. The firm hopes by year end to have a new associate compensation, training and promotion structure that discards the traditional "lockstep" system of paying them based on years of service, the leaders said.
"People really want to rethink the model," said Lee Miller, one of the firm's joint chief executives. "I don't think the model is broken, but people want to rethink what they're doing and why they're doing it."
The model isn't broken, but the firm is going to change it anyway? That sounds like some excellent Shock Doctrine logic.
After the jump, more details about DLA's new business model.
Continue reading "DLA Piper to Move Away From Lockstep ... Eventually "
Wednesday, May 20, 2009 10:16 AM - By Elie Mystal
Last week, we reported that DLA Piper cut associate salaries. But on Monday, we followed up that report with news that DLA had made salary cuts of up to 20% for associates who were not on pace to make their hours. Tipsters reported serious frustration with a 20% salary cut based on only a few months of accrued hours.
Well, last night there was a change in policy from DLA Piper. The firm is going to make a 10% cut across the board to all associates, regardless of hours:
We have had many conversations with partners and associates since making the adjustment, and it is clear that there are numerous anomalies in individual associate situations such that people who were typically strong performers would receive the additional compensation reduction. That is not the result we want to achieve, and we are therefore removing the additional adjustment based on year-to-date performance and maintaining a straight adjustment of 10% for all associates. We will continue to reward associates for exceptional performance in 2009 through our bonus program, taking into consideration both the associate's performance and that of the firm.
It is an objectively good thing when a law firm responds to associate concerns. It seems that in this case, a wrong has been righted.
But, of course, not everyone is happy.
Additional complaints, after the jump.
Continue reading "DLA Piper Gives Back 10% of the Salary Cut"
Monday, May 18, 2009 12:31 PM - By Elie Mystal
On Friday, we reported that DLA Piper cut associate salaries by ten percent across the board. But we now know that ten percent was just the starting line for associate salary cuts.
Friday, the firm memo included this language:
Adjustments to all associate salaries at other class levels will be determined and communicated on a case-by-case basis based on class year and performance levels.
It appears that the case-by-case consultation resulted in salary cuts of up to 20% for associates that were not on pace to make their hours. Many tipsters brought this to our attention, as well as some interesting commenters:
Elie/David - what I hope is not overlooked in DLA's move is that they made a calculated move to mislead abovethelaw and its readers by saying that starting salaries were being lowered to 145. That's not true. A number of first year attorneys salaries were lowered to 128k. There are 3rd years making 136k. Their efforts to cover for there salary reductions should be given more exposure.
Other commenters made the point that the decision was all about hours:
You could get great performance reviews/make in excess of your budget for years/ be well regarded/ do pro bono work etc, but still the ONLY thing that was taken into account when cutting salaries was whether you were on pace for the first 4 months of this year. The published memo does not disclose this. You could be a pretty average associate and happen to have been staffed on a doc review for the first 4 months or hoarded your work and hey suddenly you are getting paid more than other associates.
Tipsters emailed us, texted us, even called us on the phone to give us details about the 20% cut. We get into the extra news after the jump.
Continue reading "DLA Piper Salary Cut Follow Up"
Friday, May 15, 2009 2:31 PM - By Elie Mystal
We have a new leader in the clubhouse in terms of Vault Top 50 firms cutting associate salaries. DLA Piper is going down the salary cut road. The internal memo just went out:
We are making an adjustment of our base associate compensation in our major markets to $145,000. In those markets where the starting compensation has been $145,000, we are adjusting it to $130,000. Adjustments to all associate salaries at other class levels will be determined and communicated on a case-by-case basis based on class year and performance levels. We will continue to reward associates for exceptional performance in 2009 through our bonus program, taking into consideration both the associate's performance and that of the firm. We also will not increase paralegal and staff compensation for this year. The timing and implementation of all of these actions will take effect June 8th and be reflected in the June 19 paycheck.
Until today, Baker & McKenzie was the most prestigious firm (according to Vault) that slashed salaries.
But DLA Piper wants people to know that its partners have already taken a hit to their earnings:
Our partners, including the three of us, have already accepted significant reductions in our projected 2009 compensation, and compensation levels for Of Counsel and Senior Counsel have also been reduced. We are now taking the further steps of bringing US associate salaries and staff salary increases into alignment with market realities.
We reported DLA's decision to decrease partner compensation, back in March. Does sharing the pain make associates at DLA feel better about their reduced paycheck than associates at other firms?
One tipster isn't too broken up about it:
On the bright side, at least we're not fired. All the older associates are holding their breath awaiting the "case by case" reviews.
Read the full memo after the jump.
Continue reading "Nationwide Salary Cut Watch: DLA Piper Joins the Party"
Tuesday, April 21, 2009 1:03 PM - By Kashmir Hill
Some of our DC-based readers may have spotted this DLA Piper hate ad making its way around town via taxi. An ATL reader sent us this photo, saying:
I saw this cab on Connecticut Ave. in front of the Mayflower yesterday and it caught my attention. Strange.
Our first response was, "Bad PR for DLA Piper, but doesn't everybody already know that blood money is the currency of Biglaw?" Our second response was to find out about this legislation and reach out to the firm.
The American Lawyer wrote in 2008 about the Piper's playing the flute for the Ethiopian government. Partners Dick Armey, a former House majority leader, and Gary Klein lobbied on Capitol Hill on behalf of Ethiopian Prime Minister Meles Zenawi, who angered human rights advocates in 2005 with violent crackdowns on protesters during the elections there. The American Lawyer reports that the Piper was playing to the tune of over $50,000 a month. That's a whole lot of injera.
The taxi ad refers to a bill introduced by Senators Feingold and Leahy "to reaffirm United States objectives in Ethiopia and encourage critical democratic and humanitarian principles and practices." Or. in other words, a bill to encourage Ethiopia not to inflict violent crackdowns on its citizens. DLA Piper's lobbying efforts may have paid off. The bill has been languishing with the Committee on Foreign Relations since 2008.
DLA Piper's spokesman told us that the firm's representation of the Ethiopian government actually ended in November. A statement from the firm refers indirectly to the protesting taxi driver (and other DLA Piper haters): "There are some very vocal elements of the Ethiopian Diaspora, particularly in the Washington area, who are opponents of the current administration in Ethiopia and go to great lengths to try to embarrass or demean those who are associated with it."
See the full statement, after the jump. DLA Piper may no longer have Ethiopia as a client, but the firm is actively helping to churn out new lawyers over in Addis Ababa.
Continue reading "The Ethiopian Community in Washington is Hating on DLA Piper "
Wednesday, April 15, 2009 11:07 AM - By Kashmir Hill
We hope you 3Ls haven't signed leases in your new cities if you haven't gotten a definite start date yet from your firm. Though it's already mid-April, firms are continuing to assess their work levels and are determining that they won't need new associates this fall. And, in some cases, maybe not even next fall.
Thanks to the really sucky economy -- we've given up on putting this eloquently -- many law firms have pushed start dates back to 2010, and even 2011. The announcements have been rolling in at a rapid clip, so we're bringing you a new round-up.
DLA Piper is one of the latest to tell its incoming associates to write off 2009. From a recruiting e-mail sent around yesterday:
First, we expect that Monday, January 11, 2010 will be the start date for the next incoming class. In addition to the bar stipend program, the firm will pay you an additional stipend of $5,000 per month in November and December, 2009. This stipend will be paid to all members of the class and is not dependent on when you join the firm.
Second, since the incoming class may also be larger than our workflow needs in January 2010, we want to encourage you to try and secure a pro bono or community fellowship for up to one year prior to joining the firm for which we will compensate you... Should you choose to participate in such a fellowship, we will pay you a stipend of $5,000 per month while you are actively engaged with the fellowship, for a period of up to one year (January 1, 2010 to December 31, 2010), provided you obtain a firm-approved position with a government, civic or non-profit organization serving the public interest. We encourage you to consider this option, particularly those of you who are focused on a transactional practice area since we expect the financial markets to continue to be slow overall.
Finally, while we are offering the pro bono and community fellowships now as a voluntary option, we will continue to monitor the economic climate and our work force needs between now and January 2010 and reserve the right to offer a fellowship assignment in lieu of a Firm assignment.
So.... DLA Piperites can maybe start January 11, 2010, but the tone of that e-mail is just short of pleading them to seek out a public interest gig for the year.
Getting a taste of the nonprofit life is not the worst thing in the world. At least Biglaw-bound associates will get to experience a normal 9-to-5ish work schedule before putting on the golden shackles and resigning themselves to 10 p.m. order-in sushi dinners at the office from 2011 on (assuming market conditions improve!).
Check out the latest round-up of start dates at firms across the country, after the jump.
(Ed. note: We're continuing to update the list as new tips come in. The last update occurred at 5:49 p.m. on April 18. Thanks to all of you who have sent us tips!)
Continue reading "Nationwide Start Date Round-up... Yup, Another One"
Monday, April 6, 2009 10:10 AM - By Isaac Smith
Ed. note: The legal world is much bigger than New York, or Washington, or even the United States. Welcome to Letter from London, a weekly dispatch from the other side of the pond. Our U.K. correspondent, Isaac Smith, will expose ATL readers to the latest goings-on in the London legal world. You can reach Isaac by email, at isaacsmithlondon@googlemail.com.
You thought Arent Fox telling deferred incoming first years that they are "free to pursue other options" was bad? Well, you Arent going to Foxing believe what UK firm Shoosmiths did last week.
In a letter leaked on Tuesday, Shoosmiths gives its 2010 intake three options: defer for a year, defer for two years or withdraw. And whatever choice you make, adds the letter, you get £0 compensation. Nice.
Outrage duly erupted on Legalweek.com's message boards:
"Disgraceful" wrote one poster, "Shame on you Shoosmiths!" another. And my personal favourite: "I think lawyers at all levels are now treated as industrial prostitutes."
Still, so far no major firm has told recruits they have to pursue other options. I wonder how long until that changes.
After the jump, US firms making partners in the UK.
Continue reading "Letter from London: Foxhunt!"
Monday, March 23, 2009 11:03 AM - By Elie Mystal
Last Monday, Dewey & LeBoeuf informed the world that some of its partners would be receiving less money. This past Friday, The Recorder reported that DLA Piper is also officially reducing partner compensation:
DLA Piper informed all of its U.S. partners on Friday that it will reduce pay for most of them by 11.5 percent in 2009, while strong performers will get more money.
I guess it was only a matter of time before the horrible economy started taking a bite out of partner draws:
DLA's pay cut is part of an annual budget projection process and is not related to the firm's 2008 results. The firm ended 2008 with zero debt and will end 2009 with zero debt, said O'Malley.
As opposed to 2008, when the economic downturn was not full blown until the fourth quarter, firms are preparing for four quarters of dried-up demand in 2009.
Of course, after the jump we have to get into the obligatory "but things here are just great" rhetoric.
Continue reading "DLA Piper Pays Partners Less"
Friday, February 27, 2009 4:00 PM - By Laurie Lin
We interrupt today's blood-letting to bring you the latest from the NYT weddings page. In keeping with the dark mood around here, all of this week's contestants are brunettes. Here they are:
1. Sophie Jensen and Robert Lalley
2. Vicky Hallett and Jeffrey Miller
3. Gillian Deutch and Daniel Solinsky
See which of these newlyweds still have jobs, after the jump.
Continue reading "Legal Eagle Wedding Watch 2.22: Six Non Blondes"
Thursday, February 12, 2009 1:48 PM - By Elie Mystal
On Tuesday we told you that DLA Piper laid off 140 people in the U.K. At the time, we mentioned that the firm declined to comment on whether those cuts would be mirrored in the U.S. offices.
We think the firm just commented. A firm wide statement was just sent to DLA employees:
In light of the deepening economic downturn over the last number of months, we have carefully considered and reduced expenses across virtually all of our operations. While we had hoped for a rebound in economic activity, we believe that a major improvement in 2009 is increasingly unlikely. We value all of our people and are very grateful for their contributions to the firm, and we have worked hard to consider and employ every reasonable measure to avoid lawyer and staff reductions. Our business model factors in some normal attrition in a healthy economic climate, but we have not seen that in this deteriorating economic environment. Given this, and overall market conditions, we have concluded with deep regret that we must reduce our ranks by approximately 80 associates and 100 staff in the U.S..
We understand that a number of first year attorneys were part of today's cuts.
Read the full DLA Piper statement after the jump.
Continue reading "Nationwide Layoff Watch: DLA Piper Lays Off 180"
Tuesday, February 10, 2009 1:37 PM - By Elie Mystal
It should come as no surprise that one of the largest international law firms has suffered from significant international layoffs. The Lawyer reports today that DLA Piper has laid off 140 employees in the U.K.: 30 attorneys, and 110 support staff. According to the report:
An internal email announcement, seen by The Lawyer, told staff: "There has been a downturn in economic activity since we last reviewed resource and when we budgeted for our 2009 business year. We expect the current market conditions to continue for some time.
DLA released this statement in response to the reports:
Having carefully considered current volumes of business activity and the predicted impact of the ongoing downturn we are conducting a formal redundancy consultation process in the UK which is likely to result in up to 140 redundancies. Approximately 30 are likely to be fee earners and the remainder will be direct and indirect business support staff in our 8 UK locations. This is a difficult but necessary decision based on our reassessment of resource levels following the continuing deterioration of the market. This prudent action will align our capacity levels with existing client demands.
DLA spokespeople declined to comment on any U.S. fallout from these U.K. moves. DLA has already instituted a salary freeze, so hopefully their costs are under control.
Update (5:05): Additional sources have informed us that the process of laying off associates works differently in the U.K. than it does here. There is a "consultation" phase that happens before layoffs, and that phase can take a few months. Official numbers on overall force reductions won't be available for a couple of months, as DLA goes through the consultation process.
DLA Piper: 140 more jobs to go [The Lawyer]
Earlier: Nationwide Pay Freeze Watch: DLA Piper
Prior ATL coverage on law firm layoffs
Tuesday, January 27, 2009 12:07 PM - By Kashmir Hill
As we noted in yesterday's Morning Docket, even the New York Times has taken note of the salary freeze trend at law firms. The Times reached out to Above The Law's own David Lat for the story:
Although many associates are angry about the freezes, others are relieved, said David Lat, founding editor of AboveTheLaw.com, a blog about law firms and the profession.
"There is this sense that firms didn't act prudently during the boom and now they are getting religion, and that it's better late than never," Mr. Lat said. "Many associates we have spoken to think the freeze probably saved jobs."
At the beginning of the month, we did a round-up of firms that have frozen 2009 salary rates at 2008 levels. That list was 16 firms long. Since then, quite a few other firms have announced freezes. Due to frequent requests, we're updating the round-up list since the number of firms with freezes (that we know of) has more than doubled, to 33 32. Check out the as-comprehensive-as-we-can-make-it list, after the jump.
Recently announced salary freezes include "solid ice freezes" at Blank Rome and Townsend and Townsend and Crew; and "Slurpee freezes" at Bingham McCutchen, Fish & Richardson, and Texan firm Andrews Kurth.
Memorandums, as well as a new list of all firms with "solid ice" and "Slurpee" freezes, after the jump.
Continue reading "Updated Salary Freeze Round-up: Even More Firms on Ice"
Wednesday, January 7, 2009 8:05 PM - By Kashmir Hill
The new year is shaping up to be a cold one. As we noted in our 2008 Year in Review series, one of the biggest stories heading into 2009 has been that of the salary freeze. Rather than instituting lock-step raises for associates entering a new class year, a number of firms have informed associates that their salaries will remain at 2008 levels.
There have been two types of freezes: the "Solid Ice freeze"--with salaries frozen through all of 2009--and the "Slurpee freeze"--where firms are sticking with 2008 levels for now, but promise to revisit the decision later in the year.
Many an ATL reader has requested a round-up, and we aim to please. So find your pleasure, after the jump. Some of the firms have been reported on before, and some are new.
If you know of other frozen firms, send us an e-mail at tips@abovethelaw.com with the subject, "Salary Freeze: FIRM NAME." Also, if your firm has raised salaries as expected, feel free to send us the news, with the subject "Salary Raise: FIRM NAME." While freezes are news, raises as expected aren't, so we will not be covering firm by firm, but we may do a round-up.
Find the list of the sixteen firms that have frozen, after the jump.
Continue reading "ATL Salary Freeze Round-up: The Firms on Ice"
Friday, January 2, 2009 5:45 PM - By Kashmir Hill
DLA Piper's associates received an e-mail today at 4 p.m. about bonuses. The memo says less about bonuses though than it says about 2009 salaries. (Bonus decisions will be made later in January, as they were last year.)
The salary decision for 2009? Another major firm is getting its freeze on. Here's an excerpt from the e-mail:
DLA Piper, because of its global platform and practice diversification, is well-positioned competitively and financially to weather this downturn, but neither we nor our clients are immune from its impacts. This difficult business environment is certain to continue in 2009, and as a matter of prudent management, the firm will not increase associate salaries for 2009 in the U.S. Associates moving to the next class year will continue to receive the same base compensation as they received in 2008.
We asked our tipster about the reaction around the office:
Well, it's only been an hour, but I think it's a terrible move. DLAP already has a reputation as a scrimper among the top-50 - this will not help.
At least other top-50 firms did it first. Like Latham and Orrick, this pronouncement is a definite freeze, and not a maybe-we'll-reassess-if-things-look-brighter-later-in-the-year freeze.
Full text of the e-mail after the jump.
Continue reading "Nationwide Pay Freeze Watch: DLA Piper"
Wednesday, November 26, 2008 1:01 PM - By Kashmir Hill
This story sounds like something written by Dr. Seuss, esquire. The city of Louisville, Ky., had planned to incorporate Seussian characters into its annual Christmas display this year. But the plans have been scrapped after receiving a cease-and-desist letter from DLA Piper's Barbara Orr, who represents Seuss Enterprises.
From the Associated Press:
The city had planned to use "How the Grinch Stole Christmas" as part of its theme for the annual Light Up Louisville holiday celebration. The display called for an area called "LouWhoVille," complete with costumed characters from the Dr. Seuss classic such as Cindy Lou Who and the Grinch...
The letter demanded the city and the Louisville Convention and Visitors' Bureau halt any use of the characters for the Christmas display and agree not to use the characters in the future without permission. It threatened legal action if the city and tourism bureau did not comply.
The city is complying and renaming the display Lou-ville. "It appears these lawyers' hearts are two sizes too small," Louisville Mayor Jerry Abramson told the AP.
We say shame on Abramson for perpetuating small-hearted lawyer stereotypes, especially given that he's a Georgetown Law grad.
Seuss lawyers stop holiday Who-ville in Louisville [Associated Press]
Wednesday, November 19, 2008 6:44 PM - By Elie Mystal
The economy is in the toilet and law firms are scrambling to adjust. Usually this means "firing associates," but DLA Piper has done something really interesting and brought changes to the partnership instead of firing associates:
Some 275 "income" partners who don't have an ownership stake will be invited to join the ranks of 300 equity partners, provided each makes a capital contribution that could range up to $150,000, according to legal industry sources.
Look, for all we know associate layoffs could be right around the corner at DLA or any other Biglaw firm. But almost doubling the number of equity partners means that profits per partner will be squarely in the hands of each individual partner to generate business.
Legal industry recruiter John Cashman of Major Lindsey & Africa LLC says DLA's move is unprecedented and likely to turn up the heat on attorneys to bring in clients -- a crucial factor in partner compensation.
"It's very clear to their (junior-level lawyers) it's either up or out: We want business generators or worker bees. They want to send that message," Mr. Cashman says.
Real cost savings for DLA after the jump.
Continue reading "DLA Piper Changes Partnership Structure"
Monday, November 3, 2008 10:33 AM - By Elie Mystal
Last week, we reported that DLA Piper was canceling their Chicago holiday party and laying off a number of staffers. As we've seen from many other firms, when times are tough and morale is low -- it's time for a "Yay Us" firm-wide email:
We wanted to share with you some thoughts we recently provided the partners about the impact of the current market difficulties on the Firm, this year and beyond. The short answer is that the Firm is strong and well positioned and that we are confident about its future. That said, we thought it would be helpful to give you our assessment of the current economic situation and how we need to and are responding to it.
You wonder how the 15 staffers who were laid off feel about the firm's future? But we must applaud firms who talk straight with associates. Unlike the message from Chadbourne & Parke, DLA Piper didn't bury a stealth hiring freeze in their letter.
As far as our strategy is concerned, we continue to believe that we are well positioned, and better positioned than most. ... That said, the days of business as usual are over. We must work harder than ever to control expenses and we must be aggressive in the identification and pursuit of new business opportunities created by recent developments. In many respects we have already made significant progress, but there is much more to do and each of you should be thinking about the clients with whom you have relationships who would benefit from our help in these areas.
As many of you know, DLA Piper is a behemoth of a law firm. They claim 3,700 lawyers worldwide. That sounds like a lot of mouths to feed. But with over 1,000 partners, perhaps their size is a strength?
In any event, one of the biggest law firms in the world is telling their army of associates that everything is going to be alright.
Read the full memo after the jump.
Continue reading "Happy Time at DLA Piper"
Thursday, October 30, 2008 4:55 PM - By Elie Mystal
In what could be a trend, DLA Piper has canceled the holiday party for their Chicago office. The move is similar to Fried Frank's decision to scrap their holiday festivities, but there is no indication on whether DLA intends to donate any of their party money to charity (as Fried Frank did).
Spokespeople for DLA Piper did not immediately respond to a request for comment.
It's not just the legal community that's scaling back on holiday cheer. Yesterday, Barclays announced they were canceling their holiday party too. For a complete list of the financial firms that have gone Grinch, see our sister site, Dealbreaker.
The holiday party is just one notch on the ever tighter belt. More after the break.
Continue reading "DLA Piper Chicago Cancels Christmas/Staffers"
Thursday, September 11, 2008 4:17 PM - By Elie Mystal
We received some chatter this week about DLA Piper shortening their summer program. Interviewees on the east-coast have been told that the program would be only 10 weeks long, as opposed to the 11 or 12 weeks they were expecting.
DLA Piper spokesperson Jason Costa assured us that scaling back was not a reaction to the downturn in the economy:
2/3rds of our summer programs were already ten weeks long. Some were a little bit longer and some were a little bit shorter. About a year ago we decided we were going to standardize most of our summer programs to a ten week term, which impacted a couple of offices on the east coast. The result is that all of the summer programs are going to be over by early August.
Costa went on to say that the change was made to so they could be finished with their summer program by the time OCI starts in late August.
More about the 2009 summer class after the jump.
Continue reading "DLA Piper: Summer Program to Run 10 Weeks Long For All Offices"
Wednesday, September 3, 2008 1:47 PM - By Elie Mystal
We continue our series on no offers with new information from DLA and Bryan Cave.
First the good news. The reports on DLA Piper no offers seem to be exaggerated. We had heard that as many as 1/3rd of the of the DLA summer calls had been no offered. But DLA spokesperson Jason Costa assures us that the final number of offers will be "significantly above" 2/3rds of the class.
Costa reports that DLA's summer associate review is still ongoing. Therefore there are DLA summers who will receive offers from the firm, but have not yet been contacted.
But we're not living in the 90s and a 100% offer rate is probably a little too much to hope for. Costa emphasized that an "overwhelming majority" of summers will receive offers.
Costa also said that he was not aware of any summers that had been "wait-listed," or received offers yet told to continue looking for other employment.
The people at Bryan Cave also emphasized the strength of their summer class, while admitting that not every summer associate would be receiving an offer.
After the jump, firms try to locate the magic number.
Continue reading "Nationwide No Offer Watch: DLA and Bryan Cave"
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