Last month, Philly-based midsized firm Wolf Block joined Thacher, Thelen, Heller, & Morgan & Finnegan as victims of the Great Recession. The firm officially dissolved on March 23.

The press release at the time said:

WolfBlock will remain in the practice of law for several months to protect the interests of its clients, employees and creditors. The decision to unwind was reached in view of a confluence of unfavorable factors: the economic recession, especially in the firm’s core real estate practice; the constriction of credit occasioned by the ongoing banking crisis; and the intended and anticipated departure of significant partners and practices.

We now know where some of those partners and practice groups went. Duane Morris is picking up 50 of 290 WolfBlock attorneys, including the firm’s Trial Practice Group, Employment & Immigration Practice Group, and Business Reorganization and Financial Restructuring Practice Group.

It’s not a good time to be part of a Real Estate Group, but two Real Estate partners and one associate managed to make the jump.

From the Duane Morris press release:

“When this unique opportunity materialized to add such a prominent group of lawyers from a venerable institution, we acted immediately,” said John J. Soroko, Chairman and CEO of Duane Morris. “These lawyers bring an impressive level of experience, knowledge and business acumen that will integrate well with Duane Morris’ international platform. Our collective goal is to take their already significant practices to the next level.”

The lawyers will be joining Duane Morris’s offices in Philadelphia, Cherry Hill, N.J., and New York. See the full press release and the names of the saved, after the jump. As to the other 200+, WolfBlock attorneys, we’ve not seen any press releases as to their fates.

Late last night, a tipster told us of “a big round of administrative staff cuts” at Duane Morris. They were centered on the Philadelphia mothership, but also included other offices. As for the extent of the layoffs, “no good sense of how many, but big enough that the local managing partner fired off an email encouraging folks to come by his office and ask questions.”

This morning brings confirmation of the cuts, from the National Law Journal:

Duane Morris, an international law firm with Philadelphia roots, has cut about 18% of its marketing and business development staff, making staff reductions that echo moves at other firms in recent months.

The firm, which has about 650 attorneys, now has a marketing and business development team of 30 to 35 people, after eliminating seven managers and staff and hiring three more senior executives in the past few months, said Ed Schechter, the firm’s chief marketing officer.

Most of the eliminated jobs were in Philadelphia, where the bulk of the department’s staff is based, but some were in other offices, including Chicago.

True to form, they’re chalking it up to enhancing efficiency, rather than the tanking economy:

At Duane Morris, cost-cutting was a “secondary” consideration, with the firm primarily interested in building up a more experienced and leaner team, Schechter said in an interview.

Reductions in force don’t sound very conductive to “building up” a “more experienced” team. But a “leaner” one, certainly.

Duane Morris cuts marketing, business development staff [National Law Journal]

We’ve previously covered Denver and Hartford. Today our series of posts profiling associate compensation in various smaller legal markets — smaller than New York or Washington or Los Angeles, at least — turns to Philadelphia.

What’s going on in the City of Brotherly Love? Based on some recent articles we’ve read, it seems that the standard starting salary in Philly hovers between $135,000 and $145,000.

At $135K: Schnader Harrison Segal & Lewis; Ballard Spahr Andrews & Ingersoll; Duane Morris; Blank Rome; Wolf, Block, Schorr & Solis-Cohen; and DLA Piper.

At $145K: Morgan, Lewis & Bockius; Dechert; Drinker Biddle & Reath; and Pepper Hamilton.

Will Philly move to the $160K scale anytime soon? If so, when? And who will lead the charge?

In the cheesesteak metropolis, starting salaries aren’t the only issue. Per a commenter:

[W]hen you do [Philadelphia], please make sure to point out our mid-level comp which sucks. We get about a 5k raise per year (though [in] some years we do get 10k but not most). After 7 years we’re just clearing 200k.

Interesting — and depressing. Is so-called “compression” higher up the seniority ladder a more pressing salary issue in Philly right now than the state of starting salaries?

Please discuss, in the comments. Thanks.

Hangley Aronchick Raises Associate Salaries to $135,000 [Legal Intelligencer (subscription)]
Pepper Hamilton Raising First-Year Associates’ Salaries by $20,000 [Legal Intelligencer (subscription)]

Paralegals, we’re still looking for your income information; please help. Details here.

While we’re on the subject of money, check out this article, by Gina Passarella for the Legal Intelligencer, concerning law firm finances. It’s quite enlightening.

If you think of a big law firm as doing nothing but spinning off mountains of cash to its partners, think again. Cash flow can be a two-way street. Many firms require their partners to make hefty capital contributions during the time that they’re partners, to finance firm operations and growth:

[A]n equity partner at a large firm is typically expected to place between $400,000 and $1 million in capital contributions with the firm over the lifetime of his partnership. The firm then withholds, for example, 5 percent of each paycheck until the partner reaches the required amount. At that point, the partner has fulfilled her capital contribution obligations unless the firm decides to increase the requirement, [Altman Weil consultant Ward Bower] said.

Generally, when a partner leaves the firm, the capital contributions are dispersed to them within a set period of time or in a lump sum, Bower said. Some firms, however, could tie up the capital contributions over a period of years, Attorney Career Catalyst founder Frank D’Amore said. That could be a “silent” way of making it more difficult for a partner to leave, he said.

So when you read about astounding profits-per-partner in the American Lawyer, don’t automatically assume that the partners get to take home every dime. At Duane Morris, for example, the firm takes four percent a year out of each equity partner’s pre-tax income for capital contributions. At Pepper Hamilton, equity partners generally kick in around 19 to 20 percent of their budgeted income toward capital contributions. A fifth of your paycheck is nothing to sneeze at.

But Biglaw associates, don’t pity the partners just yet. Many firms have no capital contribution requirement, financing their operations using debt (in the form of loans taken out by the law firm as a whole). Other firms finance their operations out of current income. And even at firms with sizable capital contribution requirements, the partners still take hoome way more than you do.

(Does this depress you? Well, cheer up. If you play your cards right, someday YOU might be the partner in the corner office, taking home a high six-figure or low seven-figure income.)

Firm Finances: Your Views May Vary [Legal Intelligencer]