Reed Smith

Reed Smith Announces Salary and Bonus News
(Plus other Reed Smith news.)

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Reed Smith.jpgLast May, Reed Smith announced a 10 percent across-the-board salary cut for its associates. The cut went into effect on July 1, 2009.
This week brought salary and bonus news from the firm. From one Reed Smith source:

Reed Smith announced 2010 compensation today. The firm’s “raises” are essentially only restoring the original salary levels that we all had before the firm’s universal 10% cut in 2009. I have not heard of anyone receiving any sort of bonus.

UPDATE / CORRECTION: Actually, it appears that the salary announces were highly individualized — and all over the map. Some associates received sizable raises, some received modest raises, some were kept frozen, and some saw their salaries cut even further. Most appear to be unhappy: “Morale is very low,” said one.
Bonuses were announced too. A different RS source informed us: “Salary and bonus memos are out. Bonuses are per usual, a set structure based on hours.” But the Reed Smith bonuses may have been more theoretical than practical. “I think that very few people hit [the required] hours,” this tipster told us.
There’s a bit more Reed Smith news, most of it not happy….

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(Plus other Reed Smith news.)“

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Update: More Law Firms Help Out Haiti

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Haiti earthquake January 2010.jpgOn Wednesday, we commended the firm of Paul Hastings for moving so quickly to support Haiti earthquake relief efforts. Since then, a number of other top law firms have pledged their support to this worthy cause.
(Okay, Rush Limbaugh questions the worthiness of the cause. But we suspect that Limbaugh’s position — like that of Pat Robertson, who blames the earthquake on Haiti’s supposed pact with the devil — is a minority view.)
The WSJ Law Blog and Am Law Daily have gathered information about what various law firms are doing to help Haiti. We’ve combined their reports with information we’ve received from our own sources, to create a more comprehensive list.
Check it out, after the jump.

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This Week in Layoffs: 11.14.09

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pink slip layoff notice Above the Law blog.jpgEd. note: Above the Law has teamed up with Law Shucks, which has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.

This week, economists missed on the good side — initial jobless claims fell by more than expected. The 502,000 applicants are the fewest since January 3, and the four-month rolling average is at the lowest level since November 2008.

It’s tough to grasp half a million people filing for first-time benefits as good news, but these are troubled times, so we have to cheer where we can. Don’t get too excited, though. Even news that looks good at first glance probably isn’t. The 139,000 people who came off the continuing-claims roster more likely did so as a result of benefits running out or giving up the search than actually finding work.

But don’t be surprised if that number starts creeping back up. A bill was passed last week that will extend benefits by 14 weeks in all states, and six additional weeks in states where the unemployment rate is greater than 8.5%.

All in all, it was a relatively good week in BigLaw, with no layoffs reported. Nonetheless, firms continue to flail about trying to fix their economic models, and we document the efforts after the jump.

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Baker Botts to ‘Hybrid-Lockstep’ in 2010
(Plus more news from Reed Smith.)

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Baker Botts logo.JPGBaker Botts will be throwing itself into the killing lockstep camp sometime in 2010. A tipster reports:

So, Baker Botts – Houston (should be firmwide, though I don’t have have all the details) is adopting a form of the Reed Smith pay structure. …
My understanding may be imperfect, but the notion is that it’s something like a three part system of junior associates, mid level associates, and senior associates, with pay discrepancies laid out among the three. No more lockstep. Unclear what the bonus structure is beyond the nebulous “merit” nonsense.

Reed Smith.jpgThe Reed Smith structure has received a lot of attention. Last month, we mentioned that Reed Smith will categorize associates as junior, mid-level, or senior associates. But those classifications won’t necessarily be tied to how long an associate has been out of law school. So you could see a fourth-year classified as a senior associate making significantly more than a sixth-year classified as a midlevel associate.
Today, the Legal Intelligencer reports that the Reed Smith plan will also include a cut in associate salaries and billing rates:

Reed Smith has cut starting salaries by about 20 percent for the 51 first-year associates set to start in January and, in turn, is cutting their billing rates by the same margin.

You can read the full Reed Smith memo about its salary and billing rate reductions after the jump.
Will the Reed Smith system become the template for associate compensation at other firms? Let’s take a look at what Baker Botts is planning.

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(Plus more news from Reed Smith.)“

Reed Smith Joins the Attack on Lockstep

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Reed Smith.jpgEd. note: We mentioned it briefly in Morning Docket, but thought we’d say a bit more (and give folks a place to comment).
A number of large law firms — although, interestingly enough, not the Cravaths and S&Cs and Davis Polks of the world — are moving away from a lockstep system of associate compensation and promotion. See our collected coverage under Killing Lockstep.
The latest one to jump on the bandwagon: Reed Smith. From Ashby Jones of the WSJ Law Blog:

On Tuesday, Reed Smith announced yet another way to skin the cat. Starting early next year, the firm will go to a sort of hybrid lockstep/merit-based pay system for associates, called CareeRS (get it?). Associates will be categorized as junior, mid-level or senior depending not on how many years they’ve served, but on whether they’ve demonstrated certain “core compentencies.” That is, a particularly talented third-year associate might achieve the “mid-level” designation; a fifth-year on a slower pace might still be a “junior.”

According to the firm’s chairman, Greg Jordan, the move was a response, at least in part, to client demands. “The most painful conversation you can have with a client is to tell him that that all of a sudden, you’re charging more for an associate just because the associate has aged a year,” says Jordan. “Something needed to change. The recession made that clear.”

When the WSJ asked Jordan if the majority of associates would progress normally — getting bumped up to midlevel associate after three or so years, and to senior associate after six or so years — he was a bit vague:

“That may be what ends up being the typical pattern. But we really don’t expect that everyone will take this path. Some will advance quickly, others will need time.”

Hmm…. Should this be cause for concern among associates? How many will, like not-so-smart grade schoolers, get “left back” each year?
Some perspectives, after the jump.

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Fall Recruiting Open Thread: Vault 71 – 80 (2010)

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comparing.jpgWe continue our slog push through the nation’s 100 top law firms, as ranked by our friends over at Vault. Here are the next ten firms, to be discussed in the comments to this post:

71. Reed Smith
72. Bryan Cave
73. Perkins Coie
74. Hunton & Williams
75. Patton Boggs
76. Arent Fox
77. Schulte Roth & Zabel
78. Howrey
79. Chadbourne & Parke
80. Crowell & Moring

Assorted observations about these firms, after the jump.

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Additional Perspectives on Fordham Law v. Reed Smith

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Fordham Law School versus Reed Smith.jpgFrom two distinguished commentators: lawyer and law firm consultant Bruce MacEwen, of Adam Smith Esq., and Professor Daniel Filler, over at the Faculty Lounge.
Above the Law reader sentiment generally supported Fordham Law School and Dean William Michael Treanor. Interestingly enough, both MacEwen and Filler side with Reed Smith. MacEwen confesses to being mystified by Dean Treanor’s handling of the situation; Filler argues that Reed Smith’s late withdrawal from OCI was a minor infraction, and that Fordham’s “punishment” of the firm will only hurt students.
Check out their analyses via the links below.
In This Corner, AmLaw #16… [Adam Smith, Esq.]
Fordham Law v. Reed Smith, Or, How To Scare Away Firms From OCI [The Faculty Lounge]
Earlier: Fordham Law v. Big Law: Reed Smith’s Response
Fordham Law Lashes Out at Reed Smith Rudeness

Fordham Law v. Big Law: Reed Smith’s Response

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Reed Smith.jpgYesterday we covered the decision of Fordham Law School to ban Reed Smith from recruiting on-campus for the next five years, in response to the firm’s last-minute withdrawal from on-campus interviewing at Fordham. The decision was announced by Dean William Treanor in a strongly worded email message.
Dean Treanor’s email, while harsh, seemed to be well-received, at least among ATL readers. In our reader poll, over 80 percent of you deemed it an appropriate response to Reed Smith’s late pullout from Fordham EIW (Early Interview Week).
Reed Smith has now addressed the situation. From the Legal Intelligencer:

Michael B. Pollack, global head of strategy at Reed Smith, said this certainly isn’t a situation the firm was looking for and he suspects the ban isn’t a good situation for the firm or the students. He said he hopes Treanor would reconsider.

“We’re trying to run a business just like he’s trying to run a law school and I appreciate the pressures that he is under and I would hope he would appreciate the pressures we’re under,” Pollack said.

Additional comments by Pollack appear in Gina Passarella’s article.
We also reached out to Reed Smith, which sent us a detailed — and dignified — statement. Check it out, after the jump.

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Fordham Law Lashes Out at Reed Smith Rudeness
Dean Treanor to firm: Don’t come ’round here no more.

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Fordham School of Law logo.JPGWe’ve heard from many frustrated law students who bid on a particular law firm for on-campus interviewing only to learn, after using up a bid or an interview slot, that the firm in question wouldn’t be coming to OCI after all. We’ve even heard from students who were told, mid-interview, that the office they were supposedly interviewing for wouldn’t be having a summer program (but more on that later).
Law firms are certainly entitled to pick which schools they want to interview at. But, as a matter of basic professional courtesy and respect, they should make those decisions as early in the process as possible. When a law firm withdraws from the fall recruiting process at a given school at the eleventh hour, it causes great inconvenience to law students and schools.
What do most law schools do when firms pull out from OCI at the last minute? As far as we know, nothing. In this economy, law firms are in the driver’s seat. They’re the people with jobs to dole out.
But at least one law school has decided to take a stand against rudeness. After Reed Smith announced its late withdrawal from the recruiting process at Fordham Law, the school struck back, banning the firm from recruiting at Fordham for the next five years.
Dean William Treanor announced the move to the law school in a saucy email that truly puts the “F.U.” in Fordham University. The Fordham law folks are located at Lincoln Center rather than Rose Hill, but this message suggests they can brawl like their Bronx brethren.
Update (8/13/09): The firm’s response to the situation appears here.
Read the dean’s complete email message, and vote in our reader poll — yes, another one, we can’t help ourselves (we love to get your opinion on such matters) — after the jump.

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Dean Treanor to firm: Don’t come ’round here no more.“

Nationwide Salary Cut Watch: Reed Smith Cuts Current (and Incoming) Associate Salaries

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Salary Cuts.jpgSince December, Reed Smith has fired 215 people. So the latest news from the firm won’t be all that surprising. This morning, Reed Smith managing partner Greg Jordan sent the following message to the firm’s associates:

Over the past several months, Reed Smith has adopted many changes to our business in response to global economic conditions, changing client demands, and the competitive landscape in the legal industry. Among other things, this has meant lower compensation levels for partners. Today, we are announcing another change which we believe is appropriate to further sound business operations. Effective July 1, 2009, we will reduce associate salaries in the U.S. by 10% across the board.

What is marginally more surprising is the news about Reed Smith’s incoming first-year associates:

We will set the salaries for our incoming class of U.S. associates at a later date, but the new salaries will be at least 10% lower than current first year levels.

As The Dude might say, “That’s a real bummer, man.”
Our informal numbers tell us that fewer than twenty AmLaw 200 firms have cut associate salaries outright (this does not include the numerous firms that have frozen associate salaries). That’s not the best news, but we haven’t reached epidemic levels. Not yet.
Read the full Reed Smith memo after the jump.

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Nationwide Layoff Watch: Reed Smith Cuts Associates & Staff

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Reed Smith.jpgReed Smith already laid off 115 people in early December. Here at the end of the first quarter, the firm has decided it needs to reduce headcount even further. Above the Law has been able to confirm that Reed Smith is letting go 26 attorneys and 74 staff across its U.S. and U.K. offices. A firm spokesperson provided us with this statement:

Specifically, we are initiating the outplacement of 17 associates in the U.S. and have started a consultation process in London that will potentially result in nine associate redundancies. All of the affected associates are in the corporate and real estate areas of our practice, where demand for our services continues to be slow. Overall, this action will affect less than 4% of all of our associates.

I should’ve learned, to play the guitar.
I should’ve learned, to play them drums.
Maybe get a blister on your little finger.
Maybe get a blister on your thumb.

These layoffs bring Reed Smith’s total cuts to 215 employees in the past four months. Let’s hope this is the last round. Good luck to everybody who has been let go today.

Read the full statement after the jump.

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ATL Salary Freeze Round-up: The Firms on Ice

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pay freeze salary freeze pay cut law firm.jpgThe 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.

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