The New York Times has a nice survey piece about all the salary cuts imposed upon American workers. It’s a story that anybody holding down a job through this recession is probably aware of:
Local and state governments, as well as some companies, are squeezing their employees to work the same amount for less money in cost-saving measures that are often described as a last-ditch effort to avoid layoffs.
Yeah, we know, things are crappy.
But in its zeal to show that things are difficult for almost all workers, the Times seems to lump Biglaw in with the group of companies that are trying to cut costs by slashing salaries. As regular readers of Above the Law know, that might have been true in 2009. But in 2010, most Biglaw firms are not cutting associate salaries….
K&L Gates is cutting salaries, again. This time the cuts seem directed at K&L Gates associates in the firm’s Boston office. But more importantly, these appear to be tactical cuts that will hurt associates currently at the firm, while doing as little damage as possible to K&L’s recruiting brochures.
A tipster reports the headline news:
K&L Gates slashed salaries last week, at least in their Boston office .. all associates who didn’t meet the billable target (1950 hours) last year saw their salaries cut by 10%. The best part? First year associates–who started with the firm in January, 2010 (two months ago) still retain their starting salary of $160,000. Translation? Most, if not all second year associates are now making 10% less than the first years who have been practicing for 2 months. The second year associates were told that they had their “free pass” last year, which is why the salary disparity is justified.
Yeah. Morale in this office sucks right now.
Multiple tipsters sent in reports similar to this one, all of them were pissed. Not just the second years …
Last week, we told you that Katten Muchin was delaying its decision on associate salaries. The firm finally got around to telling people how much they’re paid this week, and we can see why there was a long delay. See, when you try to do 1,001 different things all that same time, it gets pretty complicated.
All of the salary news was communicated via individualized firm memos, so a tipster explains the top line news: Katten is moving down to a $145K pay scale:
They went down to the 145K scale (145,000; 160,000; 170,000; 185,000; 210,000; 230,000; 250,000; 250,000; 250,000). And no, those last 3 numbers are not errors.
Well, for Katten associates that were frozen last year, the new scale still gives some of them a pay bump, if they moved up a class year.
But not every Katten associate will be moving up a class year …
Everybody knows that the Charlotte legal market has taken a beating during the recession. But we didn’t know that it was so bad that the firms couldn’t afford to pay people. This tip comes in from Charlotte-centric Moore & Van Allen:
Just passing along in case this warrants further investigation (i.e., if anyone still gives a crap about Charlotte-based AmLaw 200s). Many of us are sick of the free pass our firm has gotten in the media w/r/t layoffs and now, associate comp changes.
Associates were informed of a new salary scale on Friday for Charlotte (the highest paying market). First years will make 125. Turning over a new leaf in “compression”, each year will increase by a mere 5k. Associates were informed of their 2009 bonuses, as well. MVA has a completely discretionary bonus system. There were a few 50k bonuses, but (curiously) a couple of bonuses that were less than 5k. I didn’t know that bonuses even came in such small increments.
MVA’s Charlotte office wasn’t on a $160K scale to begin with. But tipsters report that $125K is still a significant paycut.
The good news is that the double salary freeze, which has apparently resulted in first- through third-year associates at Winston all earning $160,000, may be thawing. Managing partner Thomas Fitzgerald sent a memo — this time to its intended recipients — indicating that raises are on the way.
The bad news is that Winston associates don’t know how much of a raise they’ll be getting — and the most they can hope for is a salary that matches the market. The memorandum contains the standard $160K salary scale — 160-170-185-210-230-250-265-280 — but states that “[s]alary levels in each associate class will range up to the maximum base compensation levels set forth” in the memo (emphases added).
The Winston associates we’ve heard from are upset. They’re unhappy not just about the move away from lockstep, but over the firm’s failure to set forth in detail how salaries will be determined. Most of the other firms that have abandoned lockstep have set forth elaborate systems for evaluating associates to determine their compensation and advancement. The Winston memo simply states: “Individual associate salaries will be determined on a case by case basis based on seniority, performance and productivity factors and will be communicated separately to each associate.”
This is a “black box” approach to compensation. It’s used by other big firms — e.g., Jones Day — but it’s a significant departure from Winston’s historical practice. It’s not what Winston associates signed up for when they joined the firm.
But then again, thanks to the Great Recession, lots of Biglaw associates aren’t getting what they expected when they joined their firms. And if associates aren’t happy, with compensation or any other aspect of their employment, their firms will tell them: you’re free to leave. In the words of an unemployed woman quoted in this weekend’s New York Times, “There are no bad jobs now. Any job is a good job.”
There’s a little more bad news about Winston associate salaries. Find out what it is, and read the full Winston & Strawn memo, after the jump.
Is Biglaw getting over the gloom of the recession? Back in October, Morrison & Foerster was feeling pessimistic about attorney salaries. It decided to cut salaries for first-year associates from $160,000 to $145,000. Only associates in pricey New York and Asia — MoFo has offices in Beijing, Hong Kong, Shanghai and Tokyo, all expensive cities — were spared the cut.
Note, however, that the market for first year salaries among national firms is undetermined at this time. Given that, we will continue to assess starting salaries, in light of market trends, and may elect to adjust as required based on larger market developments.
Well, MoFo has assessed, and MoFo has decided to beef up its salaries. Associates got news this week that first year salaries are back up to $160k. And the raise is retroactive to January 1st. From the firm email that went out on Tuesday, available in full after the jump:
Although a great deal of uncertainty continues regarding how the economy will perform in 2010, we, like our most successful competitors, remain in demand. We are planning conservatively for 2010. However, if 2009 is a predictor, 2010 will provide opportunity despite its challenges.
MoFo is known for being a little quirky. In keeping with its individualistic streak, it’s decided to buck the Cravath scale for its 2009 bonuses. Bonuses range as high as $65,000, but only if you clocked the requisite number of hours.
There’s good news at Cooley Godward Kronish. The firm was among the many that froze salaries last year. This month, Cooley announced it’s more of a hottie.
The good news is that the firm is taking salaries out of the freezer. The bad news is that the salaries have suffered some freezer burn.
The firm’s new base salary scale reflects some chipping away.
Many associates are hoping that 2010 will bring an end to the layoffs, pay cuts and deferrals of 2009. But so far January has brought more of the same at severalmajorlawfirms.
This week, our ATL / Lateral Link survey asks whether you think your firm will institute more layoffs and pay cuts in 2010 or if things are finally on the rebound. We’ll use the information to update the ATL Career Center and bring you the results next week.
If you have information about your firm that you want to share with other career center users, please email us at email@example.com.
Way back in November 2008, Bryan Cave became one of the first firms to freeze associate salaries. At the time, the firm said that it was only delaying its planned salary increase by three months. But firms said a lot of things back in 2008 that proved unworkable in 2009.
A tipster reports that the freeze is on again at Bryan Cave for 2010. The firm hasn’t made a formal announcement about it or issued an internal memo, nor has it responded to our multiple requests for comment. But a few people have been informed internally that the freeze is on again for 2010 — and we have not heard from anyone who has had a pay raise so far in the new year. If you have additional information on how widely this “no pay raise” message has been disseminated, let us know at firstname.lastname@example.org. UPDATE: Although there was no memo, there were meetings at which a continued salary freeze was announced.
But that’s not all. If you look at the full scope of Bryan Cave’s actions, the firm appears to be in some very special company.
Add Dickstein Shapiro to the list of firms that have decided to do away with lockstep associate compensation. As of January 22, Dickstein will adopt a new merit-based compensation system. Like many firms that have abandoned lockstep, Dickstein will be using a three-tiered system, similar to Orrick’s compensation structure.
Starting salary for new Dickstein associates will be $145,000. Or maybe it will be $160,000. Honestly, I can’t tell you with certainty what new associates will be making.
It’s not my fault. I read the original memo and everything. I talked to friends and sources and a spokesperson for the firm. I prayed on it. I just can’t seem to pin down one solid number for first-year associate salaries.
After the jump, why don’t you guys take a look at the memo? Maybe you’ll have more success divining its meaning than I did.
Average law school debt for graduates of private universities hovered around $122,000 last year. With only 57% of new attorneys actually obtaining real lawyer jobs, recent graduates have a lot to consider when it comes to managing their student loan payments. Thanks to our friends at SoFi, today’s infographic takes a look at student loan debt, including the possible benefits of refinancing for JDs…
Kinney Recruiting’sEvan Jowers is currently in Hong Kong for client meetings and still has a few slots available through October 22. Evan will also be in Hong Kong November 14 to December 15. Further, Robert Kinney has been in Frankfurt and Munich this week and is available for meetings with our Germany based readers.
One of our key law firm clients has referred us to one of their important clients in the US, Europe and China – a leading global technology supplier for the auto industry – in order to handle their search for a new Asia General Counsel and Asia Chief Compliance Officer.
Kinney is exclusively handling this in-house search.
This position will have a lot of responsibility and include supervision of eight attorneys underneath them in the Asia in-house team. The new hire will report directly to the global general counsel and global chief compliance officer, who is based in the US. The new hire’s ability to make judgement calls is going to be as important as their technical skill set background.
The position is based in Shanghai and will deal with the company’s operations all over Asia and also in India, including frequent acquisitions in the region.
It is expected that the new hire will come from a top US firm’s Shanghai, Beijing or Hong Kong offices, currently in a top flight corporate practice at the senior associate, counsel or partner level. Of course, the candidate can be currently in a relevant in-house role.
The JOBS Act created new tools for companies to publicly advertise securities deals online. As a result, thousands of new deals have hit the market and hundreds of millions in capital has been raised, spurring a wealth of new business development opportunities for attorneys.
Fund deals, startup capital raises, PIPE deals and loan syndicates are just a handful of the transactions benefiting from the JOBS Act. InvestorID FirmTM is a platform designed to help attorneys equip their clients with the workflow, marketing and compliance tools to publicly solicit a securities offering online. By providing clients with the tools to painlessly navigate the regulatory landscape of general solicitation, InvestorID FirmTM helps attorneys add value above just legal services.
The Jumpstart Our Business Startups Act (JOBS Act) went into effect in 2013 and permits Regulation D offerings of securities to be advertised publicly. This means that funds and companies can now use social media, emails and web sites to market transactions to new “accredited” investors.
However, with these new powers come new pain points. InvestorID FirmTM provides a secure, fully hosted, cloud-based platform with a breadth of tools for your clients, including: