Salary Cuts

Nationwide Salary Cut Watch: Alston & Bird Makes ‘Temporary’ Cuts

By

Salary Cuts.jpgYou almost have to respect the extent to which some firms will torture the plain meaning of things to make bad news seem like no big deal. On that scale, Alston & Bird is one of the masters.
Alston & Bird associates were informed today that the firm is cutting salaries by $5,000 for all associates. But A&B wants you to know that it is a “temporary” salary decrease! It only applies through the end of 2009. Isn’t that nice?
Do you think salaries will automatically rebound at the start of 2010? If so, you haven’t been following along with Alston & Bird.
Let’s check out some recent history after the jump.

double red triangle arrows Continue reading “Nationwide Salary Cut Watch: Alston & Bird Makes ‘Temporary’ Cuts”

Sign up for the Above the Law newsletter

Subscribe to our free daily email and get breaking news, commentary, and opinions on law firms, lawyers, law schools, lawsuits, judges, and more.

Nationwide Salary Cut Watch: Venable Uses a Magic 8-Ball

By

Venable logo.jpgQuestion: Will my Vault 100 firm protect my salary despite the recession?
Answer: You must be using some other kind of 8-ball.
Venable might be Washington, D.C.’s weirdest law firm, but you can’t eat quirky. Yesterday evening, Venable announced pay cuts for everybody. Associates, counsel, staff, non-equity partners, and even equity partners will be affected.
First year associates will be taking the increasingly standard 10% pay cut. But then things get crazy! According to the firm wide memo, most associates and counsel will be taking a wacky 8% pay cut. How adorably off-beat.

* Base compensation for all other associates will be reduced by 8%, although there will be a floor of $150,000 and $155,000 for second year and third year associates, respectively.
* Base compensation for all of counsel will be reduced by 8%.

As one tipster wryly put it:

I guess the salary freeze only meant frozen from going up, eh?

Senior staff will also see their salaries reduced by 8%.
After the jump, Venable partners share the pain.

double red triangle arrows Continue reading “Nationwide Salary Cut Watch: Venable Uses a Magic 8-Ball”

Nationwide Salary Cut Watch: Buchanan Ingersoll

By

Salary Cuts.jpgAnother day, and another firm is retreating from the salaries of the past. Our sources report that Buchanan Ingersoll & Rooney has decided to cut associate salaries between 5% and 10%.
The cuts will affect all class years.
Buchanan Ingersoll CEO Jack Barbour furnished Above the Law with this statement. Barbour suggests that the cuts are in part to due to Buchanan’s attempts to keep its billing rates competitive in this recession economy:

The firm generally has reduced associate compensation at a rate of between 5 and 10% per year. Certain associates may receive a higher or lesser reduction based on individual circumstances. This decision was not an easy one, but we feel that it is in the best interest of the firm and our clients to maintain the quality of service our clients have come to expect while keeping our rates at competitive levels.

The firm did not elaborate on what those individual circumstances might be.
Our sources believe the cuts will be based on hours, but you never know. Wouldn’t it be funny if the firm did it alphabetically. Nobody would be expecting that! It’s good to keep people on their toes.
It’s a little surprising that the firm cut salaries while summers are in the office, simply because the summers are only around for a short period of time. Buchanan scaled back this year’s summer program to seven weeks.
But if cutting salaries now saves jobs later, associates and summers might be all for it.
Earlier: Summer Cuts at Buchanan Ingersoll

DLA Piper to Move Away From Lockstep … Eventually

By

DLA Piper logo.jpgBack 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.

double red triangle arrows Continue reading “DLA Piper to Move Away From Lockstep … Eventually”

Nationwide Pay Cut Watch: Kaye Scholer Lowballs Low Billers

By

Salary Cuts.jpgKaye Scholer — which conducted stealth layoffs in November and open layoffs in February — is now cutting back on associate pay. The move will only affect associates that are on track to bill below 1600 hours this year, but affect them it will. The WSJ Law Blog reports:

Here’s the way it’ll work: All those first and second year associates who, as of June 1, were on pace to bill fewer than 1600 hours for the year will have 20% of what they stand to make over the last half of the year withheld. (In other words, the firm will hang on to 10% of the year’s salary.) For third year associates who fall beneath the threshold, the firm will withhold 15% of the July-December pay (or 7.5% of the full-year salary).
If, at the end of the year, the associates have hit 1600 hours, they’ll have their full pay restored.

Resting at #70 in the Vault rankings, Kaye Scholer seems to just be continuing the trend of firms in this range trying what they can to save money.
At least the attorneys will have the opportunity to make the money back if they can pick up their hours. It’s more like being sent to your room without dinner, instead of being left by the side of the road.
Kaye Scholer to Withhold Pay From Lower-Billing Associates [WSJ Law Blog]
Earlier: Nationwide Layoff Watch: Kaye Scholer
In This Market: Are You Getting Laid Off or Fired? A Kaye Scholer Case Study

Howrey First Years to $100K

By

Salary Cuts.jpgWelcome to the future. Like Drinker Biddle did in May, Howrey is changing the nature of the first and second year associate experience. The firm is moving to more of an apprenticeship model. New Howrey associates will receive an emphasis on training and take a significant reduction in salary.
The memo from Howrey explains some of the top-line goals of the new program — called the “Tier 1 Associate Program.”

Participants in Howrey’s Tier 1 Program will spend only one-third of their time during the first year on client billable work to permit them to devote the remainder of their time to pro bono representations and a wide range of training programs, including the firm’s signature professional development experience – the Howrey Academies. In Year One, associates will work with Howrey’s full-time, in-house writing instructor, be assigned to trial teams, and take advantage of other programs offered by Howrey’s award-winning professional development team. They will dedicate approximately one-third of their time to pro bono and public interest matters, which will afford them the opportunity to develop the advocacy skills and in court experience that are central to Howrey’s practice. The emphasis on training will continue into Year Two, with client secondments, judicial externships, and other advanced development opportunities added to the curriculum. Billable hours in the second year will be capped at roughly half of total hours.

That is the good, here is the salary information:

The Tier 1 program will be limited to a select number of associates each year. Compensation during the first two years will be adjusted to reflect the nature of the program and the dramatically reduced billable hours expectations. In addition to an annual salary of $100,000, first year participants will receive $25,000 upon acceptance of their job offer to help defray their law school loans or third year law school expenses. In their second year at the firm, participants will receive an annual salary of $125,000 and a $25,000 bonus upon successful completion of the program and entry into Tier 2 of Howrey’s associate development program. Higher compensation may be offered to candidates with special qualifications, such as advanced technical degrees or clerkships.

At least Howrey is trying. More details and the full memo and a reader poll after the jump.

double red triangle arrows Continue reading “Howrey First Years to $100K”

Nationwide Salary Cut Watch: Snell & Wilmer Cuts Salaries

By

Salary Cuts.jpgEarlier this week, we reported that salary cuts have spread to the Pacific Northwest. Now it appears that the salary cutting craze has migrated to the Southwest. Surely, our territories in Guam will be next.
The Phoenix based firm Snell & Wilmer has cut associate salaries by 10%. Above the Law received this statement from the firm:

We held meetings with our associates in each of our offices on Tuesday, June 16, announced the following, and answered associates’ questions:
* Associates’ salaries will be reduced 10% across the board, effective with associates’ July 15, 2009, paychecks; and
* Snell & Wilmer will be paying performance-based bonuses later this year.

It is worth noting that Snell & Wilmer did not freeze associate salaries at 2008, as many other firms have done. So while the cut takes a bite out of the 2009 pay raise, it’s not the double hit some associates are experiencing.
I hear land is still pretty cheap out in the Mojave. Water? That’s a different story.
Earlier: Nationwide Salary Cut Watch: Firms in the Pacific Northwest Also Feel Gloomy
Prior ATL coverage of salary cuts

Nationwide Pay Freeze Update: Slurpees Still on Ice (or Poured Out)

By

pay freeze salary freeze pay cut law firm.jpgAt the beginning of 2009, we were tracking salary freezes as law firms across the country froze their salaries at 2008 levels, rather than instituting lockstep raises based on seniority. Our most recent salary freeze round-up was in February. (We also acknowledged those that had raises as normal.)
Since then though, the salary freeze watch has been replaced by the salary cut watch. Rather than keeping salaries at 2008 levels, some firms are cutting back to 1998 levels.
Okay, not really. Salaries aren’t quite in line with the days of Ally McBeal, but some pay stubs are starting to resemble those of 2005.
So what about those firms that instituted “slurpee freezes” back in January? These firms said they were keeping salaries at 2008 levels, but that they planned to revisit the decision later in the year. It was assumed at the time that they would be revisiting in order to raise salaries, but that has not been the case.
If your firm hasn’t “revisited” the decision, that might be a good thing. None of those with slurpee freezes decided to raise salaries, though quite a few cut them. Specifics after the jump.

double red triangle arrows Continue reading “Nationwide Pay Freeze Update: Slurpees Still on Ice (or Poured Out)”

Nationwide Salary Cut Watch: Firms in the Pacific Northwest Also Feel Gloomy

By

Salary Cuts.jpgAbove the Law has received reports that Schwabe, Williamson & Wyatt will be cutting associate salaries and laying off staff. Never heard of Schwabe Williamson? Well then you need to Lewis & Clark your way out to the Pacific Northwest more often.
Schwabe Williamson is the second largest firm in Portland, OR. According to NALP, the firm has 170 attorneys across six offices (3 in Oregon, 2 in Washington, and an office in Washington, D.C.).
First year associates start at $110,000 at Schwabe. This fact already bothers junior attorneys there, and our tipsters report grounds for increased dissatisfaction among the rank and file:

SWW will be announcing pay cuts for its associate attorneys in the range of 5% – 10% on June 15th.

At least the associates should still have jobs. The news for the staff is much worse. We understand that a number of staffers are going to be let go, but we don’t have official numbers.
Staffers that we spoke with felt that there were other cuts the firm could have made before the firm started firing people.
More details and an official statement from the firm after the jump.

double red triangle arrows Continue reading “Nationwide Salary Cut Watch: Firms in the Pacific Northwest Also Feel Gloomy”

Pillsbury Salary Cut Follow-Up

By

Salary Cuts.jpgOn Tuesday, we reported that Pillsbury cut associate salaries based on the utilization rate of its associates. Am Law Daily reported this nugget:

The extent of the cuts isn’t clear; the 716-lawyer firm said reports on Above the Law that the cuts ranged between 10 and 20 percent aren’t “entirely accurate,” which isn’t exactly an outright denial.

Today, we have more news about the salary cuts going on at Pillsbury. It now appears that the cuts range between 5% and 20%.
So, that’s marginally better, if you are close to making your hours.
What are those hours cutoffs? We have more details after the jump.

double red triangle arrows Continue reading “Pillsbury Salary Cut Follow-Up”

Nationwide Salary Cut Watch: Fish & Richardson Scales Back Salaries

By

Salary Cuts.jpgIs it nationwide salary cut day and nobody told me? Earlier today, Bryan Cave cut associate salaries. Now, Fish & Richardson will be doing the same thing. We just don’t know when.
At a firm wide video conference today, Fish & Richardson president Peter Devlin said that the firm would be cutting salaries in the near future. As we understand it, the chairman didn’t give a specific date. But he did say that Fish & Richardson would be moving towards a “meritocracy” with regards to its salary structure.
Update (3:47): We’re still waiting for Fish & Richardson to get back to us directly, but firm president Peter Devlin now says that he did not suggest that Fish would be cutting salaries in the near future. Here is a statement he sent out to the firm:

Shortly after my address at today’s forum, a story appeared on the Above the Law website erroneously stating that I had announced that F&R would be “cutting salaries in the near future.” In fact, I said the opposite – that the Management Committee is not considering cutting our associate salary scale this year, despite the fact that several other firms have done so. I went on to say that we are reviewing our associate compensation system in view of the changing market, and that in my personal view any new system should link compensation with meritorious performance, put less emphasis on hours, and move away from lockstep advancement. You’ll be hearing more about this as our work progresses.

Did our tipsters misinterpret Devlin’s statement of moving towards a merit based system as a salary cut? Only time will tell. We’ll update you again if Fish & Richardson chooses to respond.
Boy, if lockstep was such a horrible system that didn’t reward merit, you have to wonder why nearly every firm used that system for so long. I bet there are a lot of people who wish they had been rewarded on merit during the boom times, instead of being punished for “performance” during the bad times.
The news should hardly come as a surprise to (remaining) Fish & Richardson associates. In January, the firm announced that it had laid off 49 lawyers. In May, the firm laid off 120 people. The salary cuts are just the latest cost cutting measure from the firm.
More details from the video conference, after the jump.

double red triangle arrows Continue reading “Nationwide Salary Cut Watch: Fish & Richardson Scales Back Salaries”

Nationwide Salary Cut Watch: Bryan Cave(s) to the Salary Cut Phenomenon

By

Bryan Cave logo.jpgAt least the salary cutting craze is staying localized in the lower echelons of the Vault 100. But that probably doesn’t mean very much to associates at Bryan Cave. Today, the firm announced that it was cutting salaries. The cuts were announced via firm wide email from firm chairman, Don Lents:

Annual compensation levels for existing associates will be reduced by 10% across the board (but where applicable to not less than the newly established entry-level compensation). Annual compensation levels for certain other lawyers (e.g., certain staff lawyers) will also be reduced. Information regarding your new annual salary will be available under the Comp Adjustments tab in the “My HR Information” section of eCave by 12:00 noon EDT today. The reductions will become effective in all of our U.S. offices other than those located in the State of Missouri on July 1, 2009. Due to legal notification requirements in Missouri, the reductions will become effective in our Missouri offices on July 13, 2009. In the U.K., a one month consultation period will commence immediately with a view to implementing the proposed 10% reduction to compensation with effect from July 13, 2009.

Bryan Cave is ranked #77 in your Vault Guide. But at #76, Chadbourne & Parke has already cut salaries. At #78, Thacher Proffitt & Wood no longer exists. So at some level Bryan Cave is keeping up with the competition.
The new base salaries for all offices after the jump.

double red triangle arrows Continue reading “Nationwide Salary Cut Watch: Bryan Cave(s) to the Salary Cut Phenomenon”