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 several major law firms.

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 careercenter@abovethelaw.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 tips@abovethelaw.com.

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 of first year 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.

After being inundated with firms that are trying to cut salaries through the implementation of a merit-based associate compensation structure, it’s refreshing to see a firm cut salaries the old fashioned way. Tipsters report that Kaye Scholer is just going about its paycut in a straightforward manner:

Associates will be paid on a 145K scale for 11 months, and then, provided they are above some level of hours, will have a “keep what you earn” December.

This comes months after Kaye Scholer told half the class they would be making 60K and doing pro bono work for the first year.

Kaye Scholer’s got them by the balls and knows it.

Clean, crisp, this is how your father taught you to cut costs.

Remember, Kaye Scholer cut salaries and then offered a similar clawback provision last year. But our tipsters report that the hours requirements are far from onerous. If you hit 1600 hours by the end of the year, you’ll get your $160K.

The system has the feel of a DLA Piper-esque 10% salary holdback. But, unlike DLA, making the money back is tied to objective factors (hours) instead of subjective ones. And Kaye Scholer won’t be grading on a curve.

And, for 2009, Kaye Scholer will be making a bonus payment that is above the market for associates that hit their hours. More details after the jump.

As we have discussed at length, it’s one thing to move to a merit-based compensation structure. Many associates will accept it. What really seems to bother people is when the firm kills lockstep and replaces it with a system that includes a significant salary cut. E.g., DLA Piper.

Now, McDermott Will & Emery is poised to do the same thing. Multiple tipsters report:

This month, MWE announced it was moving from lockstep to a merit-based “level” system, which it calls the “Career Progression and Professional Development System.” Level 1 will pay $145,000, level 2 will pay $175,000, and Level 3 will pay $200,000.

So we have another firm that is adopting an Orrick-style, three tier system. But while Orrick held the line at a starting salary of $160K for starting associates, MWE is readjusting salaries downward.

The new compensation system isn’t ready to go right out of the gate in 2010. Instead, 2010 will be a “transitional” year, which will bring — you guessed it — salary cuts!

2010 is a transitional salary year; the 2009 class is starting at $145,000 and ‘08 is being dropped down to $145,000. For everyone else, starting April 1, the salaries are $175K (2007), $185K (2006), $200K (2005), and $220K (2004).

Remember, people in the class of 2007 are making $185K at firms that didn’t freeze or cut salaries. So to be clear, McDermott will be paying people less than the market rate even when the firm gets around to raising salaries in April.

Is there anything about this merit-based system that does not involve cutting salaries? Details from the McDermott salary FAQ after the jump.

First year associates at Pillsbury Winthrop Shaw Pittman got a poke last night that didn’t make them “hee-hee.” The announcement was not made on the Acela. It came via a firm-wide email from executive partners Jeffrey Grill and Sheryl Stein.

All first years, except those in New York, are having their salaries cut. From the memo:

Based on our current assessment of the market for associate salaries and with our incoming first year associates joining the Firm shortly, the Firm has decided that, effective January 1, 2010, first year associates resident in our U.S. offices (other than New York) will be paid at an annual base salary rate of $145,000. First year associates resident in our New York office will be paid at an annual base salary rate of $160,000.

This isn’t the first salary cut at Pillsbury. Back in June 2009, the firm cut salaries based on utilization rates.

There is a caveat to this latest announcement. The firm recognizes that the market outside of New York is still “in flux” and it might raise salaries accordingly (and retroactively) if it sees fit in the future. Alternately, if first year associates outside of New York bake up 1950 hours, they’ll pull a $15k bonus out of the oven at the end of the year. See the full memo, after the jump.

What about the 2010 pay scale for the rest of Pillsbury’s associates?

On Monday, Dechert made its 2009 bonus announcement. It’s a match of the Cravath scale. The Legal Intelligencer reports:

Dechert’s bonuses for 2009, though lower than those paid out for 2008, are in line with what market-setting Cravath Swaine & Moore announced in November.

In a memo obtained by The Legal Intelligencer, Chairman Barton J. Winokur told associates the class of 2008 would receive $7,500, the class of 2007 would get $10,000, the class of 2006 would receive $15,000, the class of 2005 would be paid $20,000, the class of 2004 would get $25,000 and the class of 2003 and more senior associates would receive $30,000.

And just for good measure, Dechert will pay for a super bonus to a few lucky associates:

According to the memo, associates with “exceptional performance” will receive bonuses up to $25,000 above the outlined grid “and in a couple of truly extraordinary circumstances even more.”

These may not be Wachtell Lipton bonuses, but I’m sure whoever receives Dechert’s largesse will not complain.

The firm also announced that it would make raises — for the most part.

However, a couple of Dechert offices will be taking a huge salary cut.

We all know that Venable is a “wacky” place to work. But is the firm also cheap? Last week, the firm announced its 2010 salary structure. It’s almost like Venable looked at all the different ways firms are handling salaries and decided to try all of them, at the same time. The firm-wide memo from managing partner Karl Racine truly has it all:

As you know, 2009 has been a difficult year for the practice of law. The impact of the recession on our clients has been severe. As a result of this unprecedented downturn in business activity, law firms were forced to take significant action to fundamentally realign their business models with the reality of a market place characterized by a significant decline in the demand for legal services. In a real way, the law firm business model has experienced a demonstrable market correction. While Venable has not been immune from these economic forces, the firm has exhibited remarkable and enviable resilience.

As we prepare to close the books for 2009, the firm will likely end the year less than one percent below 2008 revenues. There is no doubt that the firm’s solid performance is attributable to the superior work and effort of all of its staff, lawyers, legislative advisors, legal professionals, and management team. Perhaps like no other year in the firm’s history, Venable charted its own course in the face of disparate actions taken by our competitors.

I suppose, technically speaking, doing a random mash-up of all the things your competitors have done constitutes “chart[ing] [your] own course.”

Let’s break it down after the jump.

Yesterday, we reported that K&L Gates cut salaries for its incoming associates. The salary cut is just for a few of the firm’s many offices, but it looks like I got the offices wrong. The firm still hasn’t responded to my request for clarification, but tipsters who work at K&L Gates have helped set the record straight.

Yesterday’s report was based on phone calls the firm made to incoming associates over the weekend. But K&L Gates also held meetings on Friday with associates in the firm’s various offices. The salary cuts on incoming associates will only affect four of the firm’s offices: Charlotte, Dallas, Raleigh, and Seattle. But the cuts will affect each office differently. A tipster reports:

They cut salaries for incoming first years in only 4 of the 33 offices, and the salary cuts depended upon which city they’re in. For instance, Dallas incoming salaries were dropped from 160k to 150k.

Okay, but that’s just the bad news and it only affects people about to start with the firm. For associates already at the firm, there was a lot of good news from the Friday meetings.

Details after the jump.

We have some good news and some bad news for incoming K&L Gates associates.

I’m feeling charitable, so I’ll lead with the good news. Our sources report that everybody is officially set to start on January 4th. The firm called people over the weekend to mention some final, minor details, but people will have a job on the first business day of the New Year.

Yay! Doesn’t everybody feel good?

Okay, now the bad news. One of those minor details was a big old salary cut for incoming first-year salaries. The cut will really put K&L Gates first years on the low end of the Biglaw salary pool.

UPDATE: The salary cut does not apply to all incoming first-year associates. Details after the jump.

The artifice of the slurpee salary freeze and the “temporary” salary cut can be put to rest. As long as you are not doing keggers with the firm Kool-Aid, you already know that Biglaw will keep associate salaries depressed for as long as they can. It’s not hard to see where this is going, as Am Law Daily reports:

“If you do the math,” says Steven Davis, chairman of Dewey & LeBoeuf, “associate compensation is coming down across the board.” …

“I lean much more in the direction that this is not a blip,” says Dewey’s Davis. “In the medium term, we’re seeing, and will continue to see, a paradigm shift” in associate compensation. (Dewey, interestingly, hasn’t announced cuts in compensation or in bonuses, though it has sent dozens of 2009 first-years on leave with a stipend.)

That last parenthetical isn’t entirely forthright. Dewey hasn’t announced bonuses yet. If the firm follows Cravath or S&C, that will represent a “cut” in bonuses from last year (to say nothing of two years ago). If Dewey doesn’t follow the market and instead pays what it did last year, I’ll strip naked and run through the streets screaming “I am TTT! I am so TTT!”

But the general point — the one about basic “math” — is exceedingly obvious.

The only open question is whether firms will keep the deflationary salaries on lockstep, or if they’ll move towards a system that rewards people based on still undefined “performance metrics” instead of experience and billable hours.

Yesterday we reported that Patton Boggs was having an all associates meeting and wanted its people to be there in person.

With everybody gathered around, Patton Boggs unleashed a torrent of news. First things first. Here’s the bonus announcement, from a statement the firm released to Above the Law about the meeting:

As usual, we are rewarding associates who exceed their billable hour goal with our annual bonus program. Bonuses will range from $5,000-$45,000 depending on class year and the number of hours by which an individual target was exceeded.

In addition, the firm plans to offer merit bonuses in January as part of the associate evaluation process.

Well, the New York market starts at $7,500, so the low end of the Patton Boggs scale is below the bottom of the NYC scale. But at the top end, Patton Boggs is paying more than the Cravath scale.

It is worth noting, of course, that Cravath and other top New York firms pay bonuses to everybody, not just those who “exceed their billable hour goal.” In this market, is anybody actually billing anything like 2400 hours? It could be that Patton Boggs’s big top number is a payout only a couple of people will actually receive.

And the bonus news was the good news to come out of the meeting. The other news is after the jump.

Haynes and Boone deferred its incoming first-year associates to November 30. First-years at the firm will be happy to know that the firm is keeping its promise and they will be starting just after Thanksgiving.

But they won’t be starting at full salary. Incoming associates got the news on Friday. An angry tipster let us know the news:

I’m an incoming first -ear at Haynes and Boone in Texas. We start on the 30th and just got an email saying our salaries will be $145k. This is the first time any of us even knew the firm was considering cutting salaries, and they did it with a bull**** email. So much for being committed to competing with other Texas firms.

But there is a chance that incoming first-years will be paid on a $145K scale for only a month. Above the Law reached out to spokespeople for Haynes and Boone, and they told us that the salary scale for 2010 has not yet been set.

So salaries could be going back up, if that’s where the Texas market settles.

There are actually a couple of interesting things Haynes is doing with its incoming class for their first month on the job.

Seyfarth Shaw is set to become the latest firm to flip its incoming associates the Bird. A very angry tipster reports:

[Seyfarth] just deferred all incoming associates to October 2010 with only $2000/month as a stipend beginning on our former start date of January 19, 2010! It’s a joke … we know for a fact that they were busy and could have afforded us. It is a firm managed by horrible, greedy, selfish individuals … This is amusing, in light of the fact that the firm turned a profit last year …

We would like to warn anyone considering accepting an offer from the firm to STAY AWAY!!!!!!!!!!!!!! It is particularly disconcerting for those of us who turned down offers from Biglaw in favor of a firm that apparently “cared soooo much” about us. Go Vault or go home.

Whoa, tell us what you really think. You have to wonder if these deferred incoming associates will come up with any fun banners about their would-be employer.

As angry as the deferred incoming associates appear to be, it is not at all clear that Seyfarth could have afforded to bring on a new class of people at this time. In addition to telling the incoming associates to wait for almost another year, today the firm announced that it was cutting first year associate salaries.

Details and a statement from Seyfarth, after the jump.

Baker 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.

The 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.

Have you noticed that whenever there is a story about the long-term future of associate salaries, there is always a quote from somebody at Altman Weil, the law firm consultancy? And have you noticed that their quotes are often advocating deep cuts in associate pay?

The latest example of this curious phenomenon appears in the Fulton County Daily Report:

Altman Weil’s Oct. 27 program, called “Leverage, Lockstep and the Changing Associate Model,” was for law firm clients.

Altman’s James D. Cotterman, who advises firms on compensation, said associate pay did not drop enough in the recent round of cuts at the nation’s big law firms, which included Atlanta’s largest firms.

Cutting pay from $160,000 to $145,000 was only “about half of what was needed,” said Cotterman. The starting salary at big firms in New York, Washington and Los Angeles was $160,000 before the pay reductions that started last spring.

Cotterman said a $15,000 cut does not make a significant difference in “changing the value equation to clients.”

“They probably should have set pay back a decade, to 1998. That’s what I was expecting,” he said. “This story may not be over yet.”

I don’t see James D. Cotterman advocating that profits per partner go back to 1998 levels. I wonder why?

In July, Morgan Lewis & Bockius announced that it would be ending lockstep compensation for its associates in 2010. At the time, the firm furnished this statement to Above the Law:

“We’re running our own business and focusing relentlessly on client relationships,” said Francis M. Milone, Chair of the Firm. “Doing so responsibly means continuing to reduce expenses, committing to the people in whom we are already invested, and looking at compensation across the board to ensure our structure matches the reality the entire legal industry must face.”

The July announcement was the culmination of the effort made by MLB and its chairman, Francis Malone, to reform the Biglaw business model. Back in April, Milone gave an interesting interview to the Philadelphia Inquirer:

Question: Law firms are still very profitable. Why do they need to downsize?

Answer: You have to make a judgment about whether you can keep people busy going forward. It is not healthy for a lawyer to not be busy, to have free time on his or her hands. You don’t grow, you don’t develop, you’re not happy.

And from a cultural perspective, you don’t want to build a firm that culturally is populated by a lot of people, or too many people, who don’t have enough to do.

Q: Is that the only reason?

A: The other piece of it is the feedback we got from clients. Because they’re looking at the way they want law firms to act. They’re not going to be as willing to pay, frankly, to train new lawyers. So it’s going to be harder to find things for new lawyers to do. And when we’re paying new lawyers $160,000 and clients don’t want to pay for them, you’re putting them in a position where there may not be a lot of things for them to do.

Well, 2010 is almost upon us. But MLB is suddenly not so excited about ending lockstep compensation. Milone conducted a firm-wide video conference yesterday, and tipsters report his enthusiasm for ending lockstep compensation was noticeably lacking.

Details and a statement from the firm, after the jump.

Don’t you love it when a firm cares so much about associate development that it’s willing to cut associate salaries? That’s what Foley Hoag is doing; the firm announced today that it was slashing salaries, in part to help associate development and recruitment. Here’s a screen shot of the firm wide memo (click to enlarge):

How does cutting salaries help the firm recruit new associates and maintain current associates?

In any event, check out the rest of the memo and tipster reports on how deep the cuts actually are after the jump.

The Great Recession has been tough for many different types of firms — and that even includes intellectual property firms. During the past year, IP-focused shops have cut back on hiring, slashed salaries, and lost key partners to larger firms.

A few recent developments at Finnegan Henderson, the D.C.-based IP powerhouse, reflect the new realities. Multiple sources report the following:

1. Earlier this week, at an “all associates” meeting, the firm announced that it is freezing associate salaries.

2. At the same meeting, the firm announced that it is reducing first-year associate salaries from $160,000 to $145,000 (in all offices).

UPDATE: We understand that Finnegan has frozen support staff salaries as well.

Two additional items about Finnegan, after the jump.