Nationwide Salary Cut Watch: DLA Piper Joins the Party

We have a new leader in the clubhouse in terms of Vault Top 50 firms cutting associate salaries. DLA Piper is going down the salary cut road. The internal memo just went out:

We are making an adjustment of our base associate compensation in our major markets to $145,000. In those markets where the starting compensation has been $145,000, we are adjusting it to $130,000. Adjustments to all associate salaries at other class levels will be determined and communicated on a case-by-case basis based on class year and performance levels. We will continue to reward associates for exceptional performance in 2009 through our bonus program, taking into consideration both the associate’s performance and that of the firm. We also will not increase paralegal and staff compensation for this year. The timing and implementation of all of these actions will take effect June 8th and be reflected in the June 19 paycheck.

Until today, Baker & McKenzie was the most prestigious firm (according to Vault) that slashed salaries.
But DLA Piper wants people to know that its partners have already taken a hit to their earnings:

Our partners, including the three of us, have already accepted significant reductions in our projected 2009 compensation, and compensation levels for Of Counsel and Senior Counsel have also been reduced. We are now taking the further steps of bringing US associate salaries and staff salary increases into alignment with market realities.

We reported DLA’s decision to decrease partner compensation, back in March. Does sharing the pain make associates at DLA feel better about their reduced paycheck than associates at other firms?
One tipster isn’t too broken up about it:

On the bright side, at least we’re not fired. All the older associates are holding their breath awaiting the “case by case” reviews.

Read the full memo after the jump.

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DLA PIPER — MEMO — SALARY CUTS
As the national and global economies continue to contract, and credit markets remain frozen, both governments and the private sector are working through the implications for the future. The broad consensus is that the business environment in the next few years will be fundamentally different, and our clients have taken dramatic action to reshape their businesses to fit this new reality. The legal profession has also been significantly affected, and is in the process of making the adjustments necessary to realign our business models for continued strength and success.
Our partners, including the three of us, have already accepted significant reductions in our projected 2009 compensation, and compensation levels for Of Counsel and Senior Counsel have also been reduced. We are now taking the further steps of bringing US associate salaries and staff salary increases into alignment with market realities.
We are making an adjustment of our base associate compensation in our major markets to $145,000. In those markets where the starting compensation has been $145,000, we are adjusting it to $130,000. Adjustments to all associate salaries at other class levels will be determined and communicated on a case-by-case basis based on class year and performance levels. We will continue to reward associates for exceptional performance in 2009 through our bonus program, taking into consideration both the associate’s performance and that of the firm. We also will not increase paralegal and staff compensation for this year. The timing and implementation of all of these actions will take effect June 8th and be reflected in the June 19 paycheck.
We intend to accelerate our consideration of potential alternative structures for associate advancement and compensation beyond basing them primarily on time out of law school. We want to reward our top performers for not only developing the high level of legal expertise clients demand, but also for meeting client expectations of extraordinary service and net overall contribution of value to the client’s business goals and the firm’s development. We have started down this path in helping lawyers develop these skills through the Career Advancement Center, and the Associate Benchmarking Program. The logical next step is to align our internal advancement and compensation systems more closely with those market expectations, and so we have asked Fred McClure, a member of our Executive Committee and Co-Chair of the Diversity Committee, to head a subcommittee of the Executive Committee and to work in conjunction with David Nachman, as Co-Chair of the Career Advancement Center, to examine and develop advancement and compensation alternatives. We will seek input from both associates and partners, and Fred and David will make their recommendations later this year when they will be considered by the firm’s management and ultimately the partners.
These measures will provide us with flexibility and additional competitive strength to win important engagements and continue to grow our business. No one can predict the next developments in the economy, but we believe that these actions will help protect the firm and our people.
Earlier: DLA Piper Pays Partners Less
Salary Cut Watch: Baker McKenzie Brings Salary Cuts into the Vault Top 50

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