JD Journal » freeze salaries

Reed Smith Cuts Associate Salaries by 10%

Erik Even — Wed, 20 May 2009 17:53:55 +0000

Reed Smith is decimating associate salaries, cutting pay 10% across the organization.

From the memo:

…Reed Smith has adopted many changes to our business in response to global economic conditions… 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. 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.

In Europe and the Middle East, the firm is freezing current associate salaries; and it will set the starting salary for newly qualified UK associates approximately 10% lower than the current level. Asian operations are not affected.

Founded in 1877, Reed Smith LLP employs 1500 attorneys in 23 cities worldwide. The firm counsels 28 of the top 30 US banks, and 10 of the world’s 12 largest pharmaceutical companies. In addition to the United States, Reed Smith has offices in the United Kingdom, continental Europe, Asia and the Middle East.

DWF Freezes Pay, Cancels Bonuses

Erik Even — Tue, 19 May 2009 16:53:15 +0000

Despite seeing its best financial results ever, UK law firm DWF has frozen pay and canceled bonuses.

The firm was skewered online in December, when it announced it would spend £5 a head ($7.74) on its Christmas party.

If you have any details about the state of things at DWF, please send us a confidential tip!

DWF LLP is a leading, full service law firm, based in Leeds, Liverpool, London, Manchester and Preston. It employs over 950 people, including 127 partners.

McDermott Lawyers Get Bonuses; But Salaries Frozen

Erik Even — Tue, 17 Mar 2009 19:08:59 +0000

McDermott Will & Emery associates have been paid their 2008 bonuses, with fourth years getting up to $60,000.

However, the firm has announced that associate salaries will be frozen for 2009.

In February McDermott laid off 60 associates and 89 staffers.

McDermott Will & Emery LLP, founded in 1934, is a prestigious international law firm headquartered in Chicago, Illinois. It is one of the top 10 largest law firms in the United States and one of the 20 largest in the world.

Allen & Overy to Cut 30% of Trainees

Erik Even — Mon, 09 Mar 2009 16:38:55 +0000

London’s Allen & Overy will only retain 70% of its trainees for September 2009 and March 2010.

The Magic Circle firm has not made a final decision about the retention rate, and said the figure was a “working assumption in light of the current financial climate.”

Allen & Overy retained 86% of its trainees in 2008, 90% in 2007.

The firm offers its training contracts two years in advance, with some 50 trainees joining each year.

Allen & Overy is expected to cut 9% of associates, 9% of support staff and 9% of its partnership.

Around half of the affected positions are in London. The firm is also freezing pay and billing rates at 2008 levels.

Founded in 1930, Allen & Overy has approximately 5,500 staff and 31 offices worldwide.

Burges Salmon to Cut 18 Lawyers

Erik Even — Mon, 09 Mar 2009 16:28:43 +0000

Burges Salmon has announced a redundancy consultation that could see 18 lawyers lose their jobs.

The firm has also launched a review of its business support function, and has frozen salaries for support staff at 2008 levels.

Lawyer salaries are currently under a review with a decision expected to be made by September.

The Bristol, UK firm said that current trainees will not be affected, but 2009 and 2010 trainees have been asked to volunteer to defer their start date for 12 months, with the firm offering a cash incentive of £5,000, or $7,050.

Burges Salmon LLP is the 43rd largest law firm, by revenue, in the UK. It has offices in Bristol and London.

Revenue, Profits Down at Stroock & Stroock

Erik Even — Wed, 25 Feb 2009 23:52:10 +0000

The Am Law 100′s Stroock & Stroock & Lavan, a firm with about 75% of its 750 lawyers in New York, saw profits per partner drop by 8.6%, to $1,185,000 last year.

Stroock’s gross revenue dropped 6.7% to $270 million, a larger drop than most firms.

Stroock has added several recent laterals, including a four-lawyer intellectual property group from Jenner & Block.

The firm has carefully managed expenses, canceling its holiday party, limiting travel when possible, and trimming head count from 369 to 350. The firm is not ruling out layoffs or salary freezes for 2009.

Stroock & Stroock & Lavan LLP is based in New York City, with approximately 350 lawyers in three offices, the other two being Miami and Los Angeles. It was founded in 1876.

Update: Allen & Overy to Cut 450 Jobs

Erik Even — Mon, 23 Feb 2009 18:56:45 +0000

Last week we reported that Allen & Overy, the UK’s fourth-biggest law firm by revenue, would cut as many as 150 lawyers, sever ties with its private client team, and freeze pay.

Now Legal Brief Today reports that Allen & Overy will cut 450 jobs at a cost of £44 million ($64 million).

The ‘magic circle’ firm told staff it would reduce the headcount by 9% by the end of its financial year on 30 April. That means 47 partners and almost 200 rank-and-file fee-earners will lose their jobs, roughly half of them in London, with a similar number of support staff going, says a report in The Times. It adds that a further 35 partners will be forced to accept a reduced share of equity. Remaining partners will be asked to inject an average of £30 000 to raise the firm’s working capital by £11m.

Via LBT.

Morrison & Foerster Slashes Bonuses, Freezes Salaries

Erik Even — Fri, 20 Feb 2009 16:45:09 +0000

Morrison & Foerster has frozen associate salaries, and revised its associate discretionary bonuses to as low as $6,000 for 2008.

All 2008 bonuses will be paid on February 27th, but “evaluation-based bonuses” are being revised. Hours-based bonuses for everyone, and discretionary bonuses for New York-based associates, will stay the same.

The discretionary bonus structure announced in May ranged between $25,000 and $80,000. The revised structure for 2008 ranges between $6,000 and $62,000.

The firm is also freezing associate salaries for 2009. But associates living in New York could receive what would have been their 2009 raise as a bonus sometime in 2010.

Morrison & Foerster LLP has more than 1,000 lawyers in 19 offices. The firm was founded in San Francisco in 1883.

Allen & Overy Cuts 150 Lawyers, Freezes Pay

Erik Even — Thu, 19 Feb 2009 17:27:39 +0000

Allen & Overy, the UK’s fourth-biggest law firm by revenue, will cut as many as 150 lawyers, sever ties with its private client team, and freeze pay.

The cuts include 47 partners, or 9% of its total. Another 37 partners will be “subject to equity adjustments” in response to market conditions.

The firm’s private client team will spin off to form a new firm starting in May, to be known as Maurice Turnor Gardner LLP.

A salary freeze for all staff will also be imposed.

Around 100 associates will be let go. Half of the cuts in both partner and associate numbers will come in London.

Founded in 1930, Allen & Overy has approximately 5,500 staff and 31 offices worldwide. It is part of the Magic Circle of London-based law firms.

K&L Gates Freezes Salaries

Erik Even — Sat, 14 Feb 2009 17:30:46 +0000

Above the Law reports that K&L Gates held a meeting Friday to discuss, amongst other things, salary freezes.

Earlier today, associates at K&L Gates attended a town hall meeting with Peter Kalis, chairman and global managing partner. Kalis provided an overview of where the firm stands and announced steps that will be taken to deal with the recession…

Kalis said management would consider the possibility of layoffs at the end of this month.

Salaries are now frozen for all associates, with a review to take place in July.

Incoming first-year associates will have their start date deferred to January 4, 2010.

The firm will be raising billing rates.

Brooklyn Law School Freezes Salaries

Erik Even — Wed, 11 Feb 2009 18:18:57 +0000

New York City’s Brooklyn Law School has announced it will freeze faculty salaries, in order to keep 2009 tuition increases low.

Dean Joan G. Wexler discussed the issue in a letter to students:

… I am writing to let you know that when the School sets tuition for the next academic year, we will be mindful of the current difficult economic times and the financial pressures that you face.

Over the past five years, annual tuition increases have been approximately 6.2% for entering students and 5% for upperclass students. I anticipate that any increase for the 2009-10 academic year will be substantially lower…

… All departmental budgets will be carefully reviewed, but we will be able to keep our tuition increase to a minimum by foregoing salary increases for deans and almost all administrators, faculty, and staff in the coming year. The savings will be passed on to you.

… We are imposing this limit on our tuition increase not because we have to, but because we are able to, and because we know it will help you deal with these challenging economic times.

Brooklyn Law School’s faculty includes 68 full-time professors and five emeriti faculty. It also draws on a large body of practitioners, public officials and judges as adjunct faculty to teach specialized courses.

DLA Piper Freezes Associate Salaries

Erik Even — Mon, 05 Jan 2009 00:10:53 +0000

DLA Piper associates were greeted with this email on Friday:

2008 has indisputably been one of the most challenging economic periods in recent history. DLA Piper, because of its global platform and practice diversification, is well-positioned competitively and financially to weather this downturn, but neither we nor our clients are immune from its impacts. This difficult business environment is certain to continue in 2009, and as a matter of prudent management, the firm will not increase associate salaries for 2009 in the U.S. Associates moving to the next class year will continue to receive the same base compensation as they received in 2008. Consistent with our past practice, decisions for regions outside the US will be made on a market by market basis.

We have exceptional associates and we value you greatly. We will continue to reward outstanding performance through our bonus program. Bonuses for 2008 will be determined and paid in late January or early February. The 2009 Bonus Program will be the subject of our usual Executive Committee review and discussion process, and its specifics will be announced at some point in the first quarter.

We are grateful for the market opportunities DLA Piper has, and for the loyalty of our clients. Our primary purpose in 2009 should be remaining close to them and understanding their business and legal needs in order to provide them with exceptional service.

According to Above the Law, this isn’t helping with DLA Piper’s reputation for being notoriously cheap:

Well, it’s only been an hour, but I think it’s a terrible move. DLAP already has a reputation as a scrimper among the top-50 – this will not help.

Orrick Freezes 2009 Associates and Consultant Pay

Erik Even — Mon, 29 Dec 2008 23:30:56 +0000

Frisco’s Orrick, Herrington & Sutcliffe LLC will freeze associate and consultant salaries in 2009. Associates were notified by the following e-mail, sent to Legal Times by Orrick’s Adi Weisman:

…associates in the U.S. and Europe, and associates, senior consultants and consultants in Asia, will receive the same salary in 2009 as you received in 2008… of counsel salaries will be determined on an individual basis and generally will remain the same as 2008. We will ensure that our 2009 bonus program gives us additional flexibility to reward outstanding performance and remain competitive in the marketplace.

The firm blames the economic meltdown for the decision. As for bonuses:

We will pay full 2008 bonuses according to the terms of the program we announced earlier this year. These bonuses will be paid by the February 15 payroll in the U.S. and on or around that date in Europe and Asia, consistent with regional practices.

Orrick reported gross revenue of $772 million in this year’s Am Law 100, and profits per partner of $1.66 million.

The firm has over 1,100 lawyers worldwide in 21 offices, with more than 200 attorneys in each of its two largest offices in San Francisco and New York. The firm’s day-to-day administrative operations are centralized at a Global Operations Center in Wheeling, West Virginia.

Latham & Watkins announced pay freezes two weeks ago.

Via The BLT.

Latham & Watkins Freezes Salaries at 2008 Levels [Update]

Erik Even — Wed, 17 Dec 2008 22:51:39 +0000

Los Angeles-based Latham & Watkins is freezing 2009 salaries at 2008 levels.

While we anticipate that the diversity of our practices and global reach will serve us well in the year to come, it seems clear that the global economy will continue to be challenged at least through 2009. As a result, we are modifying associate compensation as part of a prudent business strategy. Effective January 1, 2009, associates moving to the next class year will continue to receive the same base compensation as they received in 2008. …

We expect as a general matter to continue to reward outstanding performances through our merit-based bonus pool. As in previous years, we will announce bonuses in late January.

Above the Law notes that, unlike other firms, Latham does not promise to reexamine the salary situation in Q1. Latham associates can probably expect a pretty lousy 2009.

Happy New Year, Latham & Watkins!

UPDATE:

Law.com suggests that the Latham salary freeze may start a trend:

“Everybody’s been waiting for some kind of signal from the market leader,” said consultant Peter Zeughauser, founder of The Zeughauser Group. “This will be a profound signal to the market about what to do.”