JD Journal » pay cuts

Chadbourne & Parke Does Right by its Associates

joshua — Tue, 26 Jan 2010 16:56:09 +0000

If you’re a Chadbourne & Parke associate, we urge you to resist the temptation to gloat a little when talking to friends at other firms today. If you’re friends with a Chadbourne associate, we recommend you change your lunch plans.

Starting from the small stuff and working our way up to the good stuff, Chadbourne & Parke is paying a bonus on what appears to be the Cravath scale. But wait, that’s not all! In November the firm indicated that they would be giving associates back the money they lost from April’s salary cutssometime in January. Well that sometime has come and on top of their bonus check all associates in good standing will be paid the difference between their salaries post cut and what they would have made under the old salary. Still not impressed? The pay cut has been rescinded. Salaries have been thawed out. Not good enough? Still want more? All associates are getting a double bump in level, being restored to the pay grade and dollar amount they would have been making had the recession never hit.

Congrats, C&P associates. Try not to rub it in your friends’ faces too much.

More Bonus News – And it’s a Little Different

joshua — Thu, 03 Dec 2009 01:38:04 +0000

Two more firms have announced their bonus schedules and they’re a bit different from the Cravath scale.

Sullivan & Cromwell is paying bonuses ranging from $7500 to $35,000 depending on class year. The only change is at the high end where senior associates will receive $5000 more than at firms on the Cravath scale.

Patton Boggs is doing things differently. They are paying bonuses based on both class year and the number of billable hours by which an associate exceeded their target goal. The scale ranges from $5000 to $45000. You’ll note that it’s lower on the low end and higher on the high end, but more importantly it cuts out completely anyone that missed their target goal for billable hours. Given the state of the legal economy I have to wonder how many associates won’t be getting a bonus at all, and of those that do, how few are hitting that top mark.

Patton Boggs also told its associates that those that missed their billable hour target by a large enough amount would receive a salary cut. Missed by 300 hours? That’s a 10% pay cut. Missed by 500 hours? That’s a 20% pay cut. And since salaries are remaining frozen, that means a third year associate that missed by 500 hours will receive $122,000 next year while new first years get $160,000.

Haynes & Boone Cut First Year Salaries

joshua — Mon, 23 Nov 2009 19:40:58 +0000

First year associates at Haynes & Boone will be starting after Thanksgiving, but at a reduced rate. The firm emailed its incoming associates and informed them that the salary for first years has been cut to $145k. The firm says that it has not decided on a pay structure for 2010 yet so this may be a temporary cut, but that seems unlikely in today’s market. The rush to $160k was fueled by competition for the best students coming out of law school and was coupled with other perks and benefits, lavish events and other promotions designed to win the hearts and minds of the next generation of lawyers. With law school enrollment on the rise and the number of biglaw jobs on the decline, the tables have turned a bit and firms don’t need to persuade recent graduates to come work for them. A job offer is enough.

Clients are also pushing for lower hourly rates, particularly from first year lawyers who are essentially getting on the job training at the clients expense. In today’s economy, firms are increasingly catering to the wishes of their clients in order to get the business and so more and more firms are offering cut rates for first year hours, or moving to alternative fee structures. None of this adds up to returning salaries to 160k next year for Haynes & Boone first year associates.

That doesn’t mean it won’t happen, and if it does happen I will happily eat my words.

Reed Smith Asks Non Equity Partners for a Tithing

joshua — Mon, 16 Nov 2009 18:37:38 +0000

Render unto Caesar what is Caesar’s, or so the expression goes. Now Reed Smith is asking much the same of its non equity partners. Non equity partners are being asked to contribute as much as 15% of their base salary to the company or risk losing partnership status. Gregory Jordan, the firm’s chairman, had this to say about the plan. ““It’s about not just saying you’re a partner, but actually being one. It means something. It revolves around risk-sharing in the business.” Jordan defended the move, saying that it isn’t a means to get a quick cash infusion into the company, and going on to say that Reed Smith is having “a very strong year”.

A very strong year? That doesn’t square up with the history.

In March, Reed Smith laid off 100, 26 lawyers and 74 staff.

In May, Reed Smith cut all US associate salaries by 10%.

In August, Reed Smith cancelled on campus interviews at Fordham law at the last minute, prompting the school to ban Reed Smith from on campus recruitment for five years.

Last week, Reed Smith cut the salaries of incoming associates by 20% and lowered their billing rates for work done by new associates. This came two weeks after announcing a plan to move away from lock step.

If this is a very strong year, I would hate to see what things look like in a bad year.

William Fry Lays Off 17, Cuts Pay

Erik Even — Sun, 05 Apr 2009 17:19:22 +0000

Dublin law firm William Fry has made 17 staff redundant, and implemented pay cuts of up to 10%.

The firm, one of Ireland’s “big five” legal practices, informed its 400 staff of the decisions this weekend.

The pay cuts will apply to all employees on a sliding scale.

William Fry has 63 partners, and offices in Dublin and New York. It also has a formal association with Belfast law firm Tughans.