UPDATED: Associates at Orrick Herrington & Sutcliffe will not be receiving raises in 2009, according to a memo sent Monday morning from chairman Ralph Baxter.
“Our decision is part of an overall effort we are making as a firm to adapt to the radically changed business environment in which we will operate in 2009,” Baxter wrote. “As we all know, the world economy is experiencing unprecedented volatility and uncertainty and it seems clear that these challenges will continue into the New Year. In these times, we must rethink our traditional way of doing things and adjust our approach to reflect the reality facing our industry and our clients. This includes reassessing our compensation policies at all levels of our firm.”
The move comes less than two weeks after Latham & Watkins said it would freeze associates salaries at 2008 levels. Consultants said at the time that it could start a trend because Latham is considered a market leader.
“I don’t know of any firm that is not taking this economic downturn very, very seriously,” said consultant Rich Gary of Gary Advisors. "This is the time of year that firms budget and plan for the new year and a lot of budgeting decisions get made."
After the jump, more from Gary, plus the full memo:
“I think what we are seeing right now is a full court press by virtually every law firm in the country as they budget for 2009 to go through their profit and loss projections and find ways where possible to control expenses going forward because everyone is nervous about workloads next year, and they are concerned about their ability to raise rates in 2009,” Gary said.
Baxter's memo:
Our decision is part of an overall effort we are making as a firm to adapt to the radically changed business environment in which we will operate in 2009. As we all know, the world economy is experiencing unprecedented volatility and uncertainty and it seems clear that these challenges will continue into the new year. In these times, we must rethink our traditional way of doing things and adjust our approach to reflect the reality facing our industry and our clients. This includes reassessing our compensation policies at all levels of our firm.
We will pay full 2008 bonuses according to the terms of the program we announced earlier in 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.
As always, I thank you for your many contributions to the firm and to our clients, particularly as we manage through this challenging time.
I plan to visit most of our offices in the first quarter of 2009. During those visits, I look forward to hearing your feedback and suggestions and giving you more information about our various plans to adapt to and thrive in the changing world.
Regards,
Ralph
— Amanda Royal
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