Legal Pad

Associate Salary Slashing: Perkins' Coy Cut

Hey there, recession fans.  Time for another round of "Who's Gutting Associate Salaries?"  Our latest entrant is Perkins Coie, the Seattle-based firm that opted to make the news as upbeat as possible. According to the tipmeisters at Above The Law, the firm is cutting just under 4 percent of salaries, making it one of the softest hits, and expressing "confidence" that there will be no more layoffs this year.  If that's true (and PC doesn't play the stealth layoff game), it's not all that bad a batch of news.

And for those of you who missed the news, NALP wants you to know that associate salaries are not going up.

Firm	Ca. Associates	Date of Cuts	Salary Cuts
Perkins Coie	49	8-05-09	3.8% across the board
Foley & Lardner	55	7-20-09	10% across the board
Alston & Bird	35	7-01-09	$5,000 across the board; said to be temporary
Howrey	56	6-22-09	1Y to $100K base; 2y: $125K. Training all around.
Bryan Cave	47	6-11-09	10% cut across the board
Pillsbury	154	6-09-09	"Temporary," productivity-based, said to be 10-20%
Sonnenschein	35	5-21-09	1Ys to $145K; up to 15% for others; big "performance-based" revamp next year
Reed Smith	103	5-20-09	10% across the board; incoming at least that (TBD)
DLA Piper	134	5-15-09	1Y: Down to $145K in top markets. 2y+, case-by-case
Seyfarth Shaw	82	5-01-09	Cuts of 5%-20% to individual associates, others
Nixon Peabody	66	4-27-09	1Y: $145K; other performance-based cuts of 15%-20%
Squire Sanders	38	4-27-09	All Classes: 10% cut
Baker & McKenzie	70	4-20-09	Reported 10%-25% cuts, not tied to class*
Davis Wright Tremaine	27	4-14-09	All Classes: 5% cut
Greenberg Traurig	66	4-13-09	1Y: $144K (10% cut)
Hogan & Hartson	31	4-02-09	1Y: $145K; Reduced "1800 hour track" for all levels
Allen Matkins	100	3-31-09	Incoming & current 1Ys: $145K. Some cuts to 2Y+ (reportedly about 20%)

We'll continue to update as the cuts come. A few thoughts on the trend, plus caveats and whatnot, after the jump.

This Just In: Associate Salaries Ain't Goin' Up

The National Association for Law Placement is calling it: Associate salaries have peaked for the foreseeable future.

NALP released its annual associate salary survey on Monday. No surprises: It showed firms with over 1,000 lawyers paid first year associates on average $160,000 in 2008. The lowest paid first years made $70,000 at firms with between 2-25 lawyers. The data was gathered from 642 offices, some of them from the same firms to reflect geographic differences.

“This year’s report reflects what is likely to be the apogee of large firm salaries for the foreseeable future, and represents the culmination of increases since 2006,” said NALP’s press release.

The results are a little dated because they represent data through April 1, 2009, before most of the big firm salary cuts took place.

You might refer to our running total of the firms with a notable California presence that have cut salaries, and the dates they did it.

— Amanda Royal
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Quinn Defers First-Years in Bay Area

Quinn Emanuel has deferred eight incoming associates in its San Francisco and Silicon Valley offices until January, firm chairman John Quinn said Wednesday.

In an email, Quinn wrote that it was a “question of managing their absorption into the work flow of the firm.”

“the numbers were such that we feared we couldn't do a good job of it and there wouldn't be enuf work for all of them if they arrived at once,” Quinn wrote in his characteristic no-caps, shorthand style.

more details 4 u after the jump

Orrick Moves OCI Later, And Tells Current Summers Their Offers Will Be Deferred to '12

Updated: With a link to the memo, below.

Orrick has worked out a way to unclog a logjam of new associates coming through its pipeline: With its fall 2009 class already bumped to join the firm in January or March of 2010 or even 2011, Orrick has decided its current summers who get offers won’t be joining until January 2012.

The firm is also saying it will recruit from campuses starting in November and running through March, instead of the traditional late summer OCI season.

It made both announcements in a memo to law school deans and assistant deans yesterday, which was posted on Above the Law this morning.

“With the fall on-campus recruiting season about to begin, and with many law students needing to make plans and commitments for their future, we knew we had to deal with the issue promptly,” Silicon Valley Orrick partner Stephen Venuto wrote. “Therefore, we decided it was in the best interests of our existing summer associates and fellows, our upcoming new associate classes as well as those students we plan to recruit in the future to make and announce both of these decisions now.”

In a recent story in one of our sister publications, The National Law Journal, it seemed that other firms were advocating this kind of move, too. That all makes you wonder, when will the deferring end?

We’ll have a full story on Orrick’s recruiting change, and reactions to it, tonight on CalLaw.com.

—  Petra Pasternak

Welcoming Lockstep's Demise

A quick followup on Orrick’s news yesterday that it’s dumping lockstep. We reached out to Susan Hackett at the Association of Corporate Counsel to see what she had to say about it.

The ACC launched an initiative last year called the Value Challenge, an effort to get law firms to … um ... they don’t put it this way, but it’s basically to get law firms to stop overcharging for stuff they could do more cheaply.

Corporate counsel like seeing the moves Orrick is making because it’s pretty much how they’ve been doing things for a long time.

“We are really supportive of firms that are considering performance-based comp throughout their ranks,” Hackett wrote in an e-mail.

“It would allow much greater freedom for associates and partners who would like to be judged on their contributions (and paid accordingly), rather than being told they can’t be valuable unless they generate a big stack of hours. Most clients I know who are watching these issues really laud firms who make this move — it is consistent with the corporate model that they also employ in their workplaces and which encourages evaluation, productivity, profitability, and efficiency, all based on performance and not on hours logged.”

(Note to associates: None of this means you’ll actually work fewer hours, of course.)

— Amanda Royal
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Associate Salary Cuts: The June '09 Edition

AUGUST 5 UPDATE: You've followed an old link. The chart has been updated and moved here.  Follow that link for the latest, or enjoy the June version, below the jump.

Day Casebeer's Suitor Goes Cheap on Associates

With Day Casebeer set to be acquired by Howrey, we wonder what the handful of associates at the little Cupertino firm think about the big changes to Howrey’s associate compensation.

If you didn’t see the news, Howrey announced in a memo (that, like all internal law firm memos, appeared on Above The Law) today that it’s reducing salaries and billable hours for a select group of its young associates, while upping the amount of training they get.

Welcome to Big Law, Day Casebeer associates … after the jump.

MoFo Partner Checks Watch, Harumphs

You would think law firm management would have learned by now to stop writing stupid and overbearing memos. They all end up on the Internet; hell, Above the Law is making a cottage industry out of posting moronic memoranda for public ridicule. 

Which brings us to Morrison & Foerster. 

ATL has a memo from New York Managing Partner Charles Kerr, berating the children (to judge from the tone) for not showing up on time, preferably for 8 a.m. jumping jacks in the lobby.  Big Law is already famous for consuming as much of a lawyer's life as it can, with no respect for evenings and weekends (and, yes, pretty good money in exchange). These days, terror of layoffs is everywhere, and few firms have enough work to go around.  Great time to make sure everyone's in early to rearrange their Post-It notes by size and shape.

Interestingly, if you google "Charles Kerr" and "mofo," already the memo post is the top hit.  Just google his name and you get "The Ultimate Temple of Charles Kerr Hatred," but we were disappointed to discover it's apparently some other Chuck Kerr in New York. Though someone in Mofo's IT department may be developing a competing side project as we speak.

-- Brian McDonough

Associate Aims for Africa (It's the new thing, apparently)

James Williams is a bit envious, and he’s not afraid to admit it.

The fourth-year associate at Davis Wright Tremaine has plans to travel to Rwanda later this year to volunteer on a community project there. He’s hoping to take two weeks off to do it.

That’s compared to the entire three months off Myles Solomon managed to get from his small San Francisco shop to volunteer in Uganda and Tanzania.

“I definitely am envious of him in terms of taking those three months off,” he told Legal Pad. In fact, he admits to being just a wee bit jealous even of some of his friends who’ve been offered two thirds of their salary to leave their firms for a year. They agonize over the decision, he says. He thinks he wouldn’t. “In a perfect world, you take it and you have an adventure,” he said.

Alas, the world is far from perfect.

After the jump: Living in an imperfect world.

Reed Smith Talks Pay Cuts, Fixed Fees, Other Measures

Reed Smith on Wednesday joined the ranks of firms cutting associate salaries, and senior associates aren’t immune this time. The firm is cutting associate salaries 10 percent across the board. Incoming associates will make at least 10 percent less, according to a firm memo.

Looks like partner pay also got chopped at Reed Smith. The memo, which was first posted on the blog Above the Law, says the firms has changed its business model in response to the economic downturn: “Among other things, this has meant lower compensation levels for partners.”

A chat with Reed Smith management, after the jump.