The Firms
November 20, 2008 5:38 PM
No Bonuses, No Salary Increases, No Expected Layoffs Says Bryan Cave's Chair
Posted by Zach Lowe
As first reported today on Above the Law, Bryan Cave took two unique steps to cut costs in the midst of the credit crisis: it delayed associate raises--scheduled originally for January 1 in most offices, for three months, and they permanently scrapped their unique associate bonus program. Don Lents, the firm's chairman, chatted briefly about those decisions.
Hi, Don. How long have you been thinking about these decisions?
For about two weeks now. The decision was ultimately made by our executive committee, and we finalized it this week.
Does the three-month delay in salary increases impact only associates and staff, or partners too?
Just associates and staff. We have a different compensation process for our partners.
Has the firm ever done this before?
No, we haven't. But we are a conservatively run firm, and we always have been. This is obviously an economic environment in which we have to look at opportunities to control our costs. It's something clients are expecting. It also gives us an opportunity to see how 2009 starts out and what the business environment is going to look like as we get into the new year.
We were intrigued by the reports of an associate bonus formula at the firm. Can you tell us about how that worked before you guys decided to put it on hold?
Sure. We had a formula we used for about 30 years in which an associate would get a small percentage of any business that came from a new client they generated--up to a relatively low threshold. It was really a percentage of the first few thousand dollars of that client's business. We certainly value entrepreneurship among our associates, but the program frankly created incentives for an associate to bring in any kind of business--regardless of whether it fit with their skills or the type of things they should be doing to develop their own practice.
So are you putting it on hold or permanently re-thinking it?
This is permanent. But we will continue to give some associates bonuses based on merit determinations.
Do you know of any other firm that used a similar bonus formula?
No. As far as we can tell, it's pretty unusual.
You guys are fresh off acquiring about 220 lawyers from Powell Goldstein. Will these cost-cutting moves help you avoid trimming head count by laying off associates? Or are you planning layoffs in the next few months?
We are not contemplating any layoffs right now. But like any other business, we'll simply have to continue monitoring things.
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