April 14, 2009 2:22 PM
Next on Firms' Chopping Blocks: Associate Salaries
Posted by Ross Todd
Update, 4/14/09, 3:30 pm – A comment from Greenberg Traurig has been added to the third paragraph below.
In case you missed it, our colleagues at The Legal Intelligencer ran an interesting story last week that considered how much associate salaries might drop given the state of law firm business today. We were reminded of the Intelligencer's story when reading the news of salary cuts at McKenna Long & Aldridge and Greenberg Traurig.
Our colleagues at the Blog of Legal Times report
that McKenna cut
$20,000 from its first-year salaries. "We are committed to providing our clients with top-quality
counsel at a cost that is appropriate to the market and economic
conditions," McKenna chair Jeffrey Haidet said in a statement.
Above the Law reported Monday that Greenberg Traurig is cutting first-year salaries by 10 percent. The firm, in a statement released Tuesday, said, "We have made some changes in our summer and first-year associate base salary structures in certain offices and practices, while we have not made changes in others. Base salaries for our first-year associates have generally been kept at or within 10 percent of the prior levels. These changes reflect the firm's long-term commitment to delivering value to our clients, especially at a time when many of our clients need to reduce their costs due to global economic conditions."
The moves aren't surprising. Law firm consultants and experts have predicted such salary cuts as part of the scramble to cut costs and readjust the way lawyers are hired and compensated. As one firm leader told the Intelligencer, "I could see $145,000 go to $100,000 in a nanosecond," though he said he wouldn't be the first to do it.
So that's the big question, will McKenna and Greenberg set a pattern? Or, as the Intelligencer pointed out, will starting associate salary cuts become a nonissue, given how many of those associates have been deferred well into 2010? We rang law firm consultant Peter Zeughauser for his take. "I expect that Greenberg will draw a few followers among The Am Law 100," he says. "There’s a fair chance you’ll see movement from other firms."
We'll be watching.
A Troubling Trend Continues: McKenna Long Cuts Incoming Associate Salaries by $20,000
The National Law Journal
How Low Could Associate Salaries Go?
The Legal Intelligencer
Sure We’ll Cut Associate Salaries, As Long As Someone Else Does First
Wall Street Journal Law Blog