Font Size: 
Following Outcry, DLA Piper Amends Pay Plan
The National Law Journal
May 20, 2009
DLA Piper has pulled back on pay cuts announced May 15 that would have slashed compensation by 20 percent for some associates.
A firmwide memo released Tuesday night stated that it would apply a 10 percent salary cut for all associates. The previously announced cuts called for a 10 percent reduction for first-year associates. Associates in other classes were to receive reductions on a case-by-case basis, based on performance level and class year.
Tuesday's memo said that the previously announced formula for salary reductions for non-first-year associates was a "bright line billable hours-based calculation that did not fully take into account the timing of significant pro bono commitments, firm-related non-billable hours or vacations."
The latest memo stated the many conversations with partners and associates prompted the firm to make the change.
"[I]t is clear that there are numerous anomalies in individual associate situations such that people who were typically strong performers would receive the additional compensation reduction. This is not the result we want to achieve," the memo stated.
The change also followed several posts on legal blog Above the Law from commenters and tipsters complaining about the impact of the reductions to associates not in the first-year class. Commenters and tipsters complained that the firm was making cuts based on only a few months of performance.
DLA Piper spokesman Jason Costa said Wednesday that the firm had "tried to take into account all situations" when it first announced pay cuts Friday but that "it was impossible to have a completely open discussion about things ahead of time." He said that associate compensation in the firm's transactional practices was affected the most under the first plan.
For first-year associates, the law firm is reducing salaries in major markets such as New York, Washington and Silicon Valley, from $160,000 to $145,000. First-year salaries of $145,000 in other cities such as Phoenix, Tampa, Fla., and Raleigh, N.C., will drop to $130,000. The changes become effective June 8.
The pay reductions are part of DLA Piper's larger plan to move toward merit-based compensation for associates. DLA Piper, with 3,785 attorneys worldwide, is ranked No. 1 on the NLJ 250, The National Law Journal's annual survey of the nation's largest law firms.
Both memos were written by Global Board Chairman Francis B Burch Jr., Joint-Chief Executive Lee I. Miller and U.S. Managing Partner Terry O'Malley, who said they have taken "significant reductions" in their projected 2009 compensation. The firm also has reduced compensation for senior counsel and of counsel attorneys.
