Salary Information Spotlight

Experts: Lower Associate Pay Is Here to Stay

Fulton County Daily Report

Fifty-five percent of participants in a recent seminar on associate compensation said they believe that associate salary cuts are temporary. But Altman Weil consultants presenting the webinar said lower salaries are here to stay and are part of a "fundamental and profound reset" after two decades of "steady, sometimes spectacular growth" for the profession. Associate pay did not drop enough in the recent round of big law firm cuts and should have been restored to 1998 levels, said Altman Weil's James Cotterman.

Firms Scammed by Overseas 'Clients' Sue Handling Banks

New Jersey Law Journal

At least two New Jersey law firms that were victimized by phony check scams have gone to court seeking to get the money back from the banks that handled the checks. Freedman & Gersten claims it wired $236,659 to a company in South Korea based on a check that turned out to be fake, while Levitan & Frieland has lodged similar allegations. Freedman is suing Bank of America, on whose assurances it says it relied when it deposited a client check in its attorney trust account and wired most of the money overseas.

As Cravath Kicks off Bonus Season, Will Clients Disapprove?

New York Law Journal

Cravath, Swaine & Moore on Monday announced year-end associate bonuses that for the most junior lawyers were at best half of what they received last year. Cravath's announcement kicks off the bonus season among New York law firms, but the head of one major law firm said he would expect a negative reaction from clients on "any bonuses being paid in the current economy." He said he expected that a decision to pay bonuses "would have been deferred for some number of months."

Fla. Managing Partners Survey Shows Year of Retrenchment

Daily Business Review

Firms across South Florida slashed expenses this year by cutting attorneys and staff, renegotiating with vendors and eliminating lavish firm dinners and retreats, according to a Daily Business Review survey of 76 area law firm leaders. Revenue per lawyer dropped or remained flat at 48 percent of firms last year, with large firms hardest hit, according to the survey. And just 34 percent of managing partners expect increased partner profits this year compared with 70 percent last year.

Allen Matkins Makes Second Cut to Pay, Lays Off Associates

The Recorder

Los Angeles firm Allen Matkins has made another cut to associate salaries and has laid off "fewer than 10" associates, according to Mike Palmer, the firm's executive director. The firm had an earlier round of salary cuts and layoffs in March. Palmer said that the pay cuts affected a number of associates at all levels in slow practice areas, primarily real estate and corporate, including some associates whose pay had already been reduced in March.

Major U.K. Firms Cut Back Profit Payouts Amid Tough Markets

Legal Week

A growing number of U.K. firms are either holding back or reducing partner profit distributions as a result of the recession. Pinsent Masons and DLA Piper have both withheld profit distributions in recent months. Pinsent has withheld its last two quarterly profit distributions, with the firm attributing the "profits distribution holiday" to a series of management responses to the recession. DLA held back its August distribution firmwide and has yet to decide on its next payment, due in November.

Sheppard Mullin's N.Y. Associates Share the Salary Pain

The Recorder

After Morrison & Foerster on Monday became the first firm we know of to cut California associate salaries while leaving New York salaries the same, we checked in with a couple of other firms to see whether they agreed with MoFo's thinking on the matter. Bob Williams, chief talent officer at Sheppard Mullin Richter & Hampton, said his firm had grappled with the same issue before deciding to pay all incoming associates $145,000, regardless of city.

In-House Lawyers Talk Tough on Getting Firms to Mind the Bottom Line

Corporate Counsel

For the first time in three years, in-house counsel say that reducing outside legal spending is their first priority, according to a study released at the ACC meeting in Boston. Jeffrey Carr, GC of FMC Technologies, talked about how companies can start doing more alternative fee arrangements. "Once you decide to go down this path, there's only one question you need to ask law firms," Carr says. "Will you do this? Yes or no. If they say no, they are free to work elsewhere. Draconian? Yes. Effective? Absolutely."

Morrison & Foerster Lowers California Starting Pay

The Recorder

Morrison & Foerster said Monday it will pay incoming associates $145,000 in offices outside of New York and Asia, making it one of the first firms to publicly state it won't pay California first-year associates as much as those in the Big Apple. MoFo Chairman Keith Wetmore said salaries aren't likely to fall further. The announced salaries are not set in stone, a firm statement said, noting that the firm "may elect to adjust as required based on larger market developments."

Williams & Connolly Sues Client for $2 Million

The National Law Journal

It's not uncommon these days to see law firms suing former clients over unpaid legal bills. Still, this latest bit of legal fee litigation seems remarkable: Williams & Connolly is taking a former client to court over $2 million after the company practically invited the firm to sue. Or so says the Williams & Connolly's complaint, filed Friday in federal court in Washington, D.C.