Salary Information Spotlight

Skadden Matches Cravath, Cleary Bonus Numbers

The American Lawyer

After doubling the bonus figures set by Cravath, Swaine & Moore last year, Skadden, Arps, Slate, Meagher & Flom will this year match Cravath (and Cleary Gottlieb Steen & Hamilton) by giving out a bonus that represents a sharp cut for younger associates.

Lovells to Move Farther Away From Lockstep Under Planned Merger With Hogan Hartson

Legal Week

As partners at Lovells and Hogan & Hartson met this week to discuss their planned trans-Atlantic merger in depth, more details emerged concerning the structure of the deal, which would see the two firms integrate governance and remuneration but maintain separate profit pools. The merged Hogan Lovells would bring the two firms' compensation structures into closer alignment, with Lovells implementing a structure similar to Hogan's merit-based model for partner pay.

Expenses Down for Small and Midsize Firms, but Revenue Down Faster

The National Law Journal

Smaller and midsize law firms have been able to reduce expenses -- but revenues have declined faster than their ability to trim costs. That's according to the recently released Survey of Law Firm Economics, conducted by ALM Legal Intelligence. The survey shows that firms reduced expenses by 1.8 percent last year, but revenue slid by 4 percent. But on the positive side, the firms surveyed, depending on size, are able to collect their fees 96 percent to 98 percent of the time despite the downturn.

Reed Smith to Ask Nonequity Partners to Pay Chunk of Salary to Firm

The American Lawyer

Reed Smith will ask its roughly 300 nonequity partners to contribute a percentage of their base pay -- likely about 15 percent -- to the firm in order to maintain their partnership status, Gregory Jordan, the firm's chair, has confirmed. Those who choose not to kick in can "opt to be a kind of salaried employee without those attributes of partnership," Jordan says. The move has unnerved a chunk of the nonequity partner ranks, according to sources.

Covington Freezes Associate Salaries Outside New York

The American Lawyer

Covington & Burling announced Tuesday that it would freeze associate salaries at offices outside New York City "based on an assessment of the market." The firm announced the freeze on the same day Reed Smith announced a 20 percent cut in first-year associate salaries and a similar cut in first-year billing rates.

Reed Smith Cuts First-Year Salaries, Billing Rates by 20 Percent

The Legal Intelligencer

Reed Smith has cut starting salaries by about 20 percent for the 51 first-year associates set to start in January and, in turn, is cutting their billing rates by the same margin. In New York, Chicago, California and Washington, D.C., for example, Reed Smith associates will move from $160,000 down to $130,000. The decision comes just weeks after the firm did away with associate classes and instituted three levels of associate tiers that will work within a competency-based advancement model.

Kentucky Court Administrators Got Hefty Raises Prior to Worker Layoffs

The Associated Press

A dozen Kentucky court administrators received hefty raises and a published report says it happened months before 47 other workers were laid off. The Lexington Herald-Leader cites salary records in reporting the administrators got increases that boosted some salaries by 20 percent or more. The Administrative Office of the Courts says the administrators who got raises took on more responsibilities as the court system trimmed staff to save money.

Cleary Announces Bonuses in Line With Cravath

New York Law Journal

Cleary Gottlieb Steen & Hamilton on Friday announced associate bonuses with rates that were, at most, half what the firm paid its most junior lawyers last year. Associates going into their second year in January will earn $7,500, down from $17,500. The most senior associates will earn $30,000, the same as in 2008. Cleary is only the second major firm so far to announce bonuses this year, with its bonuses matching levels announced last week by Cravath, Swaine & Moore.

The Issues in Moving From Law Firm Lockstep to 'Levels' Compensation

New York Law Journal

Law firms are changing the way they hire, evaluate, develop, promote and pay their associates, says consultant Larry Richard. Case in point: the accelerating interest among law firms in moving from the traditional lockstep to a more performance-based "levels" system of compensation. Richard notes that for a levels system to work, a firm needs both well-functioning infrastructure systems and a widely held perception that the systems are fair and accurate. He discusses the major organizational changes required.