News of the firm's move first leaked to Above the Law earlier this week, which reported that associates were informed of the pay cuts via voice mail.
The Plain Dealer reports that first-year associate salaries will drop from $130,000 to $117,000 per year as of May 1. Employment laws in Europe and Asia will require that the cuts take place for associates in Europe and Asia a month from now.
Seven of the associates let go by Squire Sanders were in the firm's Cleveland office, reports the Plain Dealer. Most of those fired firmwide had spent three years or less with the firm.
Timothy Sheerhan, the firm's hiring chairman, told the Plain Dealer that the salary and staff cuts reflect a drop in business both for Squire Sanders and its clients. Sheerhan told the paper that clients have told the firm that "the value that we provide is out of line in some cases with what we are charging for our work."
Sheerhan told Crain's Cleveland Business that besides Cleveland, the firm's layoffs occurred in China, the Slovak Republic, Venezuela, Hong Kong, Ukraine, the U.K., Russia, Poland and the Dominican Republic. Besides the seven layoffs from the Cleveland office, another seven came from the rest of the firm's U.S. offices, including one in Columbus.
New hires have also had their start dates postponed until January 2010. Sheerhan told Crain's that their salaries will not be more than the $117,000 per year being made by current first-years.
While the firm's litigation department continues to remain busy, Sheerhan told Crain's that the cutbacks were an unfortunate "action we regret having to take."
According to Am Law 200 financial data obtained by The American Lawyer, Squire Sanders saw gross revenues increase 9.2 percent last year from $530.6 million in 2007 to $579.5 million in 2008. But profits per partner fell 4.9 percent from $825,800 to $785,000.
The layoffs leave the firm with 843 lawyers in 32 offices throughout 15 countries.
See if your law firm is on The Layoff List.
This article first appeared on The Am Law Daily blog on AmericanLawyer.com.