To date, 69 firms have announced cuts in lawyer salary (excluding changes to equity partner compensation). The cuts have advanced across the Am Law 200 as expected: they started out among firms in low profit margin buckets and then broadened to higher margin buckets and deepened within the buckets, as evidenced by the curves advancing rightward and upward over time in the below figure. The rate at which firms are cutting salaries has started to slow—11 firms in the last two weeks compared with 16 in the two weeks prior to that.
What does this suggest for what happens next? No one knows, but three thoughts. First, while the announcements of cuts have slowed, the number in the last two weeks is large enough to suggest they’ve not ended. Based simply on the shape of the curves on the chart, we might particularly expect more announcements from firms in the under 25% and 40-to-45% buckets.
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