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$160K Starting Pay Unlikely to Be Cut by NY Firms, Experts Say

Posted May 8, 2009 5:50 AM CST
By Debra Cassens Weiss

New York law firms are unlikely to cut associate salaries that start at $160,000 absent a move by market leaders such as Sullivan & Cromwell; Cravath, Swaine & Moore; Simpson Thacher; and Davis Polk & Wardwell.

The experts aren’t holding their breath. New York firms already reduced associate bonuses after Cravath took the lead in November, the American Lawyer reports. The firm cut year-end bonuses for first-year associates from $35,000 to $17,500 and axed supplemental bonuses starting at $10,000 for second-year associates.

Among the experts expressing doubt about a salary rollback are law firm consultants Peter Zeughauser and Brad Hildebrandt of Hildebrandt International. "New York firms are going to do it last, if they ever do it," Zeughauser told the American Lawyer. Said Hildebrandt, "I think what some of the New York firms believe is that with the position they hold in the marketplace, it would be counterproductive for them to cut compensation."

One New York firm, Chadbourne & Parke, has broken from the pack, the story says. It announced last week it is cutting associate and staff salaries for the remainder of 2009, but didn’t reveal by how much. Lawyers may recoup part or all of the pay cut in year-end, discretionary bonuses.

Several law firms based outside the city have already cut salaries, including Nixon Peabody, Squire Sanders & Dempsey, Seyfarth Shaw, and McGuireWoods.

Comments

1.

B. McLeod
May 8, 2009 7:31 AM CST

Eventually, the economy will force them to activate their brains.

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2.

TN
May 8, 2009 7:46 AM CST

Ha, like I have said before…nothing will really change in Biglaw. 

I am beging to think that Law Firm Consultants are actually part of the problem with the legal field and the bane of all law grads existence. 

I didn’t think it possible but I view Law Firm Consultants as being viler and more worthless than Biglaw attorneys.

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3.

LJH
May 8, 2009 9:09 AM CST

$160K is rather generous, but not completely insane, for Manhattan.  It is completely insane for Houston or Richmond.

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4.

DR
May 8, 2009 10:01 AM CST

I have to agree with LJH:  $160 is generous, but not completely insane.  The cost of living in NYC (even rents in the outer boroughs) is really high compared to the rest of the country (except for maybe San Francisco and the like). 

I previously worked for two small NYC firms (7 attorneys each) and made almost $100k at each.  I made a lateral move to a big firm in NYC, and although I make less than the starting associates (pay structure is different for laterals), I make more than I used to and still find it more feasible to live in Brooklyn, especially with a family.  Our city income taxes are almost as high as our state income taxes.

I would expect to make much less outside the city, because I know that my cost of living would decrease along with a cut in pay.  We don’t live extravagantly (we don’t even have a car), but we are able to pay the mortgage, pay the student loans, save a little and have a decent standard of living in the city.  I don’t even talk to my family (who live in other states) about our family income because it paints an unrealistic picture of our finances and how we could or should be living.

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5.

DR
May 8, 2009 10:04 AM CST

I should add that I find it disconcerting on some level that an experienced lateral would make less than a starting associate.  But, I like my work and I’m grateful that I’m busy, so getting upset about those kinds of things seems counterproductive.

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