As a Few Firms Cut Associate Pay, Some Ask: How Low Can It Go?
Beset by high-flying associate pay—which was boosted, at many firms, not long before the economy went into a tailspin—a number of partners are now pondering a new question: How low can it go?
Although no one wants to make the first move, partners are talking behind the scenes about possible pay cuts, reports the Legal Intelligencer in an article reprinted by New York Lawyer (reg. req.).
A few firms have already announced reductions in associate pay. They include Allen Matkins Leck Gamble Mallory & Natsis in Los Angeles, and Virginia-based McGuireWoods, both of which now plan to pay first-years about $145,000.
And “I could see $145,000 go to $100,000 in a nanosecond,” one unidentified partner tells the Philadelphia legal publication.
In another seismic pay shift promoted by the dismal economic environment, a number of firms also are moving away from a traditional lockstep salary structure that pays associates in the same law school graduating class at the same level to merit-based systems that reward individual effort.
“This is an opportunity for some firms to rethink the salary structure, which has potentially gotten a little out of taste with the value,” says consultant Lisa Smith of Hildebrandt International Inc.
Related coverage:
ABAJournal.com: “Will $144K Become the Norm for BigLaw Associate Starting Pay?”
ABAJournal.com: “LA Firm Cuts Associate Pay, an Indication of Cracks in Lockstep Pay Model?”
ABAJournal.com: “Some Law Firms End Lockstep Pay for Associates, as Economy Plummets”
