Posted Jun 18, 2013 07:20 pm CDT
A new policy at Becker & Poliakoff of holding back 20 percent of partners’ pay is not popular, managing shareholder Gary Rosen admits.
However, he said such measures are a standard business procedure at law firms today in order to maintain a cash reserve and insisted that the holdback is not a sign of any financial issue at the 145-attorney Fort Lauderdale, Fla.-based law firm, the Daily Business Review reports.
“Every law firm experiences ebbs and flows with its cash flow,” said Susan Greene, a spokeswoman for the firm. “This way we can budget ahead.”
Although some firms have a revolving line of credit to smooth over disconnects between income and operating expenses, Becker & Poliakoff doesn’t, the article notes.
While not having a credit line reflects a conservative approach to debt, and experts agree with Rosen that such partner pay holdbacks are a common practice, some are dubious about this and other decisions Rosen has spearheaded during his first 18 months at the helm.
An unidentified former lawyer at the firm tells the Daily Business Review that partners were unhappy not only about the 20 percent pay holdback but the manner in which it was imposed, in a January email announcement.
“We received an email out of the blue, not a phone call, not an equity partnership meeting,” this attorney said. “Who does that?”
Rosen said a meeting was held before the pay holdbacks were imposed. He also said the pay holdbacks will be cut to 10 percent as of July 1 and eliminated by the end of 2013.
Meanwhile, Penny Barnard, a retired longtime litigation secretary Becker & Poliakoff, questions why the firm decided to move its offices to a downtown Fort Lauderdale high-rise, where parking is at a premium, given the difficulties the situation imposes on employees and the large number of retirees that come to the office as a result of the firm’s focus on condominium association matters.
But Alan Becker, who preceded Rosen as the firm’s leader, says he is making good moves.
“They wanted a fresh look,” he said of the new offices, noting that the commercial real estate market right now offers terrific lease terms. “We’ve always had a good commercial practice, but we’ve not been known for it. He’s trying to position the firm so our reputation catches up to our work.”
ABAJournal.com (2010): “Ex-Associate Set for Trial in Small-Claims Suit Against Becker & Poliakoff in $2K Pay Dispute”
ABAJournal.com (2010): “After Perhaps $100K in Legal Fees, Becker & Ex-Associate Settle $2K Pay Dispute”
Barbershop doubles as a law office