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Law Practice Management

Good News: Big Bonuses; Bad News: Salary Freeze, McDermott Announces

Posted Mar 17, 2009 4:04 PM CST
By Martha Neil

Associates at McDermott Will & Emery got both good news and bad news in recent internal announcements.

First the good news: Associates remaining at the firm after recent layoffs will be getting big bonuses for their work in 2008. The firm describes them as "in many cases exceed[ing] the market," in an internal memo reported by Above the Law.

And unnamed sources report that the actual bonus amount was indeed surprisingly good news: It averaged $22,266 for first-year associates, with a high of $60,000 or so reported by some fourth-years, the law blog says.

The bad news, however, is that the firm is freezing associate pay at 2008 levels, McDermott announces in another e-mail provided by the law blog, explaining that this will give the firm greater "flexibility."

The merit-based compensation system at McDermott may reflect the future norm at a growing number of BigLaw firms, as the dismal economy pushes them to eliminate a traditional lockstep compensation system that paid associates in the same law school graduation year at the same level.

Related ABAJournal.com coverage:

Some Law Firms End Lockstep Pay for Associates, as Economy Plummets

McDermott Lays Off 60 Lawyers and 89 Staff Members

Comments

1.

B. McLeod
Mar 17, 2009 6:09 PM CST

I would have to say that right now, a salary freeze almost does not even qualify as “bad news.”  I would probably tend to actually regard it as “good news,” when contrasted with pay cuts or layoffs.  If the firm has actually attained stability such that a freeze is all it needs to get it through the rest of this recession, it would be resoundingly good news.

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2.

Anonymous
Mar 17, 2009 8:46 PM CST

“How does this affect me?” wondered the unemployed recent law school graduate, with $200k in student loans, n job prospects, and absolutely no reason to ever join the ABA, which is clearly not concerned about people like him.

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3.

B. McLeod
Mar 17, 2009 10:09 PM CST

Of course the ABA is concerned, just not able to do much.  If you check the site, you will find they have recently added resource links to try to help with job searches, networking and professional development.  Will that significantly help everybody caught in the current downturn?  Probably not.  However, Uncle Sam would like to hear from some literate and disciplined recruits who would like to be in the army for awhile.  It might be a good idea to look into it.

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4.

Anon Stop Whining
Mar 18, 2009 7:05 AM CST

Anon, why would you borrow 200k in student loans? Did you consider working part-time while attending law school and paying some of your debt or attending law school part-time and working full time? Why are you kicking the ABA? Did the ABA advice you borrow an insane amount of money although you probably only make 45-60k a year for the first 10 years of practice if even that much? Blame yourself, Anon not the ABA.

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5.

Steve
Mar 18, 2009 11:00 AM CST

Ya really $200K in loans?  Are you out of your mind?  I think med students who go into that kind of debt are nuts much less law students.

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6.

Kristin
Mar 19, 2009 10:26 AM CST

And meanwhile, these associates are getting paid 6 figure salaries anyway, with gigantic bonuses.  Who feels sorry for them that their salaries are frozen?  Not me, that’s for sure.

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