Posted Nov 10, 2009 05:18 pm CST
Reed Smith is cutting billing rates and pay by 20 percent for 51 new associates joining the firm’s U.S. offices in January.
The new starting pay will range from $130,000 in major markets to $110,000 in Pittsburgh, according to a press release (PDF). At the same time, billable hours expectations for new associates will drop from 1,900 hours a year to 1,700 hours.
Pay for new associates at many large firms has dropped from $160,000 to $145,000, but one legal consultant, James Cotterman of Altman Weil, has said starting pay should drop to $125,000 or even $100,000. New associates working at Reed Smith in major cities made $160,000 last year.
Another firm cutting associate salaries, Howrey, is paying only $100,000 for select first-year associates in a training program, but it is offering $25,000 bonuses to start at the firm and then to complete the training.
Eugene Tillman, Reed Smith’s global head of legal personnel, said in the press release that the new salary level “will put Reed Smith in a stronger business position in a changing marketplace.”
“Our new U.S. starting salaries represent a reasonable and appropriate reset based on today’s economic environment,” he said.
Global managing partner Gregory Jordan said the firm lowered salaries and billing rates in response to clients’ concerns about cutting the costs of legal services. “We wanted to send a clear message that we are listening,” he said in the press release.
The announcement comes just a few weeks after Reed Smith released information on a new program that abandons lockstep pay raises and offers additional training to associates.