Katten Lays Off 69, Cuts Pay of Associates Low on Billables By 20%
Katten Muchin Rosenman announced today that it is laying off 23 attorneys and 46 staff members.
And that’s not all. Among other cost-cutting measures, the firm is reducing by 20 percent the salaries of remaining associates at the Chicago-based international law firm who were 10 percent below the firm’s 2000-hour target for billable hours in 2008, according to a statement provided to the ABA Journal.
Summer associate pay is also being reduced by 20 percent, and the start date for incoming first-year associates is being pushed back to Feb. 1, 2010, when the firm’s new fiscal year begins.
The good news for the Katten associates hit with pay cuts: They still have their jobs, and they can regain their original salaries, going forward, by meeting the 2,000-hour target.
A lower compensation scale now applies to underutilized associates, reducing base salary by 20 percent for those who were not within 200 hours of the firm’s 2,000-hour billable target for 2008. However, the new system “offers the chance for them to earn back their total base at the end of this year if they meet their hours going forward,” the statement explains.
“This structure, while reducing some associates’ base compensation, will save their jobs, enable us to reduce costs, and maintain our existing practice teams,” it continues. “We devote significant resources to recruiting talented lawyers and creating teams that provide exceptional client service, and this move allows us to preserve those strong teams. It also means that when economic conditions do improve, we will still have our people in place.”
The 69 layoffs announced today, which are described by Katten as “a relatively small number of our attorneys and staff,” involve 12 associates, seven nonequity partners, four other attorneys, six paralegals and 40 staff members.
Additional coverage:
Am Law Daily: “Katten Announces Layoffs, Salary Cuts”
Crain’s Chicago Business: “Katten cuts 23 lawyers, pay”
Above the Law: “Nationwide Layoff Watch: Instant Reports From The Katten Meeting”
Above the Law: “Mystery Meeting Set at Katten: 2:00 p.m. (CT) Today”
ABAJournal.com: “Layoff ‘Herd Mentality’ Ignores Greater Savings of Pay Cuts, Prof Says”
Last updated at 7:39 p.m. to link to Crain’s post.
