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Partner Pay Cuts are New Signpost in Dismal Law Firm Economic Landscape

Posted Mar 24, 2009 1:49 PM CST
By Martha Neil

Associates and staff were low-hanging fruit waiting to be cut in law firm layoffs. Start dates for new attorneys have been delayed, salaries have been frozen and benefits formerly taken for granted have been axed. At least one well-known law firm has even reduced the coffee service offered at its Chicago headquarters.

But now BigLaw partnerships seeking to stabilize their finances amidst a global economic free fall are getting down to the nitty-gritty. A growing number of major firms are reducing partner pay, Bloomberg reports.

Cuts in partner compensation have recently been announced at Allen & Overy, Dewey & LeBoeuf and DLA Piper, and could well be quietly under way at other major international firms, too, according to the news agency.

“It’s hard to get rid of a partner, so cutting pay is a simple way of sending a message that maybe people ought to think about moving toward the door,” says attorney Bruce MacEwen, a New York City-based legal consultant.

Partners at a number of top London-based international law firms have been warned to expect their compensation to drop as much as one-third this year, compared to 2008, the Evening Standard reported in January.

Related coverage:

ABAJournal.com: "Dewey Cuts 66 Partners’ Pay—By As Much as 80 Percent"

ABAJournal.com: "DLA Piper Will Cut Pay for Most Partners by 11.5 Percent"

ABAJournal.com: "McDermott Coffee Cutback Sends ‘Message of Desperation,’ Partner Says"

ABAJournal.com: "Partner Ousters Double or Triple the Pace of Two Years Ago, Consultant Says"

Comments

1.

B. McLeod
Mar 24, 2009 2:21 PM CST

Kind of reminds me of that number Sweeny Todd sings to his razor, in the most recent movie adaptation of the story.

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2.

Debra Veoli
Mar 27, 2009 5:58 AM CST

It will be time for the in-house clods to start bashing us again.

We need to pay the bills also,  and we have to work hard to get our work done and your work, too. 

Now I have to go back to work.  The inhouse guys won’t even start calling for another 90 minutes.
We do ALL the work for you that you do not want to do, or that has to get done at the LAST minute.

We should be paid for doing that work, but no, the in-house guy is saying we are charging to much.

That is NOT fair to us.  Now we have to cut our salarys because of all of this.

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3.

steve
Mar 27, 2009 6:33 AM CST

I miss ELLEN’s posts.

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4.

B. McLeod
Mar 27, 2009 7:24 AM CST

DEBRA is channeling.  She may be Ellen’s SISTER.

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5.

Bill Dickey
Mar 27, 2009 8:34 AM CST

I agree with these posters.  There is a lot of scrutiny of our billings by oafs in-house who really don’t know what we do and certainly can’t do what we do.

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6.

Blaine
Mar 27, 2009 9:42 AM CST

I spent 18 years as an Associate and then a Partner at BigLaw firms.  I know what you do and how you do it.  I also know that the rate structure and salaries are way out of whack at many law firms.  Associates making over $200K and charging over $300 per hour aren’t worth it.  I can and have hired 25 year plus attorneys who were Partners at BigLaw firms for less than $300 per hour and they have actually tried some cases.  Sorry, but no sympathy from me for Partners or Associates making less money.  The honeymoon is over—get back to reality.

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7.

MJS
Mar 27, 2009 10:11 AM CST

Where are my boys from Hildebrandt on this one?  Those s.o.b.‘s advocate cutting associates’ salaries like it’s nobody’s business.  As an imminent associate, I strongly advocate Hildebrandt’s advocacy of partner reductions.

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8.

Brian Kaser
Mar 27, 2009 11:53 AM CST

Private lawyers compete in an open market.  Those who do work that is lower down the specialized-to-commodity pyramid have more competition.  Those in-house lawyers are your clients, so whether they know what you do or not, they can choose where to buy services.  Part of good client relationships is contact that’s frequent enough to keep the client up with what you do, how you do it, and why it adds value to their business.  I do not have one corporate counsel client who I would consider an oaf.  Or even half an oaf.  And even half an oaf is better than none, in this economy.

Remember:  Keep your shoes shined.

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9.

Brian Kaser
Mar 27, 2009 12:02 PM CST

Afterthought:  Could those namecallers in the prior posts really be using their own names to deride their corporate clients?  I see more layoffs coming, if that’s the case…

BAK

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