Reed Smith Cuts Associate Pay 10%; New Hires Could Take Bigger Hit
Posted May 20, 2009 1:05 PM CDT
By Debra Cassens Weiss
Associates at Reed Smith will be seeing an across-the board 10 percent pay cut beginning July 1.
The law firm says in an internal memo that global economic conditions, changing client demands “and the competitive landscape in the legal industry” have already forced reductions in partner pay. “Sound business operations” now require the associate pay cuts, it says.
Law school graduates could take an even bigger hit. Salaries for new lawyers will be—at a minimum—10 percent lower than current levels. The associate bonus program, however, will not be changed in 2009, and "we will use it to continue to reward strong performance," the memo says.
Above the Law was the first to publish the memo, and law firm spokeswoman Jamie Lisa Moss confirmed the news.
Overseas associates will fare better. Associates in Europe and the Middle East will have their salaries frozen, while associates in Asia won’t be affected. New associates in the United Kingdom, however, will start at a pay level that is about 10 percent lower.
Eugene Tillman, Reed Smith's global head of legal personnel, said in a statement provided to the ABA Journal that the actions announced today supplement other changes in operations made to ensure the law firm's financial health. "Managing our single largest expense, lawyer compensation, is a matter of prudent business given the current economic climate," he said.
Reed Smith laid off 26 attorneys and 74 staff members in March, and about 115 support staff in its U.S. offices in December.
Above the Law says its own informal count shows less than 20 large law firms have cut associate pay. DLA Piper announced associate pay cuts earlier this week. DLA has since revised its plan. It now calls for across-the-board cuts of 10 percent for all associates, rather than cuts made on a case-by-case basis, the National Law Journal reports.
Updated at 1:20 p.m. to clarify Tillman's title.