Gloomy BigLaw Outlook: Lower Salaries, Fewer Hires, More Job Cuts
Law firm layoffs of nearly 800 people made big news yesterday, but those left behind will also face gloomy times.
The financial crisis is likely to bring associate pay cuts, lower starting salaries and more layoffs at many large law firms, according to the American Lawyer. “The market for labor has changed and, for now at least, there’s no normal to which it can return,” the story says.
Starting associate pay now stands at $160,000 at large firms; the publication wonders if the figure could drop to $130,000 or even $100,000. And the story points out that pay cuts for those with more experience could save jobs and allow firms to lower billing rates. The savings from a $40,000 pay cut, for example, spread across 500 nonequity partners and associates, would be almost double the amount saved by laying off 50 associates, the story says.
The news is also bad for law students, according to the article, which predicts firms will delay starting dates for new hires and sharply reduce the number of summer associates they hire.
“It’s just your mother’s rule applied to hiring: Don’t put more on your plate than you need,” the article says, explaining why fewer law students are likely to be hired. “A class of 10, say, handpicked from Stanford, NYU, Harvard, Georgetown, UCLA, Emory, Northwestern, Columbia, Michigan and Fordham, is likely to maintain the partners’ self-esteem without jeopardizing the firm’s economics in September 2011.”
Topics: Career & Practice
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