Greenberg Traurig Freezes Equity Partner Pay, Cites Cost-Conscious Clients
Equity partners at Greenberg Traurig won’t be getting an immediate pay raise because of a $10 million shortfall in year-end collections, driven in part by clients who want legal bills reduced.
A memo from chief executive officer Cesar Alvarez said the salaries would remain “at present levels until we get a better financial picture for 2008,” the Daily Business Review reports. Alvarez told the Daily Business Review that the firm is taking a cautious approach, a tactic that helped it weather past recessions.
The blog Above the Law first broke the news, posting two internal memos, one announcing the freeze and a second clarifying that it does not affect associates. The first memo said an increasing number of clients are asking for adjustments to hourly rates or bills and refusing to allow inexperienced lawyers to work on their cases.
The memo cited factors affecting the legal industry, including “a slowing economy, tighter credit markets that make transactions more difficult, a troubled housing market, a high level of consumer debt (over 50 percent of our economy is based on consumer spending), high gas prices, and significant cost pressures in the economy and by our clients.”
“The legal industry and our firm began to see the impact of these factors in late 2007,” the memo said. “In addition, costs in the legal industry, including our firm, continue to go up at levels that, in our opinion, are not sustainable. We can not control the legal industry, but we can control what we do in our firm.”