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Historically, BigLaw associate salaries have only known one direction: up, up, and away. That’s history. The 2007 stampede to match Simpson’s $160K brinksmanship created a whole cadre of 20-something JDs who earned more money than federal district judges. The unsustainability of this trend is increasingly obvious. Many firms are taking heretofore unheard-of steps—such as deferred start dates for recruits and stipends for lawyers who volunteer to spend a year on community service projects—to avoid the PR damage inflicted by outright layoffs. Yet every day brings another wave of layoff news and firms are now beginning to conduct second rounds of significant cuts. Even partners are no longer off-limits, as White & Case affirmed this week. And of course, salary freezes have become so commonplace, that a new taxonomy has emerged to describe them.
Now, McGuireWoods has become the anti-Simpson Thacher and cut first-year associate salaries by 10%, down to $144,000. (In Baltimore, Richmond and other smaller markets, McGuireWoods cut first-year pay to $130,500 from $145,000.) McGuireWoods, which had already instituted a salary freeze, acknowledged that it is seeking to avoid the inevitable resentment and morale problems that would arise if second-year associates found themselves making same amount of money as clueless first-years.
For a healthy dose of perspective on this state of affairs, I highly recommend reading this offer letter that the Wall Street firm Carter Ledyard sent an aspiring associate back in 1907. (via Ernie the Attorney)
- posted by brian
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