Prior reports indicated that LA's Allen Matkins had cut first-year salaries to $145,000, and McGuireWoods to $144,000. WolfBlock of Philadelphia, before it dissolved, was among several firms that instituted pay cuts for associates, while others froze salaries as they reacted to the slowing economy.
Now the Legal Intelligencer reports that, in Philadelphia at least, firms might be frighteningly close to slashing incoming associates' pay levels, if just one of them would be brave enough to be the first. One partner told the Intelligencer that he could see salaries drop to $100,000 "in a nanosecond," but that his firm wouldn't be the daring one that tried it first.
- Consultant Peter Zeughauser, in the Recorder piece reporting the Allen Matkins cuts: the top 10 to 15 firms would "never" do this, but the next tier of BigLaw firms might just end up slashing associate pay after exhausting other options.
- ABA Journal: when it happens, this move will probably go hand-in-hand with the dismantling of lockstep compensation structures and the move to merit-based compensation.
- WSJ Law Blog: the whole discussion is "ridiculous," though not because the Journal cares deeply about the financial well-being of the average associate, but because it apparently can't wait to see what would happen: "Why shouldn't the first [firm] to jump be applauded for having the fortitude, confidence and business savvy to go first?"
- Blackbook Legal Blog: "We told you so."
So where does this leave the average 2L or junior associate? Law students with BigLaw aspirations could take Peter Zeughauser's advice and make sure to get an offer from an elite firm that wouldn't dare be seen underpaying its newest attorneys. Or they can pray that no major firm is brave (stupid?) enough to go first, or that others won't follow.
Current associates should take note of the pay cuts and freezes already implemented, and hope that no such fate befalls their firms -- though pay cuts are generally better than layoffs.
Either way, it's time for everyone to grab a financial-aid calculator and start figuring out just how much longer it's going to take to repay those loans.