Legal News

Does Latham Salary Freeze Signal Start of a Legal Ice Age?

By Dan Slater

At this point in the current crisis, the possibility of layoffs and bonus reductions are fully ingrained in the collective consciousness of BigLaw associate-dom. But, hey, some may have thought, so long as we have our jobs we’ll at least have our lock-step increases for base salaries.

Not so fast, youngster. With recent news out of Latham & Watkins — the firm that last year came in second behind Skadden with $2.01 billion in gross revenues — that assumption is also now in doubt. Latham & Watkins said yesterday it will freeze associate salaries in response to “challenging economic times.” Here’s a story from the Recorder, and a blog post from Above the Law.

“Everybody’s been waiting for some kind of signal from the market leader,” consultant Peter Zeughauser, founder of The Zeughauser Group, told the Recorder. “This will be a profound signal to the market about what to do.”

“All associates moving to the next class year on January 1, 2009, will continue to receive the same base compensation as they received in 2008,” Latham Chairman Robert Dell said in a statement released by the firm. Most associates would have seen their pay go up by $10,000 to $25,000 on Jan. 1, depending on their class. Now, both first- and second-years will receive $160,000 in 2009, notes the Recorder.

Photo: iStockPhoto

Full post as published by Law Blog - WSJ.com on December 17, 2008 (boomark / email).