Legal News

DLA Piper Latest Big Firm to Slash Partner Draws

By Ashby Jones

Law-firm partnership just ain’t what it used to be. Once upon a time, BigLaw equity partners could bank on ever-growing payouts year after year, and the best job security outside of government work. But oh how times have changed.

DLA Piper was the latest big firm to take a hatchet to its partner pay. On Friday, it informed all of its U.S. partners that it will reduce pay for most of them by 11.5 percent in 2009. Click here for the article, from the Recorder.

According to the article, the cuts are not related to the firm’s 2008 revenues, which was up over 2007. The problem is 2009: The firm projects revenue will decline 7 percent in 2009 and profits will drop 6 percent, said U.S. Managing Partner J. Terence O’Malley in an interview with the Recorder.

“We are very pleased with how we are performing relative to the competition, but it’s a tough economic environment,” O’Malley said. “We are conservatively budgeting this year to be a down year.”

It’s not the first move the firm has made to shore up its financial situation. In November, the firm said it would ask its 275 income partners to contribute capital. O’Malley said the move was a way for it to reduce its reliance on banks.

Nor is DLA the first firm to acknowledge cuts in partner payouts. Earlier this month, Dewey & LeBoeuf said it had cut partner compensation for one-fifth of its 350 partners over the last 15 months, some by as much as 80 percent, to weed out low performers.

Full post as published by Law Blog - WSJ.com on March 23, 2009 (boomark / email).