Legal News

BigLaw Gloom, In Hopes of Avoiding Doom: Morgan Cuts 2010 Program

By Amir Efrati

The BigLaw blogosphere has been abuzz since yesterday afternoon, when Morgan Lewis, a law firm with more than 1,400 lawyers — and among the biggest revenue-earners in the nation — announced that it was scrapping its 2010 summer associate program. For those summer associates currently at Morgan, the firm will make job offers that start in the fall of 2011.

The firm also said it was changing the way associates would be paid by eliminating lockstep compensation “in favor of a system more closely tied to performance, experience, and competency.” That move mirrors other firms, including Squire Sanders and Orrick.

My, how things change quickly in a recession. Just two months ago, the firm told AmLaw Daily that it was poised to recruit a 2010 summer associate class.

“We’re running our own business and focusing relentlessly on client relationships,” said Francis M. Milone, chair of the firm, in a statement yesterday. “Doing so responsibly means continuing to reduce expenses, committing to the people in whom we are already invested, and looking at compensation across the board to ensure our structure matches the reality the entire legal industry must face.” (Here’s a story from AmLaw Daily. The news was first reported by ATL.)

We checked in with law firm consultant Peter Zeughauser, who called the Morgan Lewis move “a smart thing to do” to ensure long-term survival.

Meanwhile, other big firms including Nixon Peabody and Bryan Cave are cutting associate salaries. Those moves are “frankly overdue for the rest of the big firms,” including those based in New York, Zeughauser said.

Many firms are trying to avoid making such changes, but except for a handful of firms that aren’t hurting, such as those with booming litigation practices, he expects the rest of BigLaw to fall in line by the end of this quarter.

Full post as published by Law Blog - WSJ.com on July 15, 2009 (boomark / email).