In the Trenches: Experts - Lower Associate Pay is Here to Stay

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Associate compensation cuts are part of 'fundamental reset' after two decades of steady growth in law firms.

Fifty-five percent of participants in an online seminar on associate compensation last week believe associate salary cuts are temporary.

But the two Altman Weil consultants presenting the webinar said lower salaries are here to stay. They are part of a “fundamental and profound reset” after two decades of “steady, sometimes spectacular growth” for the legal profession, said Pamela H. Woldow, who advises firms on getting work from in-house legal departments.

Altman Weil's Oct. 27 program, called “Leverage, Lockstep and the Changing Associate Model,” was for law firm clients.

Altman's James D. Cotterman, who advises firms on compensation, said associate pay did not drop enough in the recent round of cuts at the nation's big law firms, which included Atlanta's largest firms.

Cutting pay from $160,000 to $145,000 was only “about half of what was needed,” said Cotterman. The starting salary at big firms in New York, Washington and Los Angeles was $160,000 before the pay reductions that started last spring.

Cotterman said a $15,000 cut does not make a significant difference in “changing the value equation to clients.”

“They probably should have set pay back a decade, to 1998. That's what I was expecting,” he said. “This story may not be over yet.”

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Pamela Woldow, Legal Leadership | Attorney Advertising

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