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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]My firm (20-30 range) has a global town hall today.  Partners didn't get a draw this quarter and I'm thinking this will be layoffs, but I'm stupidly optimistic they'll start with paycuts.  [/quote]

Update: partner comp reduced by 20% for first half of year, hiring freeze, summer program will get dialed back (but not canceled), no salary reductions for associates or staff.  Caveat re: layoffs/pay reductions - this is the absolute last resort; don't want to get there, but we really don't know how long this will last or how bad it will get so no blanket promise to never do so.  [/quote]

At the very least, reviews are going to get a lot tougher and there will be more “performance” terminations.  No one wants to be the one to admit to Latham-ing associates, although Latham sure seems to have survived just fine.[/quote]

What is "Latham-ing" an associate?[/quote]

It’s when a firm lays off associates due to financial constraints or to boost profits but tells the associates fired that it was due to their poor performance. Done by most big firms. [/quote]

Ah, okay. I'm not in the law profession myself but have plenty of friends who are, including a partner at Latham, so I was just curious.

Sounds about right from what I do know about big law![/quote]

Large law firms have devolved into a horrible cesspool. They need to follow a more corporate model and hire fewer people with a view to have them stay. Charge reasonable rates. Pay associates far less. Allow for more job security. Should devalue billable hours and value good work and team building etc.  The accounting firms are like this. Big law can do it. [/quote]

You aren’t wrong. The high associate salaries lead to high hours requirements and high rates and no tolerance for a dip in performance. [/quote]

Haven't read the whole thread, but had to respond this post.

The current BIGLAW model evolved over the past 100+ years with the rise of corporations from the industrial revolution.  Yet even before that, lawyers would often hire young "clerks," burn them out or they leave to start their own firms, then hire a new crop of fresh clerks.  This model works well for law firm partners, [b]but not for clients[/b].  [b]We will only see a change to the corporate model if clients demand it. [/b] Since only the largest clients generate continuous legal work, the ones with intermittent work won't care because all they're interested in is solving their immediate problem, then letting their in-house counsel handle the day-to-day work.

I'm sure folks will disagree with some or all of the foregoing, but that's not the larger point here.  The OP was interested in pay cuts, which are happening, as they have happened before, and as they will again.  Law firm partners are not altruistic and never will be if they can simply hire just-as-smart and cheaper talent when times get better (which they can).  The real solution is for the number of law schools to shrink along with the number of law school graduates.  But because law schools are cash cows for universities (i.e. they pay for the 17th century Central African dance department), this won't happen.  The ABA won't shrink the number either, because it's dependent on the fees paid by universities to get accredited or keep their programs accredited (and the more lawyers there are, the more ABA members).

Not asked by the OP, but still important, is what should a young BIGLAW associate do today to avoid getting hosed down the line?  Bill 50-100 hours over the minimum, then spend the rest of your time learning the ins and outs of the "business" of law.  How to get clients should be at the top of this list (hint: it is about good service, but that's only a small part of it - anyone can provide good service).  Never bill crazy hours and expect gratitude from the partners down the line.  They've gotten their profit off you, so why should they give you any more of it?  After not sharing enough times, they know you'll grow bitter, so it will be time to find someone new and "eager".  Put simply, start thinking like a partner (owner) rather than an employee.  If you don't, that's all you'll ever be.[/quote]

All your points make sense, but I still do not understand if the model is bad for clients, why clients do not demand a change?  [/quote]

I’m no PP. but I think the clients were already demanding a change. They constantly ask for reductions in bills. They want top product with low rates. [/quote]

Now more than ever with little-to-no money coming in the door.  Those companies who do have money know that they have leverage to demand lower rates and are doing so.  Rates crept up over the past 10 years at a pace that far exceeded inflation.  Firms aren't going to cut rates because they expect the economy to bounce back, but they are offering to discount rates temporarily and cut already-billed hours.[/quote]

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