In the latest play by a law firm to soften the blows from a spiraling economy, Latham & Watkins is freezing associate pay. Above the Law broke the news less than an hour ago. Legal Times got a hold of the following e-mail which was sent to Latham’s associates:
To: All Associates
From: The Executive Committee
Subject: Associate Compensation
The world economy is experiencing unforeseen and unprecedented dislocations. Our clients are feeling those impacts and the legal community is not immune. The Executive Committee has spent the last few weeks discussing these critical issues in the context of planning for 2009. While we anticipate that the diversity of our practices and global reach will serve us well in the year to come, it seems clear that the global economy will continue to be challenged at least through 2009. As a result, we are modifying associate compensation as part of a prudent business strategy.
Effective January 1, 2009, associates moving to the next class year will continue to receive the same base compensation as they received in 2008. Please do not hesitate to contact your local Associates Committee members if you have any questions about the resulting salary scales.
We expect as a general matter to continue to reward outstanding performances through our merit-based bonus pool. As in previous years, we will announce bonuses in late January.
We are confident that by continuing to work together we will be well positioned to succeed in the face of the economic challenges that lie ahead.
We thank each of you for your many contributions to the firm.
Latham chairman and managing partner Robert Dell has released the following statement confirming that the firm is freezing first-year associate pay:
"We are modifying associate compensation as part of a prudent business strategy in the face of challenging economic times. 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. We are confident that our business strategy, our diverse practices and our strong global platform will serve our clients and our firm well as we all face the challenges of a difficult business environment in 2009.”
Latham’s first and second year associates will now all make $160,000 in base compensation. The rest of the associate pay scale looks like this:
Third Year- $170,000
Fourth Year- $185,000
Fifth Year- $210,000
Sixth Year- $230,000
Seventh Year- $250,000
Eighth Year- $265,000