Andrew Blum, media relations manager at Chadbourne & Parke, has confirmed that the firm will be cutting the base salaries of all non-partner attorneys, administrative personnel and other staff for the rest of the year, starting with the May pay period. He says the firm informed its employees in an e-mail memo earlier today.
Blum says the cuts were necessary because “the current global recession is proving to be longer and more severe than most had forecast."
Blum would not disclose the amount by which salaries would be reduced, and would not comment other than to say that it would affect only Chadbourne’s U.S. offices.
Last month, the firm laid off 25 associates and counsel across its 13 offices worldwide. In he e-mail sent out to the firm, Chadbourne’s management committee says, “We are hopeful that this action will avoid the need for additional reductions in our work force.”
Here is the firmwide memo announcing the cuts:
As we all know, the current global recession is proving to be longer and more severe than most had forecast. Many businesses have been severely impacted and have taken steps to reduce expenditures which are many times more draconian than those which law firms generally have taken and which we, in particular, have had to implement.
The steps we have taken to date to reduce expenditures have been done reluctantly, particularly those involving personnel reductions, but have been necessary to align our resources to the demand for our services. In view of the continuing global economic uncertainty, we believe we must plan based upon the assumption that the current conditions will not reverse dramatically before year-end.
We have not reduced personnel to the extent that some of the law firms which are experiencing the same decline in demand have, nor do we want to. We have great talented people at Chadbourne and we believe that further significant reductions would be counter productive for both the Firm and our clients.
That said, as a matter of prudence, we do need to reduce expenditures further. Accordingly, we will be instituting a reduction in salaries in our U.S. offices. We are hopeful that this action will avoid the need for additional reductions in our work force.
We will be reducing base salaries of attorneys, administrative personnel and other staff for the remainder of the year, beginning with the May pay period. All personnel will be advised of the reduction to their salary. Depending upon Firm financial performance and individual effort and contribution, all personnel will be eligible to recoup all or part of the amount of the reduction in the form of a bonus to be distributed at the same time discretionary bonuses have been traditionally distributed.
Some may say we are being overly cautious in aligning our expenditures based on the assumption of no significant increase in demand through the year-end. Perhaps so, but it is our belief that it is better to be conservative. If we are wrong, and we hope we will be, we can rectify the situation by the payment of bonuses.
We are also taking measures to reduce expenditures in our international offices. The measures taken in those offices will vary in some cases from what we are doing in the U.S. offices, taking into account local market conditions, requirements and circumstances.
We thank you all for your efforts in these challenging times.