Snell & Wilmer Takes Slice Off Top Of Associate Pay

By Anne Urda

Law360, New York (June 22, 2009) -- Following in the footsteps of dozens of other law firms, Snell & Wilmer LLP has decided to slash associate salaries by 10 percent as the Phoenix-based outfit continues to grapple with market-based realities.

On Monday, a representative from Snell & Wilmer confirmed that the firm had decided to reduce associate salaries by 10 percent across the board.

The firm held a meeting on June 16 with the associates to notify them of the salary changes, which will be reflected in the associates' July 15 paycheck, according to the firm representative.

Despite the cutbacks, Snell & Wilmer does intend to pay performance-based bonuses later this year, the representative said.

Snell & Wilmer also told legal tabloid Above The Law that unlike many other firms, it did not freeze associate salaries in 2008, thereby hopefully lessening the hit that associates will experience now.

With the announcement, Snell & Wilmer becomes the latest in a long line of firms to take this step, with Kilpatrick Stockton LLP revealing earlier this month that it will also be reducing associate salaries by 10 percent, effective July 1.

The starting salary for new U.S. associates at Kilpatrick Stockton is also being cut from $145,000 to $130,000 in Atlanta and North Carolina, and from $160,000 to $145,000 in New York and Washington, and for associates in the patent practice.

The measure is necessary to adapt to changes in the economy and the decline in demand for certain legal services, said Diane Prucino, co-managing partner of Kilpatrick Stockton.

“The firm remains strong in this challenging and volatile business environment,” Prucino said. “There is an intense commitment to enhancing the firm's first-rate, innovative and cost-effective client service. With these goals in mind, Kilpatrick Stockton is dedicated to continuing to identify strategic growth opportunities to expand our world-class firm and improve our competitive position in the marketplace.”

Over the past few months, more and more firms have begun exploring salary cuts as a way to survive the economic crunch, with nearly two dozen firms instituting some kind of pay reduction.

In May, Sonnenschein Nath & Rosenthal LLP announced that the first-year base associate salary would be downgraded to $145,000, while Reed Smith LLP revealed a 10 percent associate salary cut, with the incoming crop of first-year attorneys potentially taking a bigger hit.

Also last month, DLA Piper reduced its base associate compensation in its major markets to $145,000, citing the effects of the grim economy in the legal industry, and saying the pay cuts would provide the firm with flexibility and additional competitive strength.

McDermott Will & Emery LLP recently decided to scale back summer associate pay, revealing that it will be based on a $135,000 scale rather than the $160,000 framework that has dominated in recent years, due to the dismal economic outlook.

Nixon Peabody LLP and Gardere Wynne Sewell LLP recently opted for the salary reduction to $145,000 for first-years. Chadbourne & Parke LLP said that it would reduce salaries for attorneys, administrative personnel and other staff for the remainder of 2009.

Drinker Biddle & Reath LLP took perhaps the most dramatic step so far in that realm, slashing associate salaries in mid-May to $105,000 and insisting that the young attorneys enter a six-month intensive training program.

The multipronged training program is meant to make associates more valuable to clients and educate young lawyers in traditional legal skills and clients' backgrounds, firm representatives said at the time.

In mid-April, Davis Wright Tremaine LLP embraced a 5 percent cut to associate salaries the same day that Womble Carlyle Sandridge & Rice PLLC announced a 10 percent cut and McKenna Long & Aldridge LLP chopped $20,000 off starting associates' salaries.

Other firms, including Latham & Watkins LLP, Orrick Herrington & Sutcliffe LLP and Sheppard Mullin Richter & Hampton LLP, have frozen salaries firmwide.

--Additional reporting by Jacqueline Bell and Erin Marie Daly