Squire Sanders Cuts 32, Slashes Associate Pay

By Jessica Dye

Law360, New York (May 01, 2009) -- Squire Sanders & Dempsey LLP on Friday cut 32 attorneys from its global practice and cut first-year associates' pay by 10 percent, following a growing trend of major firms setting more frugal limits in staffing and salary in order to withstand financial pressures.

Squire Sanders confirmed a report by the Cleveland Plain Dealer that new hires were some of the hardest hit, with many of the 32 pink slips going to associates with fewer than three years' experience at the firm.

At least seven of the associates being let go in this round of layoffs came from the firm's flagship office in Cleveland.

Even if they were spared by the layoffs, new hires will be asked to take a 10 percent cut in their first-year salary, the firm confirmed. New associates will now received $117,000 a year, down from $130,000.

A Squire Sanders spokesman was unable to confirm what other offices would see staff cuts.

The firm's hiring chairman, Timothy Sheerhan, told Crain's Cleveland Business that seven of the 32 cuts would come from its Columbus, Ohio, office.

He said that offices in China, the Slovak Republic, Venezuela, Hong Kong, Ukraine, the U.K., Russia, Poland and the Dominican Republic would also be affected.

Sheerhan also told Crain's that Squire Sanders was planning to postpone new-hire start dates until January 2010.

The layoffs only constituted a percentage of the firm's staff, which includes 410 associates and 433 partners in 32 offices around the world, according to the firm.

This isn't the first time this year Squire Sanders has taken the ax to its staff in an effort to reduce costs.

Squire Sanders laid off about 30 attorneys and staff members in November and cut additional positions in late January.

In October, rumors began circulating about preliminary merger chatter between Squire Sanders and Seyfarth Shaw LLP. However, no tie-up ever came of the talks.

The cuts reflected a decline in business for the firm, whose clients are making their own cuts to deal with financial pressures, Sheerhan told the Plain Dealer.

Squire Sanders is among a growing number of large firms reducing pay for associates.

Linklaters LLP announced Thursday it was planning to drop pay for new associates in its London office from its 2008 level, £66,600 ($98,600), to roughly £61,500 ($91,000) in 2009, according to Bloomberg.

Fellow Magic Circle firms Clifford Chance LLP and Freshfields Bruckhaus Deringer LLP recently froze pay for associates and instituted a salary cut for incoming attorneys.

Nixon Peabody LLP also decided recently to reduce compensation for new associates, dropping starting salaries for both incoming and summer associates to $145,000 "in major financial centers," according to a statement from Richard F. Langan Jr., the firm's managing partner and CEO.

Chadbourne & Parke LLP has also revealed plans to make cuts to the salaries of associates and others in an attempt to avoid any further reductions to its work force.

--Additional reporting by Pete Brush, Anne Urda and Evan Weinberger