Phila. law firms follow trend, cut salaries

Amid ongoing upheaval in the legal market, Schnader Harrison Segal & Lewis L.L.P. said yesterday that it was cutting salaries for associate lawyers at the firm by $10,000 a year.

Firm chairman Ralph Wellington said partners had agreed to a 5 percent pay cut as well, and administrative staff with salaries of more than $60,000 a year would see their income reduced from 3 to 5 percent.

In making the announcement, Schnader Harrison follows the moves of other law firms around the country that have reduced associate salaries. Firms also have delayed the starting dates of first-year lawyers, reduced the number of summer interns, or instituted other cost-cutting measures.

Wellington said the 200-lawyer firm is on budget and that the cost-cutting moves were prompted by industry-wide trends toward reductions in associate salaries. Those salaries had soared in the early part of this decade, prompting complaints from clients and concerns that the salary hikes were unsustainable. Wellington characterized revenues this year as stable and said the firm remains on budget.

"It is really driven by the restructuring of associate compensation in the industry," Wellington said of the salary reductions. "It is because the industry has been adjusting associate compensation and making it more performance-based, which is sensible."

Wellington said that partners at the firm decided that if the associates were going to take a pay cut, they should as well. Associate salaries at Schnader, a Center City law firm, range from $125,000 to $156,000 a year.

Other firms with large Philadelphia offices, including Ballard Spahr Andrews & Ingersoll L.L.P. and Reed Smith L.L.P. also have cut the salaries of their more junior lawyers.