Staff “Catch-up” Raises Some firms have been using the up-turn in their economics during 2004 to justify large raises among select senior administrative staff members. It seems that a number of firms severely limited raises for staff members during the 2001-2003 recessionary years. During the same period there was fairly high attrition among administrators and managers. Frequently the replacement hires came into firms at salary levels well above what their predecessors were earning. The result is some large salary gaps, particularly between the CFO and CIO positions who are often pegged at roughly the same salary level. Most Executive Directors who have worked their way though this problem recommend complete candor with the staff members involved and corrections programmed to coordinate pay over several years.
Part-time Attorneys In our last issue, we reported that several clients had questioned the accuracy of a NALP survey showing that more that 96% of law firms permit part-time schedules. To test this we did our own unscientific survey of 362 large U.S. law firms. Our results confirmed the NALP study – in fact, 100% of the 82 responding firms indicated that they permit attorneys to work on less than a full-time basis. We found some additional interesting information:
87% of responding firms place limits on the permitted use of part-time status but only 3% limit use to family situations, e.g., child or parental care.
60% of firms had a policy limitation on eligibility criteria for part-time status including a limit to the number of attorneys who can be on part-time status at one time (10%), the length of time with the firm (typically one to two years), and the limit of part-time status as being “no less than 70% of full-time.” The most common limitation is that an associate must have a history of satisfactory performance.
46% have no limit on the duration of part-time status. 15% have a specific limitation (typically one to two years) and 38% prescribe limits on a case-by-case basis.
All firms responding consider associate part-time status as credible time for partnership consideration but 80% count it as less than full credit (most firms prorate time by the percentage of reduced hours). 91% anticipate that an associate could be made a partner while on part-time status.
75% of firms determine the compensation of part-time associates by a pro-rated reduction in salary, 17% use a variety of compensation methods and decide the exact method on a case-by-case basis, and 8% pay on a formula based on production.
Among part-time partners, 47% are paid a prorated amount of their normal share of profits, 14% are paid on a formula based on production, 3% are paid a fixed salary and with 36% the compensation is negotiated with the partner on a case-by-case basis.
53% of firms see demand among their attorneys for part-time practice increasing. 47% see it staying the same and none anticipate a decrease in demand.
Finally, we received a lot of subjective comments about part-time attorneys from respondents. The comments were almost equally divided with half being highly supportive of part-time policies as an important means of retaining top talent. The other half feared that the over availability of part-time opportunities would encourage greater usage. This was viewed as destructive to the law firm business model that has been professionally successful and highly profitable for many years.
Pensions More Highly Valued Younger workers, especially highly educated and professional employees, have traditionally placed lower value on pension benefits than insurance benefits and time-off. Some benefit consultants, however, are predicting that the continuing political debates about the solvency of social security are having an impact on younger workers. The “Echo Generation” (children of Boomers) is apparently much more conservative and are expected to hold items such as 401(k) matches in much higher esteem than GenX’ers.
Late First Year Associate Salary Increases After announcing that they are holding the line on first year associate salaries, we have seen a number of firms bumping salaries at the end of the year. Although the increases are primarily in New York and Philadelphia and average $10,000, if previous history is a predictor, firms in other cities will follow suit early in 2005.
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