November 1, 2005
More Complex 401(k) Plans
Most law firm 401(k) plans offer participants a limited number of investment options. The prevailing wisdom has been that simplicity increases staff participation and limits the firm’s fiduciary liability. Recently, however, larger law firms are moving toward more complex options through brokerage and mutual-fund windows.
These windows permit participants to invest in a wider range of stocks, bonds and mutual funds outside the plan’s standard investment options. Generally, they work like normal brokerage accounts except that they can only be funded by transferring money from a 401(k) plan. The advantage for participants is greater flexibility in managing their retirement savings. The downside is that most plans pass on the broker set up and transaction fees to the participant and unsophisticated investors could deplete significant portions of their accounts in commission payments.
There are no statistics on law firms but, overall, 16 percent of 401(k) plans offer a self-directed brokerage account, However, in plans where the option is offered, only 2 percent of the total assets are invested in these accounts. The experience of law firms has been greater use of the account, due to the greater sophistication of the participants. Dykema Gossett, a Detroit based 370 lawyer firm that has been offering the option for five years, has 9 percent of its assets invested in self-directed investments. Maternity Leave Cutbacks
Maternity leave may be a recruiting differentiation in favor of law firms. Corporate employers are cutting back on full pay for maternity leave at the same time that many law firms are increasing their maternity benefits. A survey of 1,092 employers, set for release, shows just 18% offer full pay during maternity leave, down from 27% in 1998.
This parallels a slight decline in another 2005 survey, a Society for Human Resource Management poll of 386 human-resource managers, showing 17% of those employers offer paid maternity leave, down from 19% in 2001. The change appears to be in response to rising employer costs of healthcare benefits. However, companies aren't backing away from paid maternity leave -- 64% offer partial pay to new mothers, up from 60% in 1998 -- but they are giving themselves more latitude on how much to pay: 19% say maternity-leave compensation "depends on the situation," up from 13% in 1998. Freedom to Blog?
In the UK, a controversial website, that lampoons Magic Circle firms, rollonfriday.com, has begun a trend of law firm associates and staff members creating blog sites to criticize their employers and clients. The problem appears to be that people spend so much time on the web doing legitimate work for their firms, that the line between work and personal life becomes blurred. David Kaufman, an attorney, HR expert and author of Blogs@Work (coauthored with Deborah Weinstein), suggests that employers amend the provisions of their employment manuals to prohibit postings that include confidential client or firm information that could be considered harassment of clients, vendors or fellow employees. IP Associate Salaries
The 2005 NALP survey is out and generally there are no surprises. Starting salaries for associates in the top markets stayed pretty well stable at $125,000; associates in large cities make proportionately more than those in smaller cities and staff attorneys average $88,000 annually. The survey does quantify the premium that firms are paying for IP associates at between $15,000 for newly admitted attorneys to the patent bar to $30,000 for senior associates. The survey also notes that 74% of over-100 attorney law firms provide bonuses as a normal part of their compensation package. Legal Resource Group LLC specializes in serving the executive and administrative recruiting needs of law firms. We maintain the largest data base of law firm executive and Administrative staff in the world. This allows us to immediately identify the very best candidates. We find the best people, complete searches faster and have extremely reasonable fees. For further information, visit our website at www.LRGLLC.com , contact us by e-mail at inquiries@LRGLLC.com or by phone at 1-800-688-4147.
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