All of the conversation during the political campaigns about employer sponsored health care seems to have raised employee awareness of the benefit. Traditionally, employees undervalue the benefit of health insurance because it doesn’t show up on their W-2. Now would be a good time to remind employees of its value. As a benchmark, the average U.S. employer pays $3,785 of a total $4,479 single cost and $8,824 of a total $12,105 family cost of health insurance (according to the Kaiser Family Foundation). 

Serendipitously, law firm employees may have fared better than corporate employees in maintaining the value of their self-directed pension plans during the current stock market crisis. A study published early this year by a major broker-dealer showed that employees investing their pension funds without the aid of a financial advisor are more likely to invest their assets in “low yield, ultra safe instruments like CD’s and money market accounts.” The report also noted that law firm employees also tended to have less stock in their investments because, unlike their corporate counterparts, they are not offered shares of stock of their companies. By default, many corporate employees’ defined contribution plans are heavily invested in their company’s stock. 

An informal survey of law firm HR Directors and Administrators tells us that lawyers seem to have racked up larger losses than staff members because they tend to have smaller pension accounts and because they tend to be more conservative in their investment choices.

Salary surveys tells us that base salary increases (what are often termed “cost of living” increases) are expected to average 3.86 percent for 2009 compared to 3.93 percent last year. The survey, prepared by Culpepper Compensation, a compensation consulting firm, shows significant differences in compensation increases by country. In Latin America and Asia-Pacific the increases tend to be significantly higher (Venezuela – 19.78%, Sri Lanka – 16.56%, Ukraine – 15.44%) than the U.S. and more developed countries (Switzerland – 3.47%, Japan – 3.52%).

This survey was taken in August, before the full global economic situation was known. We discussed these results with a number of law firm HR Directors and COO’s, and there was strong belief that, if a major turn-around does not occur in the U.S. economy by year end, it is likely that actual increases will be substantially lower, perhaps zero.

As a side note, it is interesting to note that the Culpepper survey also showed a continuing trend away from salary increases on the anniversary of hire date. Currently 80 percent of firms adjust salaries on a common date – the most common (25%) of respondents being January first.

There is a significant difference between British and U.S. law firms when it comes to cost cutting. London City firms seem to be generally canceling holiday parties or dramatically scaling them back according to various law firm associates’ blogs. We have not heard of wholesale cutbacks on festivities among U.S. firms but we are getting wind of some interesting areas of frugality, including:

§ Several New York firms have placed a near bane on any reimbursable expenditure that can’t be charged back to a client.

§ A suggestion by the managing partner at a firm-wide associate meeting that when attending a deposition or meeting at another law firm, everyone should use a legal pad and pen supplied by that firm and take it with them when they leave. 

§ The elimination of bottled water in conference rooms.

§ A Washington firm that has placed a limitation on expenditures for lunch at internal meetings to $5 per participant.