Holland & Knight has frozen associate salaries as part of an ongoing cost-saving process and a more radical shake-up of its compensation system
Associates will not proceed automatically to the next salary step when they move up a 'class'. Deputy managing partner Robert Rhodes said that all remuneration issues, including salaries, billable hours and bonuses, were under review. The management should have determined a new structure by April and implemented the changes by the summer. Rhodes said: "We've ann-ounced a temporary suspension of our step-up increases as part of a reassessment of our associate compensation. We know a lot of firms have gone away from lockstep to a more flexible system. We need the breathing space to take a full look at our situation." The impact of the decision will be felt most strongly by longer-standing associates. For those graduating from first to second-year class, the differential in salary is just $1,000 (£700). Further up, the increase that new sixth-year associates could have expected is $9,000 (£6,400). This year they will go without and remain on a base rate of around $125,000 (£88,300). Rhodes denied that it was intended to prompt resignations and so reduce associate numbers. "I know they were disappointed they didn't get an immediate increase," he said. "But we're not using this as a device to cull anybody." Holland & Knight partners had previously taken steps to ensure that associates would still receive bonuses by cutting their own bonus payments by between 6 and 10 per cent (The Lawyer, 4 March).