Latham & Watkins has reversed the salary freeze it introduced in December 2008, a sign that the worst may be over for the US firm.
Last February Latham announced 440 layoffs after its profit per equity partner for 2008 dropped from $2.27m (£1.56m) to $1.8m (£1.24m). Both events underlined the necessity of the US firm’s decision to freeze salaries more than a year ago.
Now Latham has become one of the first firms to unfreeze salaries, a clear sign it believes market conditions are improving.
According to US blog abovethelaw.com, the thaw was announced in an e-mail from the firm’s executive committee yesterday.
Latham’s pay scale for 2010 starts at $160,000 for class of 2009 associates. It then progresses as follows: $170,000 for class of 2008; $185,000 for class of 2007; $210,000 for class of 2006; $230,000 for class of 2005; $250,000 for class of 2004; $265,000 for class of 2003; $280,000 for class of 2002.
Colin Potter, a consultant at Global Legal Search, said that despite last year’s layoffs Latham is still widely considered as one of the better US firms in terms of how it treated its associates.
“This seems in keeping with those good relations,” Potter added. “Hopefully they’re reversing what they did because things genuinely are getting better.”
Latham is also thought to be considering paying its associates the money they lost because of the salary freeze.