San Francisco-based Pillsbury Winthrop has sliced $10,000 (£7,000) off its salary for first year associates
The move comes as Bay Area firms fight the technology slowdown through a variety of cost-cutting initiatives. This year, the firm's new associates will receive an annual salary of $125,000 (£87,500), down from $135,000 (£94,500). Pillsbury's stance on remuneration mirrors similar decisions by local rivals Gray Cary Ware & Freidenrich and Brobeck Phleger & Harrison. Earlier this month, Gray Cary axed 46 associates and lowered first year salaries to $125,000. Brobeck froze first and second year salaries at $135,000, but has not yet resorted to laying lawyers off, although 82 accepted the firm's offer of unpaid leave. Pillsbury is understood to have taken steps to reduce salaries to $125,000 because that figure is the prevailing market rate for first year associates. Lower salaries will to some extent be balanced out by an increased bonus rate. The 2,100-hour bonus for first years has been upped from $5000 (£3,500) to $10,000. A spokesperson for the firm said that salaries and bonuses for associates above the first year level are currently being reviewed. Last year's merger between San Francisco's Pillsbury Madison & Sutro and New York's Winthrop Stimson Putnam & Roberts created a firmwide revenue of $445m (£311.6m). The Lawyer reported that, among Bay Area firms, Pillsbury had surged up the rankings to third place, behind Morrison & Foerster and Brobeck (21 January 2002). Despite this comparably strong performance, net income fell by about 5 per cent when viewed against the combined income of the two firms in 2000. Cutting salaries follows Pillsbury's November decision to lay off 20 associates from its New York and Silicon Valley offices.