2009 IN REVIEW Key trends: Big firms place freeze on salaries

Lawyers have long enjoyed healthy year-on-year salary increases, however 2009 saw a change in fortunes with the advent of the global financial crisis. <tbo

Promoted by Lawyers Weekly 14 December 2009 Big Law
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Lawyers have long enjoyed healthy year-on-year salary increases, however 2009 saw a change in fortunes with the advent of the global financial crisis.

All but one of the big six law firms implemented salary freezes and battened down the payroll hatches to contain costs.

Robert Milliner, chief executive partner of Mallesons Stephen Jaques, said that the firm froze salaries on 1 July 2009 following a nine-month review of market conditions. The salary freeze will be subject to a review at 31 December, dependent on whether the firm is "tracking on or ahead of budget" for the year 09/10, according to Milliner.

Gareth Bennett, director of people and development for Freehills, said it also froze salaries following a review of business and economic conditions towards the end of 2008.

"Very early on, we looked at what we could do as a business to make ourselves as bulletproof as possible. After a significant amount of consultation, we made the decision to freeze salaries, with immediate effect, till July 2010," he said.

Allens Arthur Robinson also implemented an across-the-board salary freeze earlier in 2009, according to staff partner Ross Drinnan.

"There were a range of things we looked at," he said. "The decision went hand in hand with other measures to make sure that we were cautious about expenditure."

Clayton Utz also confirmed a salary freeze and Minter Ellison has said employees would not receive a pay rise in 2009, except for "exceptional performance".

The only large firm to continue with salary increases was Blake Dawson. Its deputy managing partner, Helen McKenzie, told Lawyers Weekly that about 30 per cent of its lawyers received a pay increase since 1 July 2009.

This figure, said McKenzie, factors in promotions (the average increase in lawyer numbers was about 6 per cent), but overall there had been an average drop of 10 to 12 per cent in compensation across the board when factoring in the firm's performance reward program against the backdrop of the economic downturn.

Other significant trends in the legal profession this year have included (click on link for a full examination of each trend):

>> Mid-tiers make their mark

>> Climate change on the horizon

>> The rise and rise of in-house

>> Speaking out about outsourcing

>> Too many city lawyers highlights rural shortage

>> Alternatives for billings methods gain momentum

>> The trend to business-minded lawyers

>> Mental health issues come to the fore

>> Workplace relations tug of war

>> Big firms place freeze on salaries

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