DLA Piper informed all of its U.S. partners on Friday that it will reduce pay for most of them by 11.5 percent in 2009, while strong performers will get more money.
The firm projects revenue will decline 7 percent in 2009 and profits will drop 6 percent, said U.S. Managing Partner J. Terence O’Malley in an interview with The Recorder. The move applies only to its U.S. operations, which count 1,380 lawyers.
“We are very pleased with how we are performing relative to the competition, but it’s a tough economic environment,” O’Malley said.
“We are conservatively budgeting this year to be a down year.”
DLA’s pay cut is part of an annual budget projection process and is not related to the firm’s 2008 results. The firm ended 2008 with zero debt and will end 2009 with zero debt, said O’Malley.
As opposed to 2008, when the economic downturn was not full blown until the fourth quarter, firms are preparing for four quarters of dried-up demand in 2009.
Legal consultants say most firms expect profits and revenues to drop this year as a result.
For 2008, DLA reported revenue per lawyer was up 2.8 percent, with profits per equity partner up 6.4 percent, to $1.3 million.
In November, the firm said it would ask its 275 income partners to contribute capital.