No Longer a 'Prep School,' Ballard Spahr Plans New Pay Model After Earlier Layoffs
Ballard Spahr Andrews & Ingersoll has learned some lessons from a disappointing period in which profits per equity partner plummeted from about $545,000, in 2007, to $415,000, in 2008.
Among them: It was time to stop running the Philadelphia-based national law firm like a “prep school” and do some housecleaning for the first time in 30 years, firm chairman Arthur Makadon tells the Legal Intelligencer in an article reprinted by New York Lawyer (reg. req.).
Since the beginning of last year, the firm has cut 170 support staff positions, many of them in the latter part of last year, Makadon says, and has also terminated some lawyers, including partners, for what the legal publication describes as “a mix of performance and economic issues.” Because of overall growth, however, the firm’s attorney roster increased from 487 to 515 in 2008.
Meanwhile, the firm has eliminated income partners, restructuring to a one-tier equity partner track in which all partners apparently are paid a share of firm profits, according to the article. Makadon also says Ballard Spahr is working on a new structure for compensating associates and other employees that will focus on merit rather than seniority.
He attributes the firm’s “very unsatisfactory” financial performance in 2008 to its acquisition that year of a 30-attorney intellectual property boutique in Atlanta, a dismal economy in which its real estate and public financing practices suffered and a lack of “housecleaning” in previous decades.
Forecasting a sunny financial future and making an apparent reference to recent news reports about partner pay cuts at Philadelphia-based Dechert, Makadon adds: “While I regret that we are not in a position to have our highest-paid partners give up millions in income, I can assure our highest-paid partners—who are grossly underpaid by reference to at least one firm’s standards—that they will do much better in 2009 than in 2008.”
Related coverage:
ABAJournal.com: “Dechert Chairman’s Pay Cut Is Not $1M, Spokeswoman Says”
ABAJournal.com (2008): “Ballard Spahr to Acquire Atlanta IP Boutique”
ABAJournal.com: “Layoffs at Philly-Based Law Firms”
ABAJournal.com: “‘Meganumbers’ Pay for Lawyers Is On the Wane, Recruiter Says”
ABAJournal.com: “Sweeping Sonnenschein Pay Plan Eliminates Lockstep, Offers ‘Flexibility’”
