Biglaw Firm Slashes Salaries Of Associates Who Aren’t Busy Enough

money price cut LF RFEarlier this week, Above the Law began receiving whispers about Steptoe & Johnson, a firm ranked 99th on the most recent Am Law 100, with $421,994,000 in gross revenue. Tipsters were sharing that salaries were being cut for associates below an 80 percent utilization.

That is definitely an interesting development. The rumors quickly spread to Reddit, where eagle-eyed observers noted that back in January, when the firm announced raises to the then-top-of-market Milbank scale, the memo included this detail about those not billing at maximum capacity:

We will encourage associates who are consistently under budget to move to a reduced work schedule to make sure that compensation and work effort are equitable and aligned.

So, is that what’s happening? Those the firm considers underutilized are getting prodded by the firm? Above the Law reached out to Steptoe, and it seems it’s a mixed bag at the firm.

The good news, for those billing at optimum utilization, as of July 1, the firm is moving to the full Cravath scale. That means fourth-year and more senior associates are getting a raise. But for those under the firm’s “utilization expectation,” they’ve been moved to “reduced utilization budgets and prorated compensation.” So, the tipsters are correct — salaries are being cut for some associates. At year end, the firm will again assess utilization and compensation accordingly.

The full statement from the firm is below:

“In January, we laid out our vision for Steptoe for 2022 and beyond. Part of that vision is maintaining and strengthening our high-performance culture, growing our talent, and enhancing the success of our clients.

“We have raised base salaries for associates in our US offices, for the second time this year, effective July 1. These increased salaries are consistent with our high-performance expectations. It is important that our associate compensation scale allows us to retain and compete for the best talent.

“We also announced in January that we would be matching associates who are consistently under budget with reduced work schedules to make sure that compensation and work effort are equitable and aligned. Over the course of the past few days we’ve contacted every US associate to inform each of them of salary changes and their utilization expectations. A small number of associates will be moving to reduced utilization budgets and prorated compensation through the end of the 2022, at the July 1 scale. At year end, we will review again associate utilization and performance and expect to continue to reward our high performers.

“We are committed to always acting in a way which is consistent with our vision and culture and to doing our best to develop every associate so that they can achieve their full career potential. We are confident these changes will help us achieve those goals.”

July 1 compensation scale

Class Year Prior Salary New Salary
2021 $215,000 $215,000
2020 $225,000 $225,000
2019 $250,000 $250,000
2018 $285,000 $295,000
2017 $325,000 $345,000
2016 $350,000 $370,000
2015 $370,000 $400,000
2014 $385,000 $415,000

This story proves the invaluable import of the ATL tipster network. We depend on your tips to stay on top of important compensation updates, so when your firm makes a compensation move, please text us (646-820-8477) or email us (subject line: “[Firm Name] Matches”). Please include the memo if available. You can take a photo of the memo and send it via text or email if you don’t want to forward the original PDF or Word file.

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Kathryn Rubino is a Senior Editor at Above the Law, host of The Jabot podcast, and co-host of Thinking Like A Lawyer. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1,


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