If there were any wannabee lawyers or junior lawyers that were labouring under the illusion that 2010 was going to a cracker compared to the turmoil of 2008 and 09, bear this in mind.

Associate Pay Cuts Here to Stay, Say Firms, Analysts

A growing number of managing partners and management consultants say recent cuts to associate compensation aren’t a temporary phenomenon. And a few see an even more significant correction to entry-level lawyer salaries coming in the year ahead. (Am Law Daily )

Ok so the Am Law Daily is an American publication and it is referring to US firms in this piece but that is not a good reason to dismiss it entirely. US firms offer some of the biggest salaries in the City and changes that happen in the US legal market often affect which way the wind blows here. Not forgetting that salary freezes and bonus cuts have already been a part of the picture over here – most recent was Slaughters which opted to cut associate bonuses in half from 10% of salary to 5% whilst continuing with a salary freeze until the end of this year. Added to which there is little reason why the pendulum will swing back any time soon:

“We don’t view this as a temporary adjustment,” says Eugene Tillman, the firm’s [Reed Smith] global head of legal personnel. “This is a fundamental reset.”

“I lean much more in the direction that this is not a blip,” says Dewey’s [Dewey & LeBoeuf] Davis. “In the medium term, we’re seeing, and will continue to see, a paradigm shift” in associate compensation.

A crap economy, changing compensation structures and an even more competitive environment for junior lawyers is not going to conspire to improve their bargaining power when it comes to compensation. But if levels of compensation are the main concern then at least that’s better than the alternative.