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Nixon Peabody LLP has shaved $15,000 off of salaries for its first year associates in an effort to reduce expenses, the law firm confirmed this week.

In a memo to staff, firm managing partner and CEO Richard F. Langan said first year salaries will be reduced to $145,000, down from $160,000, for firm associates. The firm also has made performance-based salary cuts for current associates and has introduced a new bonus structure.

Up until this year big law firms have felt pressure to keep first-year associate salaries level with those at competitor firms.

Nixon Peabody, which has about 170 lawyers in Boston and a total of 720 lawyers, is the first major Boston firm to announce such a pay reduction, but is among several national law firms that have recently made the decision to reduce first year salaries.

Other firms that have cut first-year salaries in recent weeks include Robinson & Cole LLP, which has 200 lawyers nationally and 50 in Massachusetts, and McKenna Long & Aldridge, a Washington, D.C., firm.

Langan said in his memo, “Nixon Peabody LLP has taken measures over the past several months to review its cost of doing business while keeping its commitment to providing extraordinary client service. To maintain staffing levels in the best interest of our clients, we have decided to reduce starting compensation levels for incoming associates and summer associates to $145,000 in major financial centers with related reductions in associate compensation throughout the firm’s U.S. operations.”

The “major financial” centers the memo refers to reportedly include Boston, New York, Washington, D.C., Chicago and California, according to Abovethelaw.com. Other regions will see smaller pay decreases, corresponding to lower salary levels.

Langan’s memo continued, “Additionally, we have made downward adjustments to the base pay of our current associates based on their individual performance and contribution to our firm. Along with this change in compensation, associates will be eligible for a new bonus program, based on the firm’s financial performance, which will reward top performing associates who make extraordinary contributions to the firm. With our new bonus program and strong firm culture, we expect to attract and retain the best and brightest talent for many years to come. Through this innovative approach to associate compensation, along with a wide range of innovative pricing arrangements to meet the varied needs of our clients, we are able to continue to provide our clients with the highest level of service and lower cost practical solutions in order to meet their business needs in this challenging economic climate. We appreciate our associates’ understanding and commitment to our firm and its future.”


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