Legally Speaking - Legal Recruiter Blog

No, I’m not talking about the candy we loved as children.  I’m talking about money – something we could all use more of these days.  As the legal arena wraps its head around this recession, a number of national firms have frozen salaries for 2009.  It doesn’t take a Rhodes scholar to see the reasoning behind that action.  One firm reasoned that freezing salaries would put them in a better position to offer bonuses at year end.  Hence the question “Now or Later?”  In today’s economy, would an associate rather get a $10,000 increase in salary over the course of the year (to better pay for ever-rising household expenses such as medical care, heating/cooling and food) or take a chance on still being with the firm at the end of the year for a possible bonus that could be significantly more than that amount?

In light of the “tighten your belts” counsel which has graced the lips of a myriad of popular economists, most of us are now quite risk averse, so I’m not certain a bonus a whole year from now would make associates feel warm and fuzzy inside.  In most cases, bonuses are usually discretionary, so it’s hard to pinpoint the exact benefit in this situation. Having said that, maybe it is a wise move to defer salary increases and reward those associates who go the extra mile in 2009.  After all, if the news on the economy continues to get worse before it gets better, the number of associates on the firm payroll at year’s end may be significantly fewer than current numbers.  If you were a betting man/woman, which would you give up?