The Big Four auditor is the latest to take steps to protect itself financially.PwC Legal Arm Takes a Hit as Firm Freezes Pay, Promotions and Bonuses
The firm is the second of the Big Four to announce measures to stem the economic impact of the coronavirus and the latest in a series of similar announcements among professional services firms.
April 06, 2020 at 05:09 AM
3 minute read
PwC's legal arm has been hit by the Big Four auditor's move to freeze promotions, pay rises and bonuses across its whole U.K. business, days after KPMG took similar action firmwide.
The move is the latest to attempt to lessen the financial impact of the COVID-19 pandemic last week when it made the announcement.
Kevin Ellis, chairman and senior partner of PwC UK, said in a message to staff last week: "I want to reassure you that we will use the power of our partnership to do all we can to protect your jobs and salary security, which means asking the partners to accept the financial impact of this."
One person with knowledge of the situation said that meant senior people at the business have taken, or will take, pay cuts. The firm did not comment on that.
According to a spokesperson for the firm, PwC's performance year normally runs until March 31 and cannot be completed as normal due to COVID-19.
The spokesperson said PwC has extended it by three months until 30 June, which means that discussions on reward and promotions will take place in the autumn rather than in the summer.
News of the move follows comments by PwC Global Legal Services head Tony O'Malley that the coronavirus crisis is driving a "flight to quality" among buyers of legal services—a move that will further strengthen the legal arms of the Big Four accounting firms.
He said: "I'm feeling positive about how we're placed over this next period in the crisis and I'm confident that we're going to come out of it stronger."
The auditor's legal arm has more than 3,500 lawyers in 90 countries and immigration law services in 116 countries.
Another Big Four firm, KMPG, last week said equity partners across the entire firm have agreed to forego a partner distribution payment due in mid-April. It added that over the four months beginning in May they will take an effective pay reduction of 36%.
Several firms have made attempts to mitigate the financial impact the outbreak is likely to cause. In March, Allen & Overy called for partners to contribute capital into the firm in an effort to face the disruption caused by the virus. Norton Rose Fulbright has offered staff reduced working hours and pay for one year, as well as deferring the payment of partner distributions, staff salary rises and bonuses for both groups.
Dentons, meanwhile, is considering cutting partner and fee-earner pay across its European and Middle East offices. Its regional board is set to meet this week to discuss the measure.
|Read More:
The London Lawyer Briefing: The Week Fear Became Reality
Five Financing Options for Law Firms in Challenging Times
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