Kilpatrick Townsend & Stockton is instituting pay reductions for all lawyers and staff, while furloughing some employees who can’t work remotely, in anticipation of further economic fallout from the coronavirus pandemic.
Kilpatrick has temporarily cut partner draws by an average of 10%, effective April 7, and it will reduce pay by 5% for other lawyers and staff as of April 16, the Atlanta-based firm told the Daily Report in a statement. Secretaries, who are hourly employees, will have their work time reduced by 20% as of April 20.
“We have decided to take some proactive steps to adjust our expenses that we feel are prudent under these circumstances,” Kilpatrick said in the statement. “On the financial front, we are a fiscally conservative firm that is well-positioned to work our way through this challenging time.”
Kilpatrick is making the cash-conserving pay reductions after a healthy fiscal performance in 2019 that the 640-lawyer firm said extended through the first quarter of this year. “We had a very strong first quarter and were running at full speed before the pandemic,” it said in the statement.
“We, like most if not all law firms, anticipate that our revenues will decrease as a result of the economic turmoil that the COVID-19 global health crisis is causing. Our goal is to find the best way to build a bridge over the anticipated economic downturn and come out strong on the other side,” the firm’s statement said.
Kilpatrick said it does not plan to make any layoffs at this time. However, the firm is furloughing a “small number” of office support employees who cannot work remotely. The firm will continue to provide benefits to the furloughed employees, including medical and dental, and it will assist them with obtaining government benefits.
The firm also is taking steps to help its employees weather the crisis. It is establishing a hardship fund for employees who may need additional assistance and offering the option of reduced hours for “anyone having challenges working a full schedule in a remote-working environment,” the statement said.
In 2019, Kilpatrick reported a 6.3% revenue increase to $478.82 million and an 8.7% jump in net income to $136.37 million.
The firm’s chairman, J. Henry Walker IV, told the Daily Report in a February interview that the profit increase exceeded budget by 20%. The gains boosted the firm’s average profit per equity partner by 9.7% to $1,229,000.
“As we move forward, we remain focused on the health and safety of our workforce and actively managing through this challenging time to find the best way forward for our firm,” the firm’s statement said.
“We’re inspired by the efforts of our lawyers and professional staff, which continue to work together to successfully and seamlessly serve client needs as they have for more than 160 years.”