Major law firms adopted drastic measures to mitigate the economic effects of the coronavirus pandemic and recession. Some firms have rolled back their pay cuts. We will continue to update these events as the crisis continues.
Akerman implemented pay cuts and layoffs.
Chairman and CEO Scott Meyers said the Florida-founded Am Law 100 firm planned to “control costs by reducing compensation payments across all levels of the firm and resizing our workforce.” A spokesperson for the firm said in an April email that the workforce reduction affected less than 5% of the firm’s employees.
According to the firm, draws will be reduced by 12.5% on an annualized basis for most partners, of counsel and consultants, while some partners “with a different compensation arrangement” will see a 17.5% reduction in their draw on an annualized basis. Additionally, associate compensation will be reduced by 7.5%, staff with annual salaries of $150,000 or more will see a 7.5% pay reduction, and staff who make less than $150,000 annually will see a 5% reduction. All of those cuts are on an annualized basis as well.
Allen & Overy
Allen & Overy has called for partners to contribute capital as it takes measures to protect itself financially. The Magic Circle firm is holding a cash call and is gradually reducing its partner profit distributions, it confirmed March 31. It has also frozen its associate and support staff pay, meaning it will not undertake annual salary reviews due to take place in the first quarter of the forthcoming financial year. Meanwhile, bonuses due to be paid to fee-earners and senior support staff in July will be split into two payments. Half will be paid in July, while the remaining half will be paid in October. The firm, which has no debt, has also deferred certain recruitment and cancelled several events, a spokesperson said in a statement.
The Washington, D.C.-based firm made cost-cutting moves including 25% pay cuts for associates and staff and 60% reduction in equity partner distributions, according to Above the Law. In response to the economic slowdown, a firm spokesman said, Arent Fox made a “temporary pay cut for all attorneys, professionals and staff.”
On April 27, the firm announced it would impose temporary pay cuts for lawyers and staff making more than $70,000, but no layoffs or furloughs. According to a memo that managing partner John Martin sent to the firm, partners have agreed to compensation reductions “to absorb the bulk of the financial impact.” Also, for a three-month period beginning May 1, the firm will reduce salaries by 20% to 30% for counsel, based on their salary level, 20% for associates, and up to 25% for staff. The temporary pay cuts will not affect any employee making less than $70,000 a year.
Additionally, the firm deferred the start date for its incoming class of associates until 2021. In the meantime, according to the email, the firm will potentially award interim bonuses to exceptional contributors, based on both individual performance and economic and firm conditions.
The firm will defer the start of its 2020 summer program by at least a month. The firm expects to host an online summer training program and the firm will extend offers to all summer associates, contingent on maintaining strong academic performance.
In a July 29 internal email, Baker Botts managing partner John Martin announced that effective Sept. 1, the firm planned to restore 50% of the compensation reductions put into effect May 1. The firm also said it would pay interim bonuses for non-partner timekeepers who have made “exceptional contributions” for the May 1 to July 31 period.
Baker, Donelson, Bearman, Caldwell & Berkowitz
Baker Donelson has temporarily reduced draws and salaries for shareholders to weather the crisis. It announced April 1 it will make a further temporary pay cut firmwide. It will also furlough some employees “over the next few weeks,” according to a statement from the firm. A Baker Donelson spokesperson said in an email that the temporary salary reductions will be 20% across the board, and that the furloughs will affect “less than 4% of the firm’s overall workforce.”
Baker & Hostetler
The firm said May 7 that it is cutting compensation for lawyers and staff. Partners will see annual compensation cut by 15% to 20%, while associates and staff will see 10% cuts. The adjustments may remain in place for the duration of 2020. The firm added that it is not laying off any employees. The firm’s employees will not see their base compensation drop below a floor of $70,000 or $80,000, depending on the market. Administrative assistants and staff will also be given the option of working a reduced work schedule in lieu of the 10% salary cut. Additionally, the firm is cutting its summer associate program to four weeks, and will be holding it remotely. Compensation will be based on those four weeks that associates are employed by the firm.
Baker & McKenzie
Baker McKenzie said April 13 that it is reducing salaries for all non-partner attorneys, other timekeepers and business professionals by 15% in the United States. The salary reductions will not affect those earning less than $100,000, and no one will see their compensation reduced below that threshold. The firm said partners will also see cuts, though it did offer details other than to note that equity partners would see greater reductions than any others at the firm.
In Australia, Baker & McKenzie has so far made no cuts but instead has increased working flexibility for staff to help them manage their duties of caring for other members of their households, particularly for those with young children, given the closure of schools and day care centers and the demands of homeschooling. The voluntary options include the possibility of adjusted hours, reduced hours, and taking accrued carers or annual/long service leave.
Canadian attorneys, timekeepers and business professionals will see a 10% reduction in salary. The firm has one office in Toronto. Local policies and regulations prevent any reductions in Mexico, where the firm has five offices.
The firm is cutting pay for staff and salaried lawyers by 10% for those making between $75,000 and $250,000 annually, and by 15% for those making more than $250,000 annually, according to a firm spokesperson. Partner draws are being reduced by 20% to 25%, the spokesperson said. Staff and lawyers making less than $75,000 will not have their pay cut.
“We made the hard decision to enact painful but necessary cost-cutting measures now in the hopes that it will put the firm on better footing when things improve,” chairman Mark Stewart said. “We hope to avoid layoffs and to remain as busy as we have been, guiding our clients through this turmoil and back to normalcy as soon as possible.”
The firm cut staff, attorney and partner pay, ranging from at least a 25% cut in pay for equity partners to 15% pay cuts for staff and associates, to improve cash flow.
Blank Rome furloughed some staff, but has not done the same with any lawyers, the firm confirmed April 3. Additionally, on April 7, the firm confirmed in a statement that “We are instituting a temporary 15% compensation reduction throughout the entire law firm to be shared equally by our partners, associates, counsel, professional staff and assistants, and have temporarily furloughed a small number of staff, along with other operational expense-reduction measures.”
Bryan Cave Leighton Paisner
The 1,400-lawyer trans-Atlantic firm, in the coming months, is deferring “portions of partner distributions as a first line of defense,” according to an April 8 statement from the firm’s leaders. Bryan Cave Leighton Paisner is also seeking pay cuts by 15% “for all employees across all offices” for a 13-week period starting in May. Employees making less than $40,000 will not see a cut.
In June, the firm reduced the salaries of its London-based newly-qualified lawyers by 2.5%. The firm also furloughed some of its paralegals and legal personal assistants.
On July 15, Law.com reported that Bryan Cave planned to cut lawyer and staff positions across the firm while shutting its small Beijing base, which houses one partner and two associates. While the firm would not confirm the number of layoffs globally, 40 people in London, including 14 fee earners and 26 business services staff, were affected. However, the pay cuts the firm implemented earlier in the year will be lowered to only 7.5%, but will last for the rest of the year. The new pay cut will run from August until the end of 2020, according to a firm statement.
Buchanan Ingersoll & Rooney
CEO Joseph Dougherty said in a statement that Buchanan has temporarily adjusted compensation across all levels and furloughed “a very limited number of administrative staff” with plans to bring them back “when the pandemic subsides.”
Cadwalader, Wickersham & Taft
Cadwalader said in a March 31 firm memo that it would stop paying partners, cut associate salaries by 25% and impose pay cuts of 10% to 25% on its staff in response to the coronavirus crisis and its impact on the economy.
In a July 29 firm memo, managing partner Patrick Quinn said, effective Aug. 1, the firm planned to reverse the 25% and 10% compensation reductions for associates, special counsel, counsel, senior attorneys, staff attorneys, paralegals and administrative staff going forward. “The return to full compensation levels will begin with your first August paycheck,” he wrote. The firm confirmed that partner distributions will also return to normal.
Cahill Gordon & Reindel
The New York firm said April 7 it was suspending its summer associate program but will offer jobs upon graduation in 2021 to would-be participants and still pay the 30 summer associates “in full for the summer.” Cahill’s statement said it would give the class a chance to assist remotely with the firm’s pro bono work over the summer, and if risks abate enough to make in-person work possible, it would “find appropriate ways” to resume the program for “some portion of the summer.”
Clark Hill, based in Detroit, has instituted cost-saving measures including a pay reduction for attorneys and staff, a freeze on discretionary spending and a revision of certain benefits, according to a statement provided April 2 by the firm. The firm also furloughed some employees.
“We hope that this will be a temporary measure, and anticipate that as we emerge from this period of global health and economic crisis, we will be able to revisit these difficult decisions,” a spokesperson said in the statement.
Australian law firm Clayton Utz has instituted a hiring freeze and will consider reducing employee hours if economic conditions worsen.
The firm had asked equity partners to defer a portion of their compensation to the end of the year, between 10% and 20%, according to CEO Michael Heller. The firm furloughed less than 5% of its administrative staff whose jobs could not be performed remotely. According to Heller, those employees will still have their benefits covered by the firm, and will eventually receive 100% of their compensation through the CARES Act. He said the firm was aiming to avoid doing any layoffs or cutting pay for lawyers and staff.
In a May 13 statement, the firm said it furloughed an additional 5% of its administrative staff until July 31, “given what now seems like a slow and methodical transition back to an office working environment throughout the summer and in light of reduced needs for administrative support while working remotely.” The statement added that Cozen O’Connor will pay 100% of those employees’ health benefits throughout that time, and will allow them to keep their PTO. “We do not anticipate additional furloughs,” the firm said.
In a July email, Heller said, as of July 1, the firm is once again paying partners fully. However, Heller did not return a message seeking additional comment about the status of the furloughed employees.
Crowell & Moring
The firm said April 15 that it is cutting pay for lawyers and some professional staff by 5% to 25%. Philip Inglima, the firm’s chair, said equity partners will take a 25% compensation cut, income partners will take a 20% cut, and associates and counsel will take a 15% cut. Staff making more than $100,000—about a third of the firm’s staff—also will have their pay reduced 5% to 20%, he said. He said the reductions were temporary and the firm expects to lift them by the end of the year, depending on the impact of the pandemic.
Curtis, Mallet-Prevost, Colt & Mosle
The firm slashed associate salaries by 25%, Above the Law reported April 1. A Curtis spokesman said in an email to Law.com that the firm “is taking some steps similar to those reported by other firms in response to COVID-19.”
Davidoff Hutcher & Citron
The New York City-based midsize law firm filed a WARN notice that said the coronavirus’s impact had forced it to lay off 34 people. Jeffrey Citron, a co-managing partner at the firm, said the firm laid off its secretarial and back-office staff, calling the move “purely preventative” and likening it to “playing defense” in an Apr. 14 phone call. He said the firm hopes to rehire the employees when circumstances improve.
“It was very difficult to have the secretaries working, not being in the office,” he said. While the firm’s attorneys “all have laptops, and most of the attorneys are computer-literate,” he said, it was harder to adapt the work of support staff to the pandemic’s restrictions.
Davis & Gilbert
This midsize NYC law firm is cutting pay for partners, associates and staff. For a number of partners, the firm is substantially reducing the base draw amounts so that all partners now have the same base draw amount. The firm is also temporarily limiting partner distributions to 75% of that base amount. And it plans to defer the mid-summer distribution when partners would typically receive an advance against their year-end profit allocations.
Salaries for associates, senior attorneys and counsel have been reduced by 15%. Staff and manager salaries for those earning over $150,000 per year have been cut by 15%; and the firm is reducing salaries for those earning between $70,000 and $150,000 by 10%. All salary cuts are effective May 4. Salaries below $70,000 per year will not be adjusted.
Davis Wright Tremaine
The firm is taking a number of measures, including reducing quarterly equity partner distributions with the expectation that total equity partner compensation will be at least 25% below budget for 2020. For salaried lawyers and staff, pay will be reduced beginning May 1 through the end of the year. The cuts will be 15% for contract partners; 12% for associates, counsel and of counsel; 15% for C-level executives; and 6-10% for staff based on salary level, with no reduction below $60,000.
About 8% of staff will be furloughed “ to adjust for workflows that have been disrupted or diminished due to reduced demand,” and a small number of staff will see their schedules reduced. These staff will continue to receive benefits from the firm.
The firm is shortening its summer associate program to six weeks and conducting it remotely, and has not yet decided whether to change the start date for first-year associates this fall.
Additionally, the firm is starting a partner-funded “employee fund to provide monetary relief to staff members who suffer financial hardship as a result of the pandemic” to help them with household expenses. And it created a vacation bank, where employees may donate unused vacation time for others who need it to attend to medical emergencies or family care.
In an April 8 statement, managing partner Tom Goldberg said the firm cut pay by 15% for all attorneys and some staff and for other staff has temporarily reduced to 60% normal working hours and pay during the remote working period. The firm also made “significant reductions to partner draws” and suspended a scheduled April supplemental distribution. Goldberg said the firm implemented the measures “to maintain our financial stability during this time while continuing to effectively serve our clients.”
Compensation reductions, which will go into effect on May 1, will apply to all partners, attorneys and staff earning at least $60,000. Partners will bear the brunt of the impact, with cuts starting at 20% and extending “much higher” for the firm’s most highly compensated partners. For employees, including associates and counsel, as well as other timekeepers and business services staff, cuts will be progressive, starting at 0% for those earning under $60,000 and hitting 20% for those earning over $190,000. Individual high performers, whether lawyers, professionals or business services staff, will be eligible to recover some or all of these cuts as bonuses depending on the firm’s 2020 performance. A total of 41 business services staff, many of who are unable to perform their jobs remotely, will be furloughed starting May 1 for 90 days. The firm said it will pay all health care premiums, including the employee portion, for this interval.
The firm said in a statement: “Our leadership has developed a tiered contingency plan for the potential of reduced revenues. This plan entails reducing discretionary spending, implementing an approximately 3% reduction in workforce, canceling our summer program yet providing everyone in that summer class an offer, and deferring our fall incoming class of associates to January.”
Dorsey & Whitney
The Minneapolis-based law firm said April 8 it is capping the value of its monthly equity partner distributions and has furloughed less than 4% of its 1,100-plus workforce. The firm is also cutting its contributions to its employees’ retirement plans by 33%. Meanwhile, Dorsey has instructed its employees to keep a close track of the amount of money they’re spending. The firm said it will “reevaluate its measures from time-to-time and is intent on limiting disruptions to its workforce as much as possible.”
The Philadelphia-based Am Law 200 firm said April 9 that it intends to defer this month’s distributions to equity partners. A spokesperson for the firm also said it has furloughed “a limited number of administrative employees who cannot effectively work remotely,” but that it intends to recall them to their jobs as soon as the firm can reopen its offices. “The employees will retain their medical insurance fully paid by Duane Morris,” the firm said.
On April 14, the firm informed associates and special counsel that their base salaries would be temporarily reduced by 15% beginning May 1 through the end of the year, a source said. In an updated statement April 16, the firm said it also reduced targeted year-end equity partner compensation by 25%, and nonequity partner compensation by 20%. It acknowledged the 15% paycut for associates, special counsel and staff who make more than $100,000 annually, and said retirement plan contributions have been suspended for all personnel through the end of 2020.
The firm announced to its personnel on May 6 that it is reducing compensation for U.S. lawyers and staff by 10% on average and furloughing about 40 staff members. The firm is deferring the start date for its first-year associate class from the fall to January 2021. The firm will host a shortened, remote summer associate program for its roughly 20 U.S. law students, starting in July, and it plans to make job offers to all of them for fall 2021. Equity partners “will be leading the way” in compensation reductions, said the firm’s U.S. co-chair, Mark Wasserman because if revenue declines, so will their distributions. (The firm compensates its equity partners through profit distributions alone and does not pay them draws.)
Faegre Drinker Biddle & Reath
The firm—the product of a Feb. 1 merger between Minneapolis-based Faegre Baker Daniels and Philadelphia’s Drinker Biddle & Reath—said April 14 that it had deferred its equity partner distributions by one-third for the second quarter in an effort to be “prudent and conservative” during the ongoing COVID-19 pandemic.
According to a statement May 13, the firm also implemented a temporary pay reduction of 15% for all other lawyers, which it announced in mid-April and which took effect May 1. Pay for professional consultants and staff has also been reduced on a graduated schedule for those making $50,000 or more annually maxing out at a 15% cut. The firm also said it furloughed about 1.5% of its personnel, many of whom have office-based responsibilities. Those employees will continue to receive their benefits.
The firm has also made some layoffs, which it attributed to redundancies created in the Feb. 1 merger. The eliminated staff positions represent 1.5% of total head count, and those affected were provided with severance packages, the firm said.
Finnegan, Henderson, Farabow, Garrett & Dunner
The firm announced pay cuts on May 14 for lawyers and staff that will take effect June 1. “Share partners will shoulder much of the resulting financial effects,” a firm statement said. All other lawyers and staff earning $75,000 or more will have pay reduced by 10% to 20%. Specifically, Finnegan is making 20% salary cuts for those earning $150,000 or more, 15% salary cuts for those earning between $100,000 and $150,000, and 10% salary cuts for those earning $75,000 to $100,000. Those earning under $75,000 will not see reductions in pay, according to the firm’s statement.
Fried, Frank, Harris, Shriver & Jacobson
The firm is offering voluntary buyouts for staff. It’s still not engaging in any mandatory measures, and attorneys are untouched, a spokeswoman said in June. But staffers will be able to avail themselves of buyouts. Those who opt in will receive one week of salary for every year of service at the firm, capped at 24 weeks, plus $1,000 for each year.
Fisher & Phillips
The labor and employment firm has temporarily cut pay for all lawyers and staff while furloughing some employees who can’t work remotely, said the firm’s chairman, Roger Quillen, in an April 10 interview. Quillen said that the Atlanta-headquartered firm proactively wants “to ensure solid financial footing for the firm throughout the COVID-19 crisis and the related economic fallout.”
The firm notified law students that it would cancel its summer associate program, because of the “uncertainty and challenges” of the COVID-19 pandemic.
The Philadelphia-based Am Law 100 firm said a tiered salary reduction of 10% to 15% for all attorneys and staff will take effect in May, for those earning $100,000 or more annually. There will be no pay cuts for attorneys and staff who make less than that amount. Equity partners made a special capital contribution and are reducing their monthly draws in tiers, between 10% and 20%, also beginning in May.
Additionally, the firm said, the summer associate program will be shortened and first-year associates will begin employment in January 2021. The firm said it is not currently planning or undertaking any staff or lawyer layoffs or furloughs.
Freshfields Bruckhaus Deringer
Freshfields has suspended its latest quarterly partner distribution. The firm will not pay any distribution to partners for the three months to April and is freezing pay for its lawyers as well as delaying a decision on what bonus levels will be. The firm’s bonus levels are usually decided in April but will now be reviewed in September. In addition, the firm is looking into flexible working arrangements and offering reduced hours for people who are interested. The measures are global but will differ depending on the region. The firm is trying to remain financially flexible so that it will not need to lay off or furlough staff.
Gilbert + Tobin
Gilbert + Tobin has cut back partner drawings by 50%.
Managing partner Richard Cohen said on March 23 that the firm made an unspecified number of layoffs, “largely … those whose responsibilities would be unessential or moot in the current work environment.” He said the firm has provided severance but said it hopes to rehire once the situation improves.
The firm said in a statement April 10 that it recently reviewed the performance and size of its global operations team—its own term for professional staff. “As a result of our analysis, we made the difficult decision to ask a limited number of our global operations team members to leave the firm. We are providing severance packages, based on tenure, to impacted employees,” the firm said. It also noted that it will continue contributing to health care benefits for these employees through the end of September.
Additionally, Goodwin’s summer associate program will now be conducted remotely and consist of five paid weeks instead of the usual 10.
The Florida-based Am Law 200 firm confirmed April 15 that it laid off five attorneys and 40 staff members, and cut staff salaries across the board. Greenspoon co-founders Gerry Greenspoon and Michael Marder said in a statement that the cuts were preemptive measures taken to offset an expected loss of revenue due to the coronavirus pandemic.
The firm is cutting compensation for all U.S. attorneys earning over $100,000 annually, the firm said on May 6. The cuts, which go into effect on June 1, include reductions to equity partners’ monthly draws by 15% to 25%. Equity partners will also defer half of any profits from the first quarter, ordinarily paid in August, to December. Nonequity partners will see base compensation reduced by 15%, which would amount to an annual salary cut of 8.75% if the change stays in effect for the entire year. Most nonpartner attorneys at the firm, including all associates, will receive a 10% salary cut, akin to 6% over the full year, while the most highly compensated counsel and specialists will face 15% cuts, as will all senior counsel. Attorneys currently earning less than $100,000 will be unaffected.
Hogan Lovells announced April 16 that it will be reducing the length of its U.S. summer associate program from 10 weeks to four, though it will pay summers for eight weeks. The firm is also spreading partner distributions and bonuses initially scheduled for May over the coming months instead. Instead of distributing partner compensation based on the firm’s 2019 performance at the start of May, the firm will instead spread payments equally over each month depending on the amount owed to each partner.
All second-year summer associates will receive job offers following their graduation in 2021, while first-year summer associates will be invited to take part in the firm’s summer 2021 student program. Hogan Lovells is also delaying the start date for U.S. first-year associates from October 2020 to January 2021 in response to most state bar exams being shifted from the summer to the fall.
Holland & Hart
The Denver-based firm implemented compensation cuts at the start of June. These included reductions to equity partner distributions that exceed the 15% cuts for all non-equity salaried attorneys. Staffers earning over $100,000 are subject to 7.5% cuts, while those earning over $60,000 are receiving 5% cuts. The firm may dial back these reductions at any point based on its financial performance, a firm spokeswoman said.
Holland & Knight
In a statement May 8, the firm said it is furloughing some staff and cutting pay for most lawyers and staff. Partner draws have been reduced by an average of 25%, and higher paid partners will absorb a higher reduction. Associates, counsel and senior professionals will see their salaries reduced by 17.5%. Staff who earn more than $150,000 annually will see a 15% pay cut; staff who earn between $75,000 and $150,000 will absorb a 10% cut. Staff making less than $75,000 will not be impacted.
Holland & Knight would not say how many staff members have been furloughed, adding that the decision on which employees to furlough was determined by whether remote working “precluded or limited the firm from utilizing the staff members.” Furloughed staff will continue to receive their benefits.
Hughes Hubbard & Reed
The Am Law 200 firm on July 7 confirmed it had laid off an undisclosed number of attorneys and staff, even after it received a multi-million Paycheck Protection Program loan. The firm said the PPP loan money was used for its intended purpose, “to save jobs during the worst of the crisis.” But more than three months later, the firm said, it felt the “deep impact” from court closures and a slowdown in deal activity, and the firm made “difficult decisions on staffing to address the current environment.”
On April 23, the Kansas City, Missouri-based firm said it would use a combination of terminations, furloughs and pay cuts of attorneys and staff, and a 10% holdback of fixed income partner compensation beginning on May 1 to help meet the economic downturn caused by the COVID-19 pandemic. The latest moves follow a decision in March to increase equity partner holdbacks as well.
According to the firm’s statement, both lawyers and staff were affected by some or all of the measures, but the total number impacted by furloughs and layoffs “represents less than 10% of the firm.”
The newly announced cost-cutting measures came after the firm’s C-level staff took pay cuts and equity partners cut monthly draws by an additional 15% of base compensation, increasing the equity partner holdback to 35% from 20%.
In a statement from managing partner Steve Humke, per Above the Law, the firm has furloughed 18 professional staff and 17 timekeepers. Additionally, all members of the firm making more than $50,000 will have a compensation reduction, the amount of which was unspecified but tiered based on compensation levels, with partners taking the greatest reduction.
Humke also said the firm does not usually rely on credit and pays out a significant portion of partner draws every month after expenses are paid, rather than holding back funds for a larger end-of-year payout. As a result, he said, Ice Miller is aligned with peer firms’ compensation cuts. He said the firm plans to raise all team members back to their regular salaries as soon as the market allows.
Katten Muchin Rosenman
The firm said April 29 that it is implementing pay cuts and furloughs in May, cutting salaries by up to 20% for attorneys and business professionals who make over $100,000 a year, with no reductions below that level. The furloughs affected an unspecified number of professional and administrative staff and a small number of staff attorneys. Katten also suspended partner dividends at least through May. The firm simultaneously announced the creation of a fund to assist furloughed employees, augmenting state and federal aid.
On June 29, Katten said some of those furloughs will be made permanent. Katten enacted a “separation agreement” with many of its furloughed business administration staff, the firm said, noting the layoffs, starting Aug. 1, would not affect any attorneys at any level. Equity partners received monthly payouts in June, but at a 25% reduction from previous levels.
Kelley Drye & Warren
The firm said on April 14 that equity partners’ draws will be reduced on a proportional basis by as much as 20%, effective April 30. There will be an across-the-board, prospective salary reduction of 10% for all other lawyers and employees earning over $100,000, effective May 15. Also, the July 1 administrative staff salary increases will be postponed.
The firm also shortened the summer program, delayed the start of our first year associate class and postponed non-essential hires. It has also suspended services provided by non-essential consultants, independent contractors and vendors.
Kilpatrick Townsend & Stockton
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 Law.com in a statement. Secretaries, who are hourly employees, will have their work time reduced by 20% as of April 20.
KPMG – Australia
KPMG 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%.
In a firmwide email provided to ALM, K&L Gates announced equity partners’ scheduled advances will be reduced by 20% in April and “subject to review each month going forward.” Income partners, associates and staff will experience a 15% reduction in salary, with a floor of $75,000, the firm said, beginning May 1.
“This reduction will be revisited on a regular basis as the year progresses with the goal of mitigating or eliminating it as circumstances warrant. All personnel will be considered for discretionary bonuses for extraordinary performances or contributions, as many are working very hard through this period,” the email said.
The firm also noted other cost-saving measures, including cancelling and deferring discretionary spending and implementing a hiring freeze.
The firm said on April 28 that its salary reductions will range from 4% to 20%. On May 8, equity shareholders will take a 20% cut to compensation, while salaries for nonequity shareholders and staff making above $300,000 will be cut by 15%. The cuts for the highest earners will be followed June 5 by 10% reductions on average for the firm’s other lawyers and staff. Pay cuts will range from 4% for those making $50,000 or less to 13% for those making over $200,000 up to $300,000. While Littler is not laying off or furloughing any employees, it will cut pay by 50% on June 5 for staff who are unable to work remotely, the firm said.
Noting the firm is in a strong financial position with no long-term debt, Locke Lord said it is implementing some “difficult but preemptive actions” to reduce expenses for the remainder of the year. As of May 1, the Dallas-based firm reduced equity partner draws by 10%, compensation for attorneys and senior staff by 10%, and salaries for support staff by 5%. The firm said in a statement on May 8 that it had earlier furloughed a “small number” of support staff, but now eliminated some of the positions. “We are doing all we can to support the impacted employees,” the firm said.
Loeb & Loeb
California-based Loeb & Loeb is temporarily reducing partner draws by 20% and deferring its April capital distribution to July, because the federal tax filing was moved to that month, according to a memo from chairman Kenneth Florin. The firm also reduced pay of income partners, senior counsel, of counsel, associates and senior staff by 15% and paralegals and other staff by 10%.
The 300-lawyer firm, based in New Jersey, said in April that although it was doing well financially, it had decided to pause a portion of planned distributions for equity partners.
The firm said in July that it resumed distributions to equity partners in May and that it was “rapidly catching up on distributions.”
Marshall Dennehey Warner Coleman & Goggin
Marshall Dennehey president and CEO Mark Thompson announced in a firmwide email March 30 that the firm is suspending its 4% employer 401(k) match until next year. The policy is effective May 1. The firm is doing so in an effort to avoid layoffs, he said.
The firm announced on May 6 that it plans to reduce salaries by 15% for nonequity lawyers and staff who make more than $200,000. Salaries for business services staff who earn less than $200,000 will see their pay reduced according to a graduated scale. The firm already reduced distributions for equity partners in March.The firm also announced the start of a program that will allow both its lawyers and staff to request up to 12 weeks of sabbatical. The firm has also pushed back the start date for its U.S. associate class from fall 2020 to January 2021.
McDermott Will & Emery
The firm is making cuts to its professional ranks, eliminating an undisclosed number of staff in response to the COVID-19 crisis and its economic fallout. “While our firm is well positioned to weather economic turbulence, we are also not immune to it,” said a firm spokesperson on April 22. “Unfortunately, this meant making the difficult decision to part ways with some of our valued staff professionals and to furlough some others.”
Miller, Canfield, Paddock and Stone
Miller Canfield reduced attorney pay and reduced its head count by at least nine lawyers. The Detroit-based firm laid off one principal and six non-principals, including three associates, according to a statement on Above the Law on July 10. The firm furloughed two additional full-time attorneys, including one associate.
Miller Canfield CEO Michael McGee told Law.com in June that the firm was planning on pay cuts and “some furloughs and layoffs consistent with what we’re seeing throughout the legal marketplace.” McGee indicated that lawyers who have seen a slow down in their work will be furloughed. Starting June 15, he added, Miller Canfield planned to enact salary cuts for its equity and income partners, associates and professional staff. Income partners had their salaries cut by 10% while associates and staff saw their salaries get hit by 7.5%, all on an annualized basis, McGee said. No cuts were enacted on anyone making less than $50,000, nor did anyone’s salary drop below that threshold, he said. The firm had received a $5 million to 10 million loan as part of the Paycheck Protection Program.
At MinterEllison, equity partners have agreed to reduce drawdowns by half, effective immediately. It has also placed non-business-critical projects on hold, placed a freeze on new hires and deferred promotions until January 2021. Additionally, MinterEllison has introduced a temporary COVID-19 leave scheme and has asked all permanent employees to purchase six weeks of leave, which will be paid leave funded by a temporary salary reduction from April to December.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo
In an email to the firm April 10, Mintz chairman Robert Bodian said the firm will be decreasing staff and paraprofessional salaries by 5% across the board (with an exception for those making less than $75,000 per year) and will be reducing associate salaries by 10%. Discretionary bonus payouts have been reduced by 50% for staff and taken off the table for associates. The firm is instituting a holdback on 40% of equity partner profits (it was previously 30%), and monthly payouts to equity partners will be reduced by 10%, with nonequity partner payouts reduced by 5%.The email also said the firm is not in a position now where it needs to furlough or lay off attorneys or staff.
Munck Wilson Mandala
Midsize Texas firm Munck Wilson Mandala reduced compensation for partners, associates, exempt directors and managers, but said it had no plans to reduce attorney headcount. Managing partner William Munck said in a press release that a limited number of salaried employees will be furloughed and some hourly employees will work reduced hours, but all employees will receive full benefits. Additionally, several partners have chosen to defer their base salary for the next three months, Munck said. According to Munck, the firm intends to treat the reductions as compensation deferrals to be paid by the end of the year or when practical.
As of July 1, a firm spokesperson said that month, it had resumed normal pay for all employees, and it did not reduce its head count. The firm’s managing partner, William Munck, did not return a message seeking additional comment about furloughed employees.
Nixon Peabody furloughed approximately 25% of its staff, beginning April 6 until “further notice,” according to an April 3 tip to Above the Law. It took further steps on April 6 – ATL reported that 10% of non-partner attorneys, including senior associates, would be cut. Of those let go from the firm, about half would be layoffs with three months of health insurance, and half would be furloughs, presumably with full benefits. According to ALM data, there were 289 non-partner lawyers at the firm in 2019, meaning 28-29 former Nixon Peabody lawyers are now out of work. The firm has not responded to repeated requests for comment and confirmation about the cuts.
Norton Rose Fulbright
Norton Rose Fulbright is offering staff in Europe, the Middle East and Asia reduced working hours and pay for one year in response to the COVID-19 crisis, as well as deferring the payment of partner distributions, staff salary rises and bonuses for both groups.
If 75% of eligible staff accept the reduced hours offer, which means they could be asked in the next 12 months to reduce their working hours and pay by 20%, the new program will commence on April 20.
Ogletree, Deakins, Nash, Smoak & Stewart
The firm on April 21 said it will cut pay through the end of the year for all lawyers, including shareholders, and for staff making over $100,000. Ogletree is reducing compensation for equity shareholders by 20% and for other lawyers by 15%, according to the statement. Staff earning $100,000 or more will have pay cut by 10%, but those making less than that will not have their compensation reduced.
In an April 16 statement, the firm said it was furloughing some staff and reducing hours for others whose jobs are not suited for remote work.
Orrick, Herrington & Sutcliffe
The firm is delaying its incoming first-year associate class until 2021, reducing pay for U.S. attorneys and staff firm-wide, reducing some staff hours and altering its 2020 summer associate program. The firm said it is not planning to furlough or lay off employees, according to an April 8 statement. Associates and staff will see pay cuts on a graduated scale. A “small percentage of staff” will also see reductions in hours starting May 1 until September. Partners, of counsel and executive staff will see “deeper cuts.” The firm would not elaborate on what those reductions are. The firm also said it will conduct its 2020 summer associate program virtually and shorten the program’s length to five weeks. It is giving permanent offers now to 2L law students to return to the firm as associates after graduation and is giving current 1Ls offers to return to the firm next summer.
The firm said it has reduced distributions to partners, and all other attorneys will see their salaries decreased by 12% on an annualized basis. Staff with salaries of $60,000 or more will see their salaries cut by 3% to 9%, on an annualized basis, based on a graduated scale. In a statement, the firm said it wants to avoid layoffs, and it is still planning to merge with Atlanta-based Am Law 100 firm Troutman Sanders on July 1, as previously announced.
On May 22, the firm announced that it will also defer the start date for new associates to January 2021, to “provide for a better work and training experience.” The firm plans to provide its entry-level associates with financial assistance to help with living expenses and costs associated with bar exam preparation, and they will be able to enroll in the firm’s health insurance plan.
The firm said May 13 that it had delayed partner payouts starting in March. It also implemented 15% pay reductions going forward for non-partner lawyers and 10-15% pay reductions going forward for staff making over $125,000. The firm said at the end of this year it plans to allocate funds for special payments and bonuses to non-partner lawyers and staff, commensurate with performance.
Pillsbury Winthrop Shaw Pittman
Implementing a “shared sacrifice” approach to dealing with the economic fallout from the COVID-19 crisis, Pillsbury has temporarily reduced partner draws and associate, counsel and staff compensation. Beginning in April, partner draws were reduced by a minimum of 25%, with the percentage increasing on a progressive scale, so partners higher in the draw will see a larger cut. Compensation of associates and counsel was reduced by 20%. Staff in the U.S. making at least $75,000 will see a pay cut of 10% and those making more than $100,000 will get a pay cut of 15%. Chief officers will take a greater pay cut that is more in line with that of partners. The firm is considering similar actions for offices outside the U.S., a spokesman for the firm confirmed.
Pryor Cashman has furloughed some associates in response to a slowdown in work related to the coronavirus pandemic, managing partner Ronald Shechtman said. The leader of the 185-attorney firm wouldn’t specify the number of associates or say whether any practice groups were particularly impacted, but said the firm is “hopeful” and expects it can reinstate them once work picks back up.
PwC’s legal arm is freezing promotions, pay raises and bonuses across its whole U.K. business.
Quinn Emanuel Urquhart & Sullivan
Founder John Quinn confirmed May 11 that the firm has delayed partner distributions that were originally scheduled for April until July to respond to the economic uncertainties of the coronavirus pandemic. The firm has also adjusted the size of partner draws for April, May and June. The changes will be revisited in July.
Quinn would not comment on the specific size of the draws but emphasized that reductions were not universal. “Some people are getting less than before, while some are getting more,” he said. “It’s not true that all are getting reduced.”
Reed Smith is reducing partner distributions in response to the disruption and economic effects of the new coronavirus, the firm confirmed March 30. After first announcing that it would reduce monthly draws by 40% for the next five months for equity partners, and 15% for the next three months for nonequity partners globally, the firm said April 16 that it would also cut associate pay by 15% and counsel pay by 10%.
Later in April, the firm said it will also defer its equity partners’ bonuses into two payments, with partners paid half their bonus amount on the scheduled payment date, and the other half three months later. But, the firm said, ”Fixed share partner, counsel and associate bonuses will be paid in full and on their regularly scheduled pay dates.”
Ropes & Gray
The firm confirmed May 14 it is offering a voluntary buyouts plan to U.S. business support staff. Employees would receive one week of severance pay for every year of service to the firm, plus an additional four weeks of pay, equaling a minimum of 12 weeks or a maximum of 30 weeks’ pay. The firm will also pay its share of health benefits for employees who take the buyout through the end of 2020. Attorneys are not eligible for the buyout. Most departures will take place between June 19 and Aug. 3. “We’re being proactive. We need to take steps now to address our new reality,” a firm spokesperson said.
Saul Ewing Arnstein & Lehr
In an April 30 statement, the firm said it reduced partner draws and took other austerity measures including: salary reductions for people making more than $50,000 per year; temporary furloughs; and layoffs. A spokesperson for the firm declined to clarify the amount of the salary reductions or the extent of furloughs and layoffs.
Scahill Law Group
This midsize insurance defense firm with its main office on Long Island has furloughed 50 people, its managing partner said in an interview.
The firm said it is cutting salaries for both attorneys and staff, including reductions of up to 50% in compensation that will affect about 6% of the Chicago-based firm’s attorneys. Most of Schiff Hardin’s lawyers and staffers who make more than $100,000 will see their salaries temporarily cut by 15%; the potential 50% pay cuts some lawyers might receive will be based on “anticipated demand.
The firm on April 17 announced it was reducing equity partner draws, cutting salaries and furloughing 10% of its U.S. workforce. Starting May 1, all of Seyfarth’s non-equity lawyers in the U.S. will see their pay reduced by 10%. The firm is cutting salaries for staffers—the first $60,000 won’t be affected, but earnings between $60,000 and $150,000 will be cut by 5%. Anything a staffer makes past $150,000 will be cut by 10%. Equity partners, meanwhile, have seen their monthly draws reduced by 20% starting April 1. The 1,900-person firm is also furloughing 10% of its U.S. workforce for 90 days, but Seyfarth will pick up the tab for that group’s health coverage. The furloughs will affect staff and a “smaller percent of attorneys.”
Shearman & Sterling
Shearman is offering all its global staff and fee-earners sabbaticals on reduced pay. The voluntary leave program will allow participants to take up between three and six months off work at 30% pay, the firm confirmed, but that will be increased to 40% if they engage in pro bono work during their voluntary leave.
Sheppard, Mullin, Richter & Hampton
The firm announced April 13 it was furloughing 33 of its 823 staff members. The furloughs apply to team members who cannot do their jobs remotely, including receptionists, support services and file center employees, the international law firm said in a statement. The affected staff members had been on payroll during the last four weeks when the firm transitioned to working from home. The employees were told they could expect to return to work in 60 to 90 days.
Shook Hardy & Bacon
A firm statement said it is delaying or deferring various operating expenses, deferring some partner distributions, reducing partner draws, introducing pay reductions and temporarily furloughing some employees.
Smith Gambrell & Russell
The Atlanta-based Am Law 200 firm is deferring partner draws by 20% and cutting pay for all employees, including associates, by 10%, chairman Stephen Forte told Law.com. He said the firm will not be furloughing or laying off employees.
Squire Patton Boggs
The firm announced on May 1 across-the-board pay cuts in the U.S. and overseas, along with furloughs of an undisclosed number of support staff. The firm said partners, as owners of the business, would take the biggest hit, via reduced profit distributions. Associates will see salaries cut by 20%, but bonuses will not be affected. Support staff will see cuts ranging from 10% to 20%, with higher earners subject to larger reductions. Some staff who either are currently underused or unable to do their jobs remotely will be subject to furloughs. The firm is also canceling its 2020 summer associates program. Instead, admitted students will receive a $5,000 stipend. Incoming U.S. associates who had been scheduled to join the firm in September will now start in January 2021.
The Portland, Oregon-born Am Law 200 firm is reducing partner distributions by 20%, effective April 1, as well as a 20% pay reduction for associates, staff attorneys and of counsel on an annualized basis starting in May (making for a 13% reduction as of the end of the year). The firm is furloughing about 10% of staff beginning April 17 for at least 90 days, though benefits for these employees will continue. The firm has also implemented hourly reductions for staff, with corresponding pay reductions: 5% for those earning less than $75,000, 10% for those who make $75,000 to $100,000, 15% for those making $100,000 to $150,000, and 20% for those who make over $150,000 annually.
Stoel Rives has also put in place a hiring and spending freeze, eliminated associate bonuses based on hours billed, though it may give some “discretionary-only” bonuses, and eliminated reimbursement for parking and transit.
Stroock & Stroock & Lavan
Stroock implemented pay cuts and offered voluntary buyouts. From the start of June, equity partners saw draws reduced by 20% and all other lawyers took a 15% hit. Associates who hit hours targets will ultimately be “made whole,” however. And employees who wish to retire early or avoid returning to the office when remote work ends will have the option of taking “generous” buyouts.” A spokesperson added, “We have let staff and attorneys know that, subject to firm needs, we are open to reduced schedules for individuals who voluntarily elect to go that route.”
Sullivan & Worcester
In addition to general discretionary expense cutting, managing partner Joel Carpenter said the Boston-based firm has furloughed a number of employees for 90 days with full benefits and has instituted temporary pay cuts across the board. Employees making less than $66,000 per year will not be affected, while those staff and employees making over that mark will see a 5% reduction in salary. Non-equity partners will see a 10% reduction, while equity partners will see a 20% decrease from their monthly draws.
Taft Stettinius & Hollister
Effective April 1, partner draws were reduced by 25% and the firm made “minimal reductions” in head count representing 1.4% of attorneys and 3.5% of staff, spread across the firm’s seven primary offices. “At present, Taft does not intend to adopt the approach of making across the board reductions in the head count or compensation of its administrative staff or associates, counsel or staff attorneys,” the firm said on April 6. “Instead, consistent with the employer-of-choice workplace culture that is one of Taft’s hallmarks, the Taft partners intend to shoulder the primary economic burden of COVID-19.”
The firm has aggressively decreased non-compensation expenses and is reducing quarterly partner draws by 15% and staff compensation by 1.7% on an annual basis, according to an April 14 email from a spokesperson.
At Troutman Sanders, which announced cuts just before Memorial Day, pay reductions for lawyers and staff ranged from 2% to 18.5% on an annualized basis. The deepest cuts applied to equity partners. Troutman had also announced in mid-April that it was offering some staff the option of a voluntary leave of absence, starting May 1.
The firm has taken the following measures in response to the ongoing COVID-19 crisis, according to a statement a spokesperson provided on May 5: “We reduced our workforce by 4% in areas where utilization was most impacted by the remote work environment, and provided each affected person with severance plus healthcare coverage through September. The firm’s shareholders/owners also proactively reduced their current pay by 20% to bear the financial brunt of the crisis. Finally, we shortened the duration of our 2020 summer program and deferred the start date of our incoming 2020 first year associate class to January 2021.”
The firm said in an April 10 statement it has postponed certain distributions to equity partners, implemented “tiered compensation reductions for attorneys and staff,” and temporarily furloughed certain staff in roles that primarily support office operations. “We have taken steps to tailor staffing needs to the current environment and prudently prepare the firm for the future,” the statement added.
Vinson & Elkins
The firm will delay the start of its 2020 summer associate program until June 15 at the earliest, because several offices are now under mandatory stay-at-home orders that will remain in effect through April and into May. “It is our hope and intention that the summer associate program will occur, albeit with some appropriate modifications in light of the COVID-19 pandemic,” hiring partner Steve Gill wrote in a note sent to associates last week.
Winston & Strawn
The firm announced to partners on April 6 that their distributions would be cut by 50% over the next three months, according to a report by Above the Law.
Womble Bond Dickinson
Womble Bond Dickinson is temporarily cutting pay across the firm’s U.S. offices and furloughing or laying off some employees to weather the economic shutdown from the coronavirus pandemic. The trans-Atlantic Am Law 100 firm, which has about 550 lawyers in its U.S. offices, has instituted a 10% or less pay cut for all U.S. attorneys and staff, furloughed “some selected employees” and laid off “another small group,” Womble said in a statement to The American Lawyer.