Holland & Knight has cut compensation for a majority of its workforce and furloughed an undisclosed number of staff, joining a growing list of law firms that have reduced expenses as the novel coronavirus forces businesses to close.
In a statement Friday, the firm said partner draws have been reduced by an average of 25%. The partner compensation cuts are progressive, meaning higher paid partners absorb a higher reduction. Associates, counsel and senior professionals will see their salaries reduced by 17.5%.
Staff cuts will also be progressive. Those 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.
The austerity measures are set to expire in 60 days. After that, the firm will reevaluate the policies and decide whether to continue, eliminate or alter them.
The cuts come despite Holland & Knight’s stellar financial performance in 2019, when, for the first time in firm history, revenues broke the $1 billion threshold. Even with more equity partners on board, profits per equity partner saw a 10% increase, from $1.42 million to $1.57 million. And revenue per lawyer grew 5.6%, from $802,000 to $847,000.
“The firm entered the current crisis in a strong financial position. Nevertheless, it is not immune from the effects of the economic downturn,” managing partner Steven Sonberg said in a statement. “In order to meet the challenges we face, we are asking all members of Holland & Knight to sacrifice in some way as the firm continues to evaluate its operations. Our proactive, but measured, approach to management has served the firm well during the past and we are confident it will do so during this crisis.”