Dozens of Atlanta-based law firms were among the roughly 2,200 Georgia businesses applying for Paycheck Protection Program loans at the top level of $1 million to $10 million in order to preserve jobs during the ongoing pandemic.
A total of 46 Georgia firms, all but four in Atlanta, were among the 300 professional service firms that applied for $1 million or more, according to Small Business Administration data released Monday. That included firms ranging from Am Law 200 firms to personal injury shops, all seeking support for up to 500 jobs. There were 28 firms that said the loans would support 100 or more jobs, with 14 of those saying they would support 200 or more.
Aldridge Pite was the largest of the Georgia law firms to seek a PPP loan, based on the loan amount and number of jobs supported. The national foreclosure and mortgage services firm, based in Atlanta, applied for between $5 million and $10 million to support 488 jobs, according to SBA data. Aldridge Pite did not respond to a query about layoffs or pay cuts.
But at Hall Booth Smith, co-founder John Hall said the loan assistance his firm received has preserved jobs and pay. Hall Booth applied for a PPP loan in the $5 million to $10 million range to support 482 jobs.
Hall said in an email that his firm has neither laid off nor furloughed any employees, nor cut salaries since the pandemic’s March onset. “It allowed us to keep our people working, especially while adjusting to moving out of the office environment,” he said.
But, Hall added, the firm has cut its budget for marketing, seminars, education and other areas and the court shutdown since March is affecting revenue for the firm, which has a large litigation defense practice. Georgia courts are currently closed until July 16.
Hall Booth’s productivity for the second quarter was down by about 15% to 20%, Hall said, adding that not being able to do “in-person depositions, interviews, hearings, meetings, settlement conferences or mediation has cost us significant revenue.”
Hall forecast a further revenue decrease for the third quarter as the pandemic wears on. “We think that unless there is a broad opening of the courts, the loss of revenue opportunities noted above will continue,” he said.
The primary aim of the low-interest loans, backed by the SBA, is to preserve jobs at businesses with 500 or fewer employees during the economic disruption from the COVID-19 pandemic. The original deadline to apply for a PPP loan passed on June 30, but Congress approved a six-week extension, giving businesses until Aug. 8 to secure a piece of the remaining $130 billion.
Besides Aldridge Pite and Hall Booth, three other Atlanta-based firms applied for $5 million to $10 million PPP loans: Morris Manning & Martin (for 309 jobs), Hawkins Parnell & Young (for 292 jobs) and Smith, Gambrell & Russell (for 263 jobs).
Morris Manning and Smith Gambrell are both Am Law Second Hundred firms, based on revenue, while Hawkins Parnell is a national defense litigation firm headquartered in Atlanta. Hawkins Parnell did not respond to a query about layoffs or pay cuts.
Morris Manning used the PPP loan to avoid making any layoffs, furloughs or pay cuts, said its managing partner, Simon Malko, in an email. “We explored every viable measure [including a PPP loan] to ensure MMM would emerge from the pandemic with our structure and employees intact,” he said.
“As a result of receiving those funds, we have not needed to institute the sorts of drastic cost-saving measures (such as across-the-board salary reductions, layoffs or furloughs) that many other law firms adopted,” Malko said.
Asked if the pandemic has affected revenue, Malko replied, “Like most businesses, we felt the impact of COVID-19 in the second quarter. The long-term impact remains to be seen, given the continued uncertainty.”
Smith Gambrell’s managing partner, Stephen Forte, said in an email that the firm applied for the PPP loan to safeguard jobs and pay—and that it has not laid off or furloughed any personnel.
Smith Gambrell on April 1 preemptively deferred partners’ draws by 20% and temporarily cut pay by 10% for other lawyers and staff before receiving a PPP loan in late April.
Forte said the loan has allowed the firm to cancel the pay cuts. “The firm has restored all compensation to all personnel through catch-up payments for the entire second quarter, in large part because of the PPP loan,” he said.
Another Am Law Second Hundred firm in Atlanta, Arnall Golden Gregory, also was approved for a PPP loan, but in the lower $2 million to $5 million range to support 210 jobs, according to SBA data. The firm did not respond to a request for comment.
Nationally, 45 Am Law 200 firms applied for PPP loans, including 39 at the $5 million to $10 million level and six at the $2 million to $5 million level.
Besides Arnall Golden, eight other Atlanta firms sought PPP loans in the $2 million to $5 million range for 200 or more jobs. That included Swift, Currie, McGhee & Hiers (325 jobs), Constangy, Brooks, Smith & Prophete (258 jobs), Drew Eckl & Farnham (257 jobs), Taylor English Duma (240 jobs), Ford & Harrison (238 jobs), Freeman Mathis & Gary (235 jobs), Weinberg, Wheeler, Hudgins, Gunn & Dial (202 jobs) and Lueder Larkin & Hunter (200 jobs).
Among other law firms seeking $2 million to $5 million loans to support fewer than 200 jobs were: residential real estate closing firm O’Kelley & Sorohan; general practice firm Moore Ingram Johnson & Steel; real estate firm Weissman; personal injury firm Montlick & Associates; foreclosure firm Campbell & Brannon; defense litigation firm Copeland Stair Kingma & Lovell and construction law firm Smith Currie & Hancock. All of those firms are in Atlanta.
Only four of the 46 firms seeking $1 million or higher PPP loans were outside the metro-Atlanta area: James Bates Brannan Groover in Macon; Hunter McLean Exley & Dunn and personal injury firm Michael G. Hostilo in Savannah; and Page, Scrantom, Sprouse, Tucker & Ford in Columbus.
Businesses must meet certain conditions for the SBA to forgive the PPP loans, which have been revised since the program was announced in March. Currently a business must spend at least 60% of its loan on payroll for up to a 24-week period after receipt, and must maintain at least 75% of employees’ salaries.
Asked if Hall Booth expected to qualify for total loan forgiveness, Hall replied that the firm is looking into the regulations, but does not really know at this point. “It causes concern, not knowing,” he added.