Pinsent Masons has joined several other firms in taking measures to attempt to manage the economic fallout of the COVID-19 pandemic, including deferring partner payments and furloughing staff.
According to two people with knowledge of the situation, the firm has told partners it will hold back the most recent quarterly profit distribution, with the virus outbreak cited as the reason for the decision.
Pinsents’ partner distributions have already been derailed this financial year. The firm deferred half of the quarterly distribution due in October 2019, when it failed to hit billing and cash collection targets at the start of the financial year.
According to one person with knowledge of the payment schedule, the firm told partners on Monday that the 50% still due to partners from October will be paid, but a specific date was not given.
A profit distribution due around Christmas, according to the person, was paid in full.
The firm has also moved to furlough some non-fee earning staff, the firm confirmed. A person with knowledge of the situation said that Pinsents is set to “top up” the 20% of salaries not covered by the government’s scheme, which pays furloughed workers 80% of their pay.
Commenting on the decision to furlough staff, Pinsents senior partner RIchard Foley said: “In light of the Covid-19 pandemic we continue to carefully consider our approach to managing our business. Our key consideration right now, is those employees who, through no fault of their own, are simply not able to carry out their role from home.
“We need to provide them with immediate assurance as to their roles and salaries and the Government’s furloughing scheme enables us to do just that.”
“Having consulted carefully and widely, we have decided to furlough a group of employees who are unable to work at home and to ensure their salaries and benefits remain unaffected.”
Pinsents had previously said that it was considering whether or not to defer or reduce partner pay-outs in March.
At the time, Foley commented: “Businesses around the world are trading in circumstances that none of us have faced before; we’re no different. In light of this, our focus is understandably on the health and wellbeing of our people, our clients and our suppliers.
“Right now, the guiding principle for most businesses is prudence. Ordinarily around this time of year, we make a quarterly distribution to our partners. Whether we will do so and if so, in what amount will depend upon how events unfold over the coming days and weeks.”
Other firms have however already taken similar action in light of the virus. Freshfields Bruckhaus Deringer confirmed on Monday it has suspended profit distributions, while at the end of March A&O asked partners to contribute capital to the business and is gradually reducing its partner profit distributions.