43% of partners took a pay cut because of COVID-19, new survey finds
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Forty-three percent of partners reported taking a pay cut directly related to COVID-19, according to Law360’s inaugural Law Firm Partner Compensation Survey: Partnership and Pay in an Unprecedented Year, released Wednesday.
Of those partners who saw their pay reduced because of the pandemic, nearly half said their salary was slashed by 20% or more, the survey found. The median pay decrease due to the pandemic was 15%.
Law360 has more on the survey here.
Additionally, 34% of partners said their firms de-equitized partners in 2020, while 38% disclosed that their firms had asked partners to retire.
The survey highlighted that respondents making $750,000 or more, which was the highest pay bracket, were the most likely to report partner de-equitization and retirement requests. Those making less than $300,000 were the least likely to report such requests.
“We had seen press releases here and there from firms about de-equitizing or about early retirements or pay cuts, but we wanted to try to see if we could get a real snapshot of exactly how many people were being affected,” says Kerry Benn, director of series, surveys and data at Law360 Pulse. “Actually seeing those numbers … really puts it into perspective that [COVID-19] was affecting a huge swath of the legal industry.”
Law360 conducted the survey from Sept. 1, 2020 to Oct. 16, 2020. It surveyed law firms with at least 25 attorneys and received 584 responses. The responding attorneys had been at the partner level for an average of 12 years.
Meanwhile, the survey found that nearly a third of respondents said their firms were reducing their physical space in light of COVID-19. Sherry Cushman, a vice chairman at Cushman & Wakefield, discussed this trend during the October 2020 episode of the ABA Journal’s Legal Rebels Podcast.
As for billing hours, close to half of the partners surveyed reported expecting that they would remain the same in the coming year. Partners at firms with 1,000 or more lawyers were the most optimistic about the year ahead, 40% sharing that they thought their billing hours would increase.
The report also featured several statistics highlighting the gender pay gap between male and female partners. They include:
- • Nearly two-thirds of the male partners who responded said they were equity partners compared to 44% of the female partners.
- • More women than men reported receiving salaries in the lowest pay bracket, and more men than women disclosed receiving salaries in the highest pay bracket.
Benn says she was not surprised by what the survey results indicated regarding the gender pay gap but called it “a stark portrayal” of a long-standing problem that’s slowly getting better. She also says Law360 plans to conduct the partner compensation survey annually moving forward.
“I think next year it will be interesting to see if we can see how much things bounce back, if they bounce back,” Benn says.