Law Firms

Pay cuts and furloughs continue as more firms trim costs to address COVID-19

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Several major law firms announced pay cuts and some furloughs this week, joining at least nine midsize and large firms that took those steps last week.

Above the Law and are tracking the firms and their temporary cuts in charts, while Law360 lists about a dozen major firms that implemented cuts this week.

Above the Law summed up the situation this way: “The times we live in are now uncertain, the economy is going downhill, and nothing is normal anymore. If you remember what happened back in 2009, when thousands of lawyers lost their jobs thanks to the recession, you may be starting to have some flashbacks.”

One firm taking a more unusual approach is Bryan Cave Leighton Paisner, which is offering its workforce “sabbaticals on 30% pay and part-time working hours,” report, Law360 and Above the Law. The firm is also deferring a portion of partner distributions and proposing to cut pay by 15% for 13 weeks for all employees making more than $40,000.

Day Pitney is also cutting hours—and pay—to 60% of the norm for some staff members during the work-at-home period, according to Above the Law. For other staff members and all lawyers, pay will be cut by 15%. “Significant reductions” will also be made to partner draws.

Another firm, Orrick, Herrington & Sutcliffe, has imposed cuts while also delaying the start date for new associates until 2021, reports.

The law firm is cutting pay by 5% to 15% for associates and most of counsels; cutting pay by 1% to 15% for most staff members; and imposing “deeper cuts” for partners, some of counsels and executive staff. Some staff members will also be asked to work reduced hours.

Sources told Above the Law about an unusual feature of Orrick’s program: The firm will reportedly offer “make whole” awards to top contributors that will be separate from annual bonuses.

Other law firms that recently announced temporary cuts include:

• Blank Rome, which is cutting compensation by 15% for partners, associates, counsels, professional staff and assistants. The law firm has also furloughed a small number of support staff.

• Winston & Strawn, which is reportedly cutting partner pay distributions by 50% for three months.

• Sullivan & Worcester, which furloughed some employees while maintaining their benefits, cut pay for associates and those making more than $66,000 per year by 5%, cut nonequity partner salaries by 10%, and cut equity partner draws by 20%.

• Brown Rudnick, which cut associate pay by 7.5% on an annualized basis, reportedly cut partner draws, and reportedly conducted “stealth” associate furloughs.

• Venable, which is reportedly cutting pay on a sliding-scale basis. Those making more than $400,000 with take a 20% cut on all compensation, plus a 10% cut on compensation above $400,000. Other pay cuts range from 20% to 5%. Those making less than $60,000 won’t see a cut in pay. Some support staff are temporarily furloughed with their medical benefits continuing.

• Nixon Peabody, which has reportedly furloughed about 25% of its staff.

• Ice Miller, which furloughed “35 professional staff and timekeepers” and cut pay on a sliding scale for those who make more than $50,000 per year. Partners will take the largest reductions.

• Shook Hardy & Bacon, which has reportedly imposed salary cuts that range from 20% for professional staff, 25% for associates, and about 50% for income partners (for at least the month of April). The firm also reportedly cut equity partner draws by 90% this week and 75% after that.

• Cozen O’Connor, which asked equity partners to defer a portion of their compensation, ranging from 10% to 20%, and furloughed less than 5% of its administrative staff with their benefits to continue.

Law firms that previously cut pay or furloughed employees on a temporary basis include:

• Arent Fox, which reportedly cut salaries for counsels and nonequity partners by 30% and for associates and staff by 25%. The firm also reportedly cut equity partner distributions by 60%.

• Curtis, Mallet-Prevost, Colt & Mosle, which reportedly cut associate salaries by 25%.

• Loeb & Loeb, which cut pay by 15% for income partners, senior counsels, of counsels, associates and staff members who are making more than $200,000 per year. Paralegals and other staff members will see pay cuts of 10%. Capital partners’ monthly draws will be cut by 20%.

• Baker Donelson, which is imposing pay cuts, reducing partner draws and furloughing some employees.

• Pryor Cashman, which has furloughed some associates.

• Cadwalader, Wickersham & Taft, which is imposing temporary pay cuts and pausing partner distributions. Legal staff members, including associates, will see a 25% pay cut, as will senior administrative staff members earning more than $100,000 per year. Other administrative staff will see a 10% pay cut.

• Womble Bond Dickinson, where some employees are being laid off and furloughed. The firm has implemented temporary pay cuts of up to 10% for others. The percentage cut will be less for lower-paid employees.

• Reed Smith, which is temporarily reducing partner distributions.

• Marshall Dennehey Warner Coleman & Goggi, which is suspending its 4% employer 401(k) match until next year.

Corrected April 13 at 9:03 a.m. to report that Sullivan & Worcester cut pay for associates and those making more than $66,000 per year by 5%.

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