Pay cuts, layoffs, lower partner distributions part of BigLaw response to COVID-19 impact
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The economic impact of the novel coronavirus pandemic is hitting BigLaw.
At Womble Bond Dickinson, the impact has led to layoffs, furloughs and temporary pay cuts, report Above the Law and the American Lawyer. At Reed Smith, partner distributions are being reduced “in the near term,” the American Lawyer reports in another story.
The pay cuts at Womble Bond Dickinson are 10% or less. The percentage cut will be less for lower-paid employees. The firm did not say how many employees are being laid off and furloughed nor whether any of those affected were associates.
Above the Law was first to report the measures at Womble after receiving reports from multiple tipsters in the firm. The law firm then released statements to Above the Law and the American Lawyer confirming the actions and saying the actions were a response to economic disruptions caused by the novel coronavirus.
“We made the hard decision to furlough some selected employees and let go another small group,” said the statement provided to the American Lawyer. “In addition, we are temporarily instituting a 10% or less pay reduction (with lower levels of compensation reduced by smaller percentages) for our remaining staff and attorneys. Decisions like these are never easy, but we believe taking these steps now will curb the negative economic impact of the COVID-19 pandemic and keep our firm strong and well-positioned to continue serving our clients at the highest level.”
Reed Smith confirmed its reduced partner distributions in a statement to the American Lawyer.
“Businesses around the world are bracing for the short-term and potential long-term economic impacts of COVID-19, and we are taking a fiscally conservative yet responsible approach,” the statement said. “Our leadership is taking a cautious approach and has made the decision to slow partner cash distributions in the near term as a precaution. We think this is a prudent choice as we look ahead to uncertainty in global events.”
The statement said Reed Smith’s performance so far this year is on target, and some of its practices are “exceptionally busy.”
Other law firms subsequently announced temporary measures in response to work slowdowns. They include:
• Baker Donelson, which is imposing temporary 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.
• Marshall Dennehey Warner Coleman & Goggi, which is suspending its 4% employer 401(k) match until next year.
Story updated April 1 at 10:06 a.m. to list additional firms.