Law Firms

Some law firms will die without quick cuts, consultant says; which ones acted this past week?

  • Print.

pay cuts money and scissors

Image from

At least a dozen more large and midsized law firms cut pay and furloughed employees in the past week because of the novel coronavirus pandemic. But it’s not nearly enough, according to a former BigLaw lawyer who once worked as a consultant.

Hugh Simons, a former senior partner at the Boston Consulting Group, says cuts are a matter of survival for many law firms, but they are dragging their feet. Simons makes his case in an article for

“The consensus estimate for 2020 revenue is a decline of 15% to 20% from last year,” Simons wrote. “And yet, as of April 26, less than a quarter of the Am Law 200 have reduced salaries or laid off personnel. This feels like a sluggish response given what the partner profit implications might be.”

Simons looked at how such a revenue decline would affect profit margins at the nation’s 200 top grossing law firms. Last year, 126 of those law firms had profit margins of 40% or below. Yet no cuts had been reported at 81 of those 126 law firms as of April 26, he wrote.

“I don’t see how all 81 of the low-margin, no-comp-cut, firms can survive,” Simons wrote. “Let’s say either the data are wrong, or the revenue outlook is stronger, for a half of these firms. That would mean 40 firms come under partner departure pressure. If departures take hold at, say, just a third of these firms then, in round numbers, 10 to 15 firms will go under.”

Simons’ column was published April 27, before additional law firms announced cuts. Since the ABA Journal covered furloughs and pay cuts last Thursday, at least 12 more law firms have taken similar action, according to stories by Above the Law, and Law360.

Law firms that took temporary steps in the last week to cut expenses include:

• Akerman, which has cut the size of its workforce by less than 5% and cut pay. On an annualized basis, most partner draws will be cut by 12.5%, associate pay will be cut by 7.5%, compensation for staff making at least $150,000 will be cut by 7.5%, and pay for staffers making less than $150,000 will be cut by 5%. (, the South Florida Business Journal)

• Baker Botts, which is reportedly cutting pay by 20% to 30% for counsels, by 20% for associates, and by up to 25% for staff members making more than $70,000. Partners have also agreed to compensation reductions. Baker Botts confirmed temporary pay cuts but not the amounts. (, Above the Law)

• Buchanan Ingersoll & Rooney, which says it has furloughed “a very limited number of administrative staff” and “temporarily adjusted compensation across all levels.” (Above the Law, Law360)

• Davis Wright Tremaine, which is reducing equity partner distributions, furloughing 8% of its staff, moving a small number of staff members to reduced schedules, and cutting pay. The pay cuts are 15% for contract partners and top executives; 12% for associates and counsels; and 6% to 10% for staff members making at least $60,000. The firm has a partner-funded program to help employees experiencing financial hardship. (Above the Law, Law360, Bloomberg Law)

• Dinsmore, which says it has deferred a portion of partner distributions, made a small number of layoffs and furloughed some staff. (Above the Law)

• Katten Muchin, which will suspend partner draws for two months, furlough some business professionals and staff attorneys, and cut pay by up to 20% for lawyers and business professionals who make more than $100,000. The firm has created a fund to supplement state and federal assistance for furloughed employees. (Above the Law,

• Littler Mendelson, which is cutting pay by 50% for staff unable to work remotely, cutting equity partner pay by 20%, and cutting pay for nonequity shareholders and staff making above $300,000 by 15%. Other lawyers and staff members will see pay cuts of 4% to 13%. (Above the Law,, Law360)

• Manatt, which reportedly cut lawyer pay by 20%. The firm did not confirm tipster reports to Above the Law. (Above the Law)

• Nelson Mullins, which is reportedly holding back 9% of associates’ annual base income. Associates who meet their collection goal will get their money back. Staff members will be furloughed for one week of their choice. (Above the Law)

• Saul Ewing Arnstein & Lehr, which has reduced partner draws, furloughed and laid off employees, and cut salary for those making more than $50,000. (Above the Law)

• Shearman & Sterling, which is offering voluntary leave to all its global staff and fee earners. Those who volunteer can take up to six months off work at 30% pay. (, Above the Law)

• Sheppard Mullin, which furloughed 17 staff members in addition to 33 staff members previously furloughed. The law firm is also cutting pay by 12% for associates, special counsels and staff attorneys; and by 5% to 10% for staff members making at least $70,000. Partner cuts will be at a “meaningfully greater percentage.” (Above the Law)

See also: “It was another bad week for many BigLaw lawyers and staffers; who saw pay cuts and furloughs?” “At least 19 more law firms cut pay and furlough employees; will partners ultimately benefit?” “Pay cuts and furloughs continue as more firms trim costs to address COVID-19” “BigLaw pay cuts and layoffs are likely to multiply, experts say; which firms are doing it?”

Give us feedback, share a story tip or update, or report an error.