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Coronavirus crisis: Cost-cutting and other law firm responses to the pandemic

Caroline Spiezio  

Caroline Spiezio  

Updated version of this list

(Reuters) – Law firms across the United States have announced measures aimed at conserving cash or otherwise mitigating the fallout of the coronavirus crisis, which has since March led to courts and businesses shuttering nationwide, leaving firms’ financial futures uncertain. Here is a roundup of changes law firms have implemented amid the pandemic.

Allen & Overy in March said it will cut partner pay, defer certain investments and recruitment and cancel events. It will also freeze salaries for attorneys or business support staff in the first quarter of its upcoming financial year, but still award bonuses for its fiscal year ending April 30, with payments split between its July and October payroll.
Arent Fox in April said it will institute “a temporary pay cut for all attorneys, professionals, and staff.”
Ashurst in April said it will reduce its monthly sums paid to partners by 20% for the next 6 months; defer salary reviews for its upcoming financial year until November; postpone paying half of staff bonus amounts until November; and ask many staff to adopt an 80% work schedule for three months starting on May 1. It said it also expected partners’ incomes for its financial year starting on May 1 to be significantly reduced.
Baker Botts in April said it will delay the start of its summer program by at least a month and that it plans to conduct at least part of the program remotely. It will still extend offers to all of its summer associates, as long as they maintain a strong academic performance.
Baker Donelson in April said it has cut shareholder pay and that it has temporarily reduced salaries for employees, including attorneys, by 20%. It will furlough some employees who are unable to work remotely, less than 4% of its workforce.
Baker McKenzie in April said its attorneys and other timekeepers and business professionals in the U.S. will take a 15% reduction in base compensation, which will likely last from May 1 to Dec. 31. No one earning less than $100,000 will be impacted by the cuts and the “largest compensation impacts will be felt by equity partners,” it said. The firm later said it would shorten its summer program in the U.S. and Canada to five weeks, from June 29 until July 31, and would conduct it virtually but that it may hold in-person networking events or in-office work if it is logistically feasible.
Ballard Spahr in April said it will reduce salaries by 15% for all employees earning more than $250,000, and by 10% for those earning between $249,999 and $75,000. Those earning less than $75,000 will not take a reduction in pay, it said. Partner draws are being reduced by 20% to 25%.
Blank Rome said in April that it will temporarily cut pay by 15% for partners, associates, counsel, professional staff and assistants, and that it has temporarily furloughed a small number of staff.
Bremer Whyte in April said it has laid off or furloughed 25 associates and has also furloughed approximately 20% of its staff. Equity partners are temporarily forgoing all their compensation.
Brown Rudnick in April said it has reduced associate pay by 7.5% for the year and that partner draws would be reduced.
Bryan Cave in April said it will defer partner payouts and that it was planning a 15% salary reduction for all employees in all of its offices who have an income of $40,000 or more. Reductions will start in May and last 13 weeks. It has also offered employees the option to take sabbaticals with 30% pay or to work part-time.
Buchanan Ingersoll & Rooney in April said it has temporarily adjusted compensation across all levels on a varying scale.
Patrick Quinn, Cadwalader’s managing partner, told employees in an email in March that “partners have been told not to expect any distributions during the peak months of the crisis” and that pay for legal staff, including associates, counsel and special counsel, and senior administrative staff would be cut by 25% for approximately the next four months. Pay for other administrative staff would be temporarily reduced by 10%, according to the letter.
Cahill Gordon & Reindel in April said it will suspend its summer associate program, but that it will still pay students in full and make them offers to work at the firm after they graduate from law school in 2021.
Clark Hill in April said it will reduce pay for all attorneys and staff, freeze all discretionary spending, revise certain benefits and furlough some employees.
Clifford Chance in April said it will defer its summer profit distributions for partners, which would have been paid in June. It also said it will not pay all of its bonuses in full in May, pushing portions of some bonus payments until November. The start date for its Americas summer program has been pushed back to June from May, but students will still be paid for the entire summer. The program will be conducted virtually.
Cooley in April said its summer program, which has 102 summer associates, will be shortened from 10 weeks to six.
Cravath in April said that the beginning of its summer program would be held virtually and that the program’s start date had been pushed back to June. All impacted students will receive offers.
Crowell & Moring in April said that on May 1 its equity partners’ pay will be reduced by 25%; most income partners’ by 20%; and associates’ and counsels’ by 15%. Staff who earn more than $100,000, about one-third of staff, will have their pay reduced by between 5% and 20% depending on their salary.
Davis Polk & Wardwell in April confirmed it has postponed the start of its summer associate program but did not say when it would begin.
Day Pitney in April said it will cut pay by 15% for all attorneys and some staff, and reduce hours by 40% for other staff while its offices are closed. The firm is also reducing partner draws by between 15% and 42% and suspending its April supplemental distribution, its managing partner Tom Goldberg said.
Dentons in April said it had adjusted the timing of bonus payments for its lawyers in the U.S. The firm confirmed that it will reduce partner draws by at least 20%. It will also reduce pay for timekeepers and business service staff on a gradual scale with no reduction for those earning $60,000 or less and up to 20% for those earning more than $190,000.
DLA Piper in April said it has delayed the start date for its summer associate program from May until June.
Downey Brand managing partner Scott Shapiro in April said that partners will reduce draws and that the firm will cut salaries for its other attorneys and salaried staff by 20% for a four-month period ending July 31. Hourly staff will transition from working five days a week to four.
Duane Morris in April said that it has deferred equity partner distributions and reduced targeted year-end equity partner compensation by 25% and reduced targeted year-end non-equity partner compensation by 20%. It said that on May 1, associate, special counsel and exempt business staff whose compensation is more than $100,000 annually, will have their salaries reduced by 15%. It said it has also furloughed some employees who were unable to work remotely but that they would retain their healthcare benefits. Some other staff have been moved to a reduced work schedule and retirement plan contributions are suspended for 2020, the firm said.
Faegre Drinker Biddle & Reath in April said it has deferred one-third of equity partner distributions for the second quarter and that it would review its expenses. The firm later said it will defer the start date of its summer associate program to no earlier than July 6 and that it is evaluating the program’s format.
Fisher Phillips in April said it has instituted temporary 20% pay reductions for attorneys and staff.
Foley Hoag in April confirmed that it will cut salaries for associates, counsel and business professionals with a salary of $190,000 or more by 15%. Other employees with a salary between $189,999 and $150,000 will face a salary reduction of 7.5%. Non-equity partner pay cuts will range from 20% to 30% of their base compensation, depending on past performance and expected future work levels, and equity partners have had their draws reduced.
Fox Rothschild in April said that it is implementing a tiered salary reduction, between 10% and 15%, for all attorneys and staff earning above $100,000, starting in May. There will be no reductions for anyone at the firm with a salary of $100,000 or less. Equity partners are reducing their monthly draws in tiers, between 10% and 20%, starting in May. The firm’s summer associate program has been shortened and its first-year associate class will not start until Jan. 2021.
Fragomen partner Blake Chisam in April confirmed that the firm’s partners and senior C-Suite corporate leaders will take pay cuts, but declined to say what that cut would be. Employees will also not get raises or bonuses this year, and the firm will suspend its discretionary employer matching contribution under its 401(k) retirement plan in the U.S.
Freshfields Bruckhaus Deringer in April said it will suspend partner pay for its financial quarter that ends in April, and freeze pay and delay bonus decisions for all employees. The firm also delayed its summer associate program to run from mid-June through August instead of its usual May through July time frame.
Gibson Dunn in April said it has pushed the start date of its summer program to June 15.
Goldberg Segalla in March said it has laid off employees whose responsibilities would be unessential or moot because of its offices closing amid the coronavirus outbreak.
Goodwin Procter in April said it asked a limited number of its global operations team members to leave the firm. It will provide severance packages and make continued contributions to impacted workers’ healthcare benefits through Sept. 30.
Greenberg Traurig in April said it has called off its traditional summer associate program for 2020 but that students could still work later this summer for hourly pay if its offices re-open. It will provide second-year students who would have been in the summer program offers to join the firm full time after they graduate and pay them a $10,000 advance against their first-year associate starting salary. First-year students will receive an offer to join the firm next summer and a $5,000 advance in July 2020 against their salary for July 2021.
Greenspoon Marder in April said it had decided to implement various cost-cutting measures.
Hinshaw in April confirmed that it would cut salaries by 15% for all employees with an annual salary higher than $55,000.
Kilpatrick in April said it reduced partner draws by an average of 10% and that later that month all other salaried employees would face a 5% cut. Secretaries, who are paid hourly, would have their hours cut by 20%, it said. The firm also said it would furlough a small number of employees with jobs that directly relate to being on-site in one of its offices though it will still provide them medical and other benefits.
Ice Miller said in April that it had furloughed 18 professional staff and 17 timekeepers, including some associates and counsel. It will also cut pay for all employees who make more than $50,000, with reductions varying based on income level and with partners taking the biggest hit.
K&L Gates in April said that its equity partners will see a 20% reduction in their scheduled advances, starting that month, with its leaders taking larger reductions than that. Income partners, associates and allied professionals and staff with salaries of $75,000 or more in the U.S. will have their salaries reduced by 15% starting on May 1, the firm said. Salaries near $75,000 will not be decreased below that amount. The firm said it had also implemented a presumptive hiring freeze and canceled or deferred as much discretionary spending as feasible.
Kelley Drye in April said it will reduce draws for equity partners by up to 20% and cut salaries by 10% for all employees making more than $100,000.
Latham in April said that the start date of its summer associate program had been pushed back until at least June 1, but that it will honor its full financial commitment to impacted students.
Linklaters in April said it will not issue partners their next distribution, which was set to be in June. The firm is also freezing hiring and delaying its salary review process for six months and delay some of its bonus payments.
Loeb & Loeb in April said it will delay its quarterly April distribution to its capital partners until July, and that it will cut those partners’ monthly draws by 20%. Other lawyers and senior staff at the firm will take 15% pay cuts and the rest of the firm’s employees will see 10% reductions.
Lowenstein Sandler in April said it will delay equity partner distributions.
Marshall Dennehey in March said it will suspend its 4% employer match to 401(k) contributions from May 1 until the end of 2020.
McDermott Will & Emery in April said it had decided to reshape its summer program into an optional two-week virtual boot camp taking place from July 13-24. Impacted students will receive a stipend and offers.
Mintz Levin in April said it has reduced draws to partners and that it will cut base pay for associates by 10% and cut salaries for professional staff earning more than $75,000 and paraprofessionals by 5%. There will also be some reduction in bonuses, it said.
Munger Tolles & Olson in April said its summer program will begin in mid-June and will last for six weeks, and that it will pay summer associates who complete the program for the entire time they originally planned to spend at the firm.
Norton Rose Fulbright in April said that it has asked attorneys and staff to accept a temporary reduction in compensation and that it had “made discrete reductions” in its U.S. workforce.
Ogletree in April said it will eliminate its summer associate program and that it will not pay the 36 students who would have been summer associates. It also said it furloughed some employees, who will receive healthcare benefits until May 31, and reduced hours for others. It later said it would reduce attorney salaries by 15%, and that equity shareholders are expected to receive a 20% reduction in compensation. Staff who earn $100,000 per year or more will take a 10% pay cut, with no reductions for those earning less than $100,000.
Orrick in April said its 2020 associate class would now start in January 2021, or “after postponed bar exams.” It said its summer associate program will be conducted remotely and has been scaled back to five weeks, but that second-year law students will be given permanent offers and first-years will receive return offers for the following summer. For the most part, career associates’ salaries will be cut by 5%; associates’ by 10%; and managing associates, senior associates and many of counsel’s by 15%, it said. Staff salary cuts will range from 1% to 15%, with some staff being asked to work reduced hours for four months starting on May 1, and secretaries cutting their schedules to four days per week. “Top contributing” employees – both lawyers and staff – will be eligible for a special award to “make them whole,” which will be separate from the firm’s annual bonus, the firm said.
Pryor Cashman managing partner Ronald Shechtman said in March that the firm furloughed some associates indefinitely.
Quarles & Brady in April said that it had temporarily adjusted partner distributions and draws, and compensation for all attorneys and staff. It also furloughed a small number of employees, canceled its summer associate program and adjusted its expense budget for the remainder of its fiscal year.
Reed Smith in March said it will “slow partner cash distributions.” In April the firm said it reduced base pay for counsel by 10% for the next three months and that it will reduce associate pay by 15% for four months, starting in May. It also in April said it shortened its summer program to five weeks and was prepared to conduct it remotely if necessary. The firm also delayed its first-year associate start date until January 2021, but said in April that it will provide those impacted with health insurance and a stipend in autumn 2020 and pay for their bar exam and study costs.
Rivkin Radley in March said that its partners did not receive any compensation for that month and that it will temporarily reduce compensation for all attorneys and staff by 20%.
Seyfarth Shaw in April said it has furloughed 10% of its employees in the U.S., including some attorneys, for 90 days, but that it will pay the full cost of affected employees’ health coverage. On April 1, the firm reduced equity partner monthly draws by 20% and on May 1 all other U.S.-based attorneys will take a 10% pay cut. Most staff will take stepped pay cuts, with a 10% reduction on earnings above $150,000; 5% for earnings between $150,000 and $60,000; and 0% on the first $60,000 of earnings, the firm said. It also pushed back its start date for its first-year associates until January 2021. It canceled its formal summer fellow program but said that impacted students would get offers and a stipend.
Sheppard Mullin in April said it has furloughed 33 of its 823 staff who cannot perform their jobs at home. Furloughed employees will receive full medical benefits and the firm’s partners and senior management have contributed funds to provide them with their full equivalent take-home pay while they wait for unemployment benefits to kick in, the statement said. The firm has also shortened its summer associate program to five weeks, and it will now start on July 6, with all impacted students to receive offers.
Shook Hardy & Bacon in April said it will delay or defer various operating expenses, defer some partner distributions, reduce partner draws, introduce pay reductions and temporarily furlough some employees.
Snell & Wilmer in April said that starting in May its partners’ monthly draws and the base salaries of its other attorneys will be reduced by 10%. Administrative professionals will take pay cuts ranging from 1% to 10% depending on their annual salaries. The firm has also furloughed some employees who cannot work from home or whose work has significantly declined because of the pandemic, but said it would continue to provide them health, life and long-term disability insurance.
Stoel Rives in April said that it will reduce partner distributions by 20% effective April 1. It said that starting May 1 it will institute a 20% pay reduction for associates, staff attorneys and of counsel attorneys. Also on May 1 it will implement tiered hourly reductions for staff with corresponding pay reductions: 5% for those earning less than $75,000; 10% for those earning $75,000-$100,000, 15% for those earning $100,000-$150,000 and 20% for those earning over $150,000, it said. The firm furloughed approximately 10% of staff members beginning April 17 for at least 90 days, though impacted staff will not lose their benefits. The firm said it would freeze hiring and spending, defer staff bonuses and eliminate associate bonuses based on hours.
Sullivan & Worcester in April said it furloughed a few staff members, who could not do their job at home, for 90 days, but is continuing to provide them benefits. It said it will cut salaries by 5% for employees who make more than $66,000 a year and reduce monthly draws for non-equity partners by 10% and for equity partners by 20%.
Taft Stettinius & Hollister in April said that all partner draws have been reduced by 25% and that it reduced attorney headcount by 1.4% and staff headcount by 3.5%.
Venable in April confirmed that all employees with salaries above $400,000 will take a 20% pay cut on all compensation plus 10% on compensation above $400,000. The firm will also introduce cuts of 20% for salaries between $400,000 and $190,000; 15% for salaries between $189,999 and $120,000; 10% for salaries between $119,999 to $75,000; and 5% for salaries between $74,999 and $60,000. The firm will also furlough some staff but it will continue to pay for their medical and dental benefits.
Vinson & Elkins in April said it has delayed the start date for its summer associate program from May until no earlier than June 15.
Womble Bond Dickinson in March said it furloughed and laid off some U.S. employees and temporarily cut pay for at least some of its remaining staff and attorneys by 10% or less, with lower levels of compensation reduced by smaller percentages.
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