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Littler and Davis Wright latest to cut pay over pandemic

Caroline Spiezio  

Caroline Spiezio  

(Reuters) - Littler Mendelson on Tuesday said it had cut pay firmwide and made changes to its summer associate program, as did Davis Wright Tremaine, which also said it would furlough staff as the economic impact of the coronavirus pandemic has decreased demand for some of its practice groups and slowed collections.

San Francisco-based Littler, the largest U.S.-based law firm focused exclusively on labor and employment, confirmed on Tuesday that starting on May 8 it will cut compensation for shareholders and corporate management by 20%. Highly compensated non-equity shareholders and non-attorney senior-level administrative employees with compensation of more than $300,000 will have their salaries reduced by 15% starting the same day.
On June 5, employees earning between $200,000 and $300,000 will take a 13% salary cut and those earning from $100,000 up to $200,000 will take an 11% cut. Many employees earning less than that will have their pay reduced between 4% to 9%, but employees who cannot work from home will have their pay cut by 50%.
”Due to the financial uncertainty created by the COVID-19 pandemic, Littler has made the difficult decision to reduce compensation. This decision was not made lightly and was based on weeks of in-depth analysis and financial modeling to assess the potential impact of COVID-19 on our business and the best path forward,” the firm’s co-managing directors Tom Bender and Jeremy Roth said in a statement on Tuesday.
Legal industry blog Above the Law first reported the news on Tuesday.
Littler also said in the statement that it had shortened its summer associate program to six weeks, to start in June. The firm will likely postpone the start date for its incoming first-year associate class until Jan. 2021, it said. Littler has nearly 1,400 attorneys listed on its website.
Many legal industry experts predicted the coronavirus pandemic, which led businesses nationwide to shutter, sparking mass layoffs, would lead to an uptick in employment work.
In survey results released by the Association of Corporate Counsel earlier this month, 54% of in-house lawyer respondents said that their volume of labor and employment matters had risen due to the pandemic but that the increase hadn’t led them to outsource more work.
Other employment firms Ogletree Deakins Nash Smoak & Stewart and Seyfarth Shaw have already announced cost-cutting measures due to the pandemic.
Seattle-based Davis Wright on Tuesday also announced cuts, citing a slowdown in demand and collections. The firm said that its quarterly equity partner distributions will be reduced, with the expectation that equity partner compensation for the year will be at least 25% below budget.
The firm said that from May 2 through the end of the year it would reduce salaries by 15% for non-equity partners and c-suite level executives, by 12% for associates, counsel and of counsel and between 6% and 10% for staff based on salary level, with no reduction below $60,000.
Also on May 2, the firm will furlough approximately 8% of its staff, it said. The firm said it will continue to provide them with medical and other benefits.
Some other staff members will move to reduced schedules.
Davis Wright said its summer associate program has been shortened to six weeks and it will be conducted remotely.
The firm has more than 550 lawyers, according to its website.

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