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Welcome to legal profession’s 2020 recession, courtesy of the coronavirus. We’ve already seen Biglaw firms announce 10 percent pay reductions, 25 percent pay reductions, and partners slow or eliminate their draws entirely. What could possibly come next?
According to multiple sources, Rivkin Radler, a midsize firm that ranked #211 on the latest NLJ 500, announced a series of cost-cutting measures on Monday afternoon. Specifically, the firm will be slashing compensation by 20 percent across the board, among other financial cuts. Here’s an excerpt from the firm’s memo on the adjustments (available on the next page):
In order to protect the long term health of the Firm for everyone, effective with the payroll period ending April 16, all attorney compensation will be reduced by 20%. Further, all payments pursuant to the fee participation program and the attorney recruitment program are suspended. These measures will last until such time as the Firm is back in its offices and operating at full capacity.
Rivkin Radler also plans to cut staff salaries by 20 percent. As our tipsters note, no mention was made of cuts to partner compensation.
We reached out to Rivkin Radler, and the firm’s managing partner, Evan Krinick, confirmed the steps taken to keep the firm in the black. According to the firm’s statement, the move will “ensure the long-term well-being of [the] firm”:
Like most businesses, we are working to address the complex challenges presented by this global pandemic. Foremost in all of our minds is the health and safety of our families, colleagues and friends. For business, the reality is that the temporary closure of the courts has decreased our workload in our litigation groups and the general economic downturn has impacted our commercial transactional practices. To ensure the long-term well-being of our firm, our partnership has elected to temporarily reduce compensation for all attorneys and staff by 20%. We fully expect to restore all to their regular compensation levels as soon as the present crisis abates.
Good luck to Rivkin Radler as the firm weathers the storm that is COVID-19.
Which firm will be the next to turn to salary reductions as a way to avoid layoffs?
If your firm or organization is slashing salaries, closing its doors, or reducing the ranks of its lawyers or staff, whether through open layoffs, stealth layoffs, or voluntary buyouts, please don’t hesitate to let us know. Our vast network of tipsters is part of what makes Above the Law thrive. You can email us or text us (646-820-8477).
(Flip to the next page to read Rivkin Radler’s compensation memo in full.)
Staci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.