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Did you think that maybe, with reports that we are apparently at the peak of COVID-10 cases, that we should be (slowly) returning to normal soon? Well, I believed in Santa Claus until 5th grade so, who am I to judge wishful thinking?
In any event, the COVID-19 austerity measures are still going strong in Biglaw. The latest firm we have intel on is Brown Rudnick, ranked 141 is the most recent Am Law 200 rankings. We’ve heard from multiple tipsters that there were “deep cuts” and that associate furloughs have been going on there, but as a tipster noted, “these have all been stealth and there is a lot of confusion about who is out. It is being touted as merciful.” Another tipster noted that the confusion extended beyond the furloughs:
“Now this morning they announced furloughs of employees (although it’s unclear who exactly has been furloughed, I know of several associates who have been furloughed). And they are cutting pay for all attorneys by at least 10%, although exact amounts are unknown.”
Other associates have placed the amount of the salary cuts at 25 percent through August. When we reached out to the firm, they clarified that the pay reduction for associates is 7.5 percent on an annualized basis (which, I’m no math whiz, sounds a lot like a 25 percent cut for only a few months of the year). Associates also report a delay on their 2019 bonuses which were supposed to be paid (in full) in March:
Unfortunately, our bonuses are paid in March because we are on a fiscal year ending in Feb., which coincided with the lockdowns. They delayed the bonus process and will be paying 1/3 this month with the remainder some time later this year (or early next). All the associates think the remaining 2/3 won’t happen or that they will just condense it into next year’s bonus and eliminate the 2020 “fiscal” year.
Let’s hope associates see the remainder of the 2019 bonuses as soon as possible.
Partners are also seeing a cut in their draws, though the firm will not comment on specific figures for equity draws.
When reached for comment, firm Chairman and CEO Bill Baldiga had this to say:
“The unprecedented COVID-19 pandemic has impacted law firms like many other businesses. Brown Rudnick has taken expense management steps during these uncertain times. The firm is dedicated to its lawyers and staff and has implemented a proactive plan to provide solid financial standing for the firm that does not involve layoffs. The firm continues to operate uninterrupted for our clients, and we hope the global work disruption will be a short term impact. We have positioned the firm’s diverse practices for future success.”
Good luck to the firm as it tries to weather the COVID-19 storm.
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).
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Kathryn Rubino is a Senior Editor at Above the Law, and host of The Jabot podcast. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).