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As we get deeper into the thick of the economic upheaval that’s been caused by the coronavirus outbreak, Biglaw firms have been faced with a cruel sort of choose your own (mis)adventure game. From cuts to partner draws and distributions, associate and staff salary cuts, benefits cuts, employee furloughs, and employee layoffs, everything is on the table.
Which will your law firm choose?
We recently heard about an Am Law 200 firm that seems to have taken a bit of a smorgasbord approach to its pandemic reductions. We’ve been told that equity partners at Hodgson Russ almost immediately reduced their draws by more than 30 percent as soon as they had to leave the office environment to do work. Sources say that the following cost-cutting measures at the firm will take effect next week:
- Compensation for all employed attorneys will be reduced by 15 percent;
- Compensation for all executives/director positions will be reduced by 15 percent;
- Compensation for all other employees will be reduced by 15 percent;
- Employees with little/no work who cannot work remotely will be furloughed; and
- All 401(k) matching for employees are indefinitely suspended.
Managing partner Rick Kennedy confirmed these measures, noting the following:
While partner compensation was immediately reduced by more than 30% at the outset of the pandemic, we have, until April 13, kept our entire work force in place at full compensation. We view today’s steps as measured, prudent, and necessary to remain resilient for our clients and colleagues. We hope the pandemic subsides and the world returns to some sense of normalcy very soon. In the meantime, all of our attorneys are fully operational and working remotely. Our clients remain of paramount importance, and clients should expect the same excellent service they are accustomed to despite the current challenges.
We wish the best of luck to the firm as they work through these trying times.
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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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.