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Just like that, another firm bites the dust when it comes to COVID-19 salary cuts.
Sources tell us that Am Law 200 firm Kelley Drye has instituted firmwide salary cuts to ensure its “economic vitality” during the upheaval that’s been caused by the coronavirus crisis. Kelley Drye is the 179th highest grossing law firm in the world, but as we know all too well, high revenue is no match for a pandemic.
Here’s an excerpt from an email (available in full on the following page) that all Kelley Drye employees recently received from James Carr, the firm’s chairman:
The economic impact of the coronavirus crisis is beginning. Our clients are focusing on their business needs first, as is expected, and we are seeing a slowdown in payment of our invoices. As a result, and given the uncertainty around when we might return to our offices and when all businesses will be operating at full capacity, Firm management will take the following steps:
• Equity partners’ draws will be reduced on a proportional basis by as much as 20%, effective April 30;
• There will be an across-the-board, prospective salary reduction of 10% for all other lawyers and employees earning over $100,000, effective May 15, 2020. Please note that no one subject to this reduction will be cut below $100,000 annually; and
• The July 1 administrative staff salary increases will be postponed.
Kelley Drye did not immediately respond to requests for comment. We will update this article if and when we hear back from the firm.
In his memo, Carr notes that these salary cuts come in addition to the firm’s earlier cost-cutting measures, including shortening its summer program, deferring the start date of their incoming first-year associates, and postponing the hiring of non-essential employees. Perhaps most importantly, according to Carr, “We hope to be in the position to revisit and possibly restore salaries to pre-COVID levels at some point in the future, once the crisis abates and our practice returns to its normal rhythm.” On that note, one distraught source said, “They’re never going back.” Ouch.
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.