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What’s the first thing that comes to mind when you think of how COVID-19 has affected the legal profession? Salary cuts, obviously — and furloughs, and layoffs, but mostly salary cuts. Today, we’ve got yet another firm that’s decided to slash salaries, at least for the time being, thanks to the coronavirus crisis.
Davis & Gilbert, a firm that was recently ranked by Vault as the #6 best midsized firm in New York, will be cutting salaries across the board.
These cuts will soon be coming to Davis & Gilbert, among other expenditure reviews:
- Partner distributions: Substantially reducing the base draw amounts for a number of partners so that all partners now have the same base draw amount, and temporarily limiting partner distributions to 75 percent of that base amount. We also plan to defer the mid-summer distribution when partners would typically receive an advance against their year-end profit allocations.
- Salaries for associates, senior attorneys and counsel: Reducing salaries by 15 percent, effective May 4.
- Salaries for staff and managers: Reducing salaries for those earning over $150,000 per year by 15 percent; reducing salaries for those earning between $70,000 and $150,000 by 10 percent. All effective May 4. Salaries below $70,000 per year will not be adjusted.
On the bright side, we’re told that the firm hopes to treat these cuts as “temporary deferrals” and plans to make employees whole in the future if they’re able to do so.
Davis & Gilbert’s Executive Committee released the following statement:
While our firm experienced increased revenue from 2019 and a strong first quarter, we also have seen a marked decline in overall billable hours and a slowing of collections since New York state’s ‘stay-at-home’ order went into effect in mid-March. Many of our departments, including employment, benefits, insolvency and real estate, have remained busy over the past few weeks, but most of the corporate transactions that were in the works have been put on hold, and many other client projects have stopped or slowed down significantly. We need to anticipate and plan for reduced billable hours for the second and third quarters of this year and lower collection rates for the balance of the year. As a result, our Executive Committee has decided to take cost-cutting measures it believes are necessary and prudent to best guide the firm through this difficult period. We do not take these actions lightly. However, it is our hope that by taking them now, we can avoid furloughs of staff or attorneys.
Davis & Gilbert’s client relationships are wide, deep and strong, with many relationships going back decades. Our firm has weathered many storms in its 110-year history, and we are confident we will weather this one too. We are optimistic that after the lockdown ends and business comes back, we will likely see a burst of activity and new opportunities.
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.