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It’s sure starting to feel like, eventually, COVID-19 austerity measures are coming to all law firms. For the last few weeks, Above the Law has been filled with news of Biglaw salary cuts, furloughs, and layoffs as the legal industry struggles to deal with the new economic realities.
The latest firm to announce a new normal is Baker Botts, ranked 58th on the latest Am Law 100. Just this morning, the firm announced salary cuts that “proceeded under the principle of ‘collective sacrifice.’”
In a firmwide email (available in full on the next page), Baker Botts Managing Partner John Martin laid out the specifics of the salary cuts — effective May 1 — that are designed to “avoid layoffs and preserve the income of our most vulnerable employees”:
To do this, our partners have agreed to compensation reductions to absorb the bulk of the financial impact expected from the pandemic. In addition, we have made the difficult but necessary decision to reduce salaries temporarily. Effective May 1, salaries for lawyers and staff will be reduced by the following amounts:
· Counsel: 20 to 30% (based on salary level)
· Associates: 20%
· Staff: 0 to 25% (based on salary level)
Staff making under $70,000 will be spared from the cuts.
The firm did leave open the possibility of interim bonuses for high performers:
In the meantime, the Firm will evaluate and potentially award interim bonuses to exceptional contributors, based on both individual performance and economic and Firm conditions. Associate and counsel eligibility will be determined based on contributions to our clients and Firm, including both utilization and exemplary client service.
When reached for comment, Martin had this to say about the austerity measures:
“The unprecedented financial stress on clients and the global economy due to the pandemic has prompted us to make the difficult but necessary decision to reduce salaries temporarily, with greater reductions at higher levels, to protect our firm, retain our extraordinarily talented team, and preserve the income of our most vulnerable employees.”
Additionally, the new incoming class of associates will be delayed until 2021.
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).