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It’s only Tuesday and it’s already been a really long week for the legal profession. Thus far, we’ve seen associate layoffs and salary cuts, partners slowing their cash distributions, and firms pausing lateral hiring, all because of the coronavirus crisis. Some Biglaw firms are now scrambling to do all they can to avoid cutting personnel during a health crisis.
Marshall Dennehey, an Am Law 200 firm, has announced that effective May 1, it is suspending a 4 percent employer 401(k) match until next year. The firm’s matching program has an 80 percent participation rate among its 1,200 employees, but president and CEO Mark Thompson wouldn’t disclose how much money this financial maneuver would save — just that it wouldn’t be enough.
The Legal Intelligencer has more on what’s going on at Marshall Dennehey:
“We’re trying to offset these losses and live up to our family values and keep everybody together. This was a measure we could take as an alternative to layoffs and pay cuts,” [Thompson] said. …
Thompson and firm leadership have deep reservations about cutting head count or salaries. While suspending 401(k) matching will not fully cover the revenue the firm anticipates it will lose, Thompson said he does not anticipate firm layoffs. He said he prides the firm on having a family environment, and he loathes the idea of a laid-off employee losing their health insurance in midst of a public health crisis.
The response from employees, Thompson said, has been overwhelmingly positive in light of the cuts that have already been announced across the industry.
“We have received expressions of gratitude,” Thompson said. “People are scared and we’re trying to give them one less thing to worry about.” He expects the matching program will return to the firm in 2021.
Let’s hope Marshall Dennehey’s plan comes to fruition and the firm can save jobs.
In an Effort to Avoid Layoffs, Marshall Dennehey Halts Retirement Matching [Legal Intelligencer]
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.