(Image via Getty)
As days and weeks go by in these uncertain times brought about by the pandemic, Biglaw firms continue to monitor and reassess their financial situations. Many that put precautionary austerity measures into place are now taking a step back adjusting their previously announced reductions in salary (and in some cases, staff).
The latest firm to roll back salary reductions is K&L Gates, another member of the billion-dollar club that placed 39th in the Am Law 100, with $1,026,626,000 in 2019 gross revenue. Back in April, the firm reduced salaries across the board, with equity partners seeing a 20 percent reduction in scheduled advances, and firm leaders taking even larger reductions. Income partners, associates, and allied professionals and staff were subject to a 15 percent reduction in their salary provided their income didn’t fall below a $75,000 floor (with some regional variations).
Now, because the firm has “performed better than expected” in 2020, those reductions are being reduced. Here’s a relevant excerpt from a memo (available in full on the next page) sent by Jim Segerdahl, the firm’s global managing partner:
- Our equity partners will continue to lead in this regard, as has been a driving principle from the outset. Instead of the previously imposed 20% reduction in their normally scheduled advances each month, starting at the end of September the advances will be 15% less than normal, with our Management Committee personnel continuing to take larger reductions.
- Most other personnel across the Firm (Income Partners, Associates and Allied Professionals/Staff) previously were taking a 15% reduction in their annualized salary (as permitted by and in accordance with local laws and necessary procedures where required) to the extent they have an annualized salary at or above a pre-determined floor. Given the Firm’s strong performance to this stage, this Covid-reduction will be reduced by 33% to 10% going forward starting with the work period commencing at the beginning of September.
- The pre-determined floor will shift upward from $75,000 to $100,000, again subject to appropriate regional differences. Personnel whose pre-reduction compensation was between $75,001 and $100,000 will return to their pre-reduction compensation as of September 1.
Remember, the firm is still holding open the door for bonuses in light of “extraordinary performances or contributions” during the coronavirus crisis, and in this memo, Segerdahl reminded everyone that because the firm’s future depends on everyone’s dedication, leadership “will not fail to recognize this and act accordingly.”
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).
Reed Smith Partially Walks Back Pay Cuts for Lawyers, Staff [American Lawyer]
Earlier: Another Am Law 50 Firm Has Salaries On The Chopping Block
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.