Category: News Feeds

As another hour goes by, another Biglaw firm announces that it’s taking cost-cutting measures to alleviate the pressures that have been foisted upon it by the worldwide coronavirus outbreak. From layoffs to furloughs to salary cuts, we’ve seen it all as COVID-19 continues its devastation of the legal profession.

Sources say the latest firm to announce salary cuts is Arent Fox, which has reportedly reduced salaries for counsel by 30 percent and associates by 25 percent. These are the largest pay cuts we’ve seen yet. This information was given to employees by phone, so no memo exists. We’re told that equity partners will be taking reduced distributions, but percentages were not disclosed. One unhappy associate noted that while the calls about the salary cuts stressed the importance of everyone at the firm being in this together, “associates and counsel seem to be a little more in this than others.”

We reached out to Arent Fox for confirmation of the salary cuts, and a spokesperson said these measures were taken in order to put the firm in a “strong position”:

As a result of the economic disruption caused by COVID-19, Arent Fox has made temporary adjustments to its business operations. We recognize the biggest mistake we can make is to underestimate the scope of this pandemic. In response to the economic slowdown, the firm is instituting a temporary pay cut for all attorneys, professionals, and staff.

The range of legal issues, regulatory challenges, and policy changes unfolding during this crisis are historic. Our goal is to put Arent Fox in a strong position so that we can continue to provide critical, first-rate service to our clients as we help them navigate these challenges.

We hope this means the firm is able to avoid layoffs or furloughs if this pandemic goes on for longer than expected.

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).

If you’d like to sign up for ATL’s Layoff Alerts, please scroll down and enter your email address in the box below this post. If you previously signed up for the layoff alerts, you don’t need to do anything. You’ll receive an email notification within minutes of each layoff, salary cut, or furlough announcement that we publish.

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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.

For Carl Icahn, the COVID-19 epidemic looked like an unprecedented opportunity to combine his twin passions of making a lot of money while making other people miserable. He could hardly contain his excitement. Paul Singer may be unilaterally disarming in the face of the unprecedented dislocations and difficulties wrought by coronavirus, but if target companies want to see Icahn’s peaceable side, they’re going to have to let him win.

Unfortunately for Icahn, some of his proxies don’t have his principled stick-to-it-iveness (or enough toner to print sufficient money to make up for a 50% drop in market cap).

In a normal world, April 1 is April Fools’ Day, but this year, there is nothing to joke about, no pranks, no practical jokes. Nada, zip, zilch. Even though we all need a good laugh (I can always watch again for the umpteenth time the movie Airplane!) we certainly don’t want to do it at anyone’s expense.

The author Annie Dillard says that “how we spend our days is, of course, how we spend our lives.” So, how are you spending your days these days?

Let’s look at a few examples. A Brooklyn lawyer is suing Gov. Andrew Cuomo and the State of New York for purportedly violating his constitutional right of free speech, right to travel, and free exercise of religion. Gee, I had no idea that attorneys were immune to Covid-19 and thus don’t have to take the steps that everyone else in the world needs to take in order to stay safe. If that is indeed the case, then no attorney needs to be staying at home and can bill as many hours as inhumanly possible since there seems to be no reason why not. Yes, I know that lawyers walk on water.

Then there’s the judge who quite properly benchslapped lawyers for bothering the court with trivial BS at a time when lives and livelihoods are in jeopardy. Not only do these lawyers need to know how to define “emergency,” and what qualifies as a true emergency and what is not, lawyers who don’t know how to play nice while people are sick and dying should be woodshedded. And if you don’t know what that term means, look it up right after looking up the word “emergency.” That would be a very interesting hearing to observe from a safe distance. Judges shouldn’t need a pandemic to tell lawyers that they need to pick up their marbles and go home for a while.

Did you hear the one about the Nebraska attorney disbarred for assaulting his elderly parent? So much for “honor thy father and mother.” I wonder how this attorney will now spend his days.

It’s always refreshing when one of us ATL columnists is candid enough to say he was wrong. Kudos to Mark Herrmann in his most recent post for admitting that he didn’t see the pandemic coming. More kudos to Mark for saying in print what many of us are thinking, but not voicing yet. It’s going to be a terrible year for law practice, and I think it will take into 2021 at the earliest for things to start to right themselves. We’re starting second quarter today.

Yes, things will start up again, exactly when is to be determined, but I don’t think the practice will ever be the same as it was, let alone the world as we knew it. As lawyers and clients realize that they don’t need to meet face to face, remote lawyering will become even more popular; it already is among younger cohorts. No more traveling to meetings with the attendant expenses; no more hanging around in a courtroom for hours waiting for your case to be called, no more meetings that are often a waste and just an excuse to bill time. We will take off some, if not all, of the shackles that has chained us to our desks.

Do we need all that space? Not really. Do we need the awe-inspiring lobby and conference rooms that are the size of Rhode Island (sorry, Rhode Island, I don’t mean to insult you)? A lot of the trappings that were important P.P.E. (pre-pandemic era) just don’t have the cachet anymore. Layoffs have already started (see ATL’s website for the latest), and partner compensation has already started to take a hit as well.

For newbies and associates who have been doing transactional work, if you are interested in seeing the back end of deals — the workouts, the forbearances, the business failures, and even the bankruptcies — then now is your chance to raise your hand and learn another area. See how deals come apart, rather than how deals are made. My clients who did special assets workouts (bankspeak for problem, troubled, or “in the toilet” loans) had wide latitude to be creative to get paid, however it could be arranged. So, for those of you who haven’t yet experienced a downturn, it will be a bumpy ride, but well worth it for the knowledge gained. You will learn more from what went wrong than what went right. Invaluable expertise for transactional lawyers.

In the overall scheme of things, what’s most important? Your health and the health of your loved ones. Losing anyone in this crisis is horrible; having to say good-bye by FaceTime or such other noncontact method is even worse. It’s unspeakable and the cruelest, but now the only way, to say good-bye.

Don’t assume that you will not be a victim of COVID-19; that’s assuming facts not in evidence. I go back to Annie Dillard’s words and ask you to look at how you are spending your days. A friend of mine on the appellate bench here in California said it best: “be safe and touch nothing but your loved ones,” if you are lucky enough to share a household with them. They may annoy the hell out of you in different times (and probably even annoy you now), but no matter.

Dillard also says that “There is no shortage of good days. It is good lives that are hard to come by.” Right now, there is a shortage of good days. Will good lives also hard to come by?

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Jill Switzer has been an active member of the State Bar of California for over 40 years. She remembers practicing law in a kinder, gentler time. She’s had a diverse legal career, including stints as a deputy district attorney, a solo practice, and several senior in-house gigs. She now mediates full-time, which gives her the opportunity to see dinosaurs, millennials, and those in-between interact — it’s not always civil. You can reach her by email at oldladylawyer@gmail.com.

In times of upheaval, the Above the Law tipster network really shows its strength. Biglaw firms may not want to publicize the cost-cutting measures the coronavirus has forced them into, but it is vital industry information. Transparency is key, always, but particularly in hard times. And when the layoffs and furloughs and salary cuts started happening, our tips line started blowing up. For that, we thank you.

So, here’s the latest scoop from tipsters: the Am Law 200 firm Curtis (f/k/a Curtis, Mallet-Prevost, Colt & Mosle) has slashed associate salaries by 25 percent. Those are some of the largest cuts we’ve seen to date.

We reached out to the firm and a spokesperson was able to confirm that, like a growing amount of their peer firms, they’ve instituted these cost-cutting measures.

Yes, Curtis is taking some steps similar to those reported by other firms in response to COVID-19.

Hopefully, this means the firm can avoid layoffs.

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).

If you’d like to sign up for ATL’s Layoff Alerts, please scroll down and enter your email address in the box below this post. If you previously signed up for the layoff alerts, you don’t need to do anything. You’ll receive an email notification within minutes of each layoff, salary cut, or furlough announcement that we publish.

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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).

Joe and Kathryn check in from the Above the Law bunker to discuss law schools and the virus. While many schools quickly adopted pass/fail grading options others have held out, hoping to maintain some sense of normalcy. Are there really employers who will look back at Spring 2020 grades and think they’re informative?

On March 19, Hobby Lobby’s CEO David Green sent a letter to his “Hobby Lobby Family” thanking “God who will Guide us through this storm” and promising that “the Company’s leaders are doing all they can to balance the need to keep the Company strong and the needs of employees.” Green, whose net worth is north of $6 billion, said that his wife Barbara, “the prayer warrior in our family,” had consulted Jesus, who assured her that all employees should continue to report to work, health crisis be danged.

Less than ten days later, Business Insider reports, Hobby Lobby fired thousands of hourly employees via email, canceling their health insurance during a pandemic.

“We hope this layoff will be temporary, but we cannot predict how COVID-19 will affect Company operations,” employees were informed. “We encourage you to file for state unemployment benefits. We appreciate your service to the Company.”

Yours in Christ, etc.

“The managers have been instructed not to warn employees until it happens, and to not tell other stores at risk of closing down,” one Hobby Lobby manager told BI. “[This makes] it harder for employees to receive aid because it will come out of nowhere and they will go from ‘report back to work in a few weeks’ to ‘you’re fired.’”

But fear not, crafters, because “the Company” has figured out a way to get employees back to work despite those pesky stay-at-home orders meant to stop the spread of disease. What if Hobby Lobbys are an “essential business” because they sell fabric which could be used to make face masks? Or vital office supplies to keep American business humming with so many people working from home? Or … heck, managers just need to look at their states’ closure orders, and find some provision they can hang their hats on.

BI got the March 28 memo to store managers from Hobby Lobby’s VP of store operations Randy Betts entitled “Re: Talking with Local Authority”:

There are emergency orders in effect throughout the country. These could be issued by the state Governor, or the Country, or the city, and the federal government. In stores that are open, and there is an emergency order issued where that store is located, the DM needs to guide store management in how to respond and communicate if they are visited by a local authority that asks why we are open.

You and the DM must identify the specific reason within the emergency order that provides that store permission to be open.

The reasons could be: because we sell educational materials, because we sell products for home based businesses, or because we sell materials to make PPE (personal protective equipment.) Or other reasons that can be identified in an order. You must inform the manager why we are allowed to be open.

However, if visited by an authority the most important thing the manager must convey is a respectful tone. If they are told they need to close, it’s yes sir, yes ma’am, I will call my boss right now.

Yes, sir, just slap a sign in the window advertising “PPE Mask supplies, Educational Supplies, Office supplies, and various components for at Home small businesses,” as one North Carolina Hobby Lobby did, and that mandated closure is worth less than Christmas lights at Easter!

BI phoned stores around the country and found that “all 19 Hobby Lobby locations in Ohio were open as of Monday afternoon, as were 17 out of 20 stores in Wisconsin that were still listed as “temporarily closed” on Google.” At a store in Wisconsin which had been shut down by the police Monday, employees told BI that employees were “working on projects.”

Adding insult to injury, BI reports that the purveyor of essential pandemic crafting supplies isn’t even able to restock their shelves because the Hobby Lobby warehouse in Oklahoma is closed. And with so many hourly employees cut, “the Company” isn’t able to adequately clean stores to prevent the spread of COVID-19.

“We also don’t have the employees to do the extensive cleaning that they say we are doing on the website because payroll keeps telling management to cut hours,” one Ohio employee told BI. “I’m just very anxious about this whole thing and don’t understand why no one is helping us employees out with this situation.”

Well, not “no one.” Rest assured that “prayer warrior” Barbara Green is on the case.

In leaked letter, Hobby Lobby prepares to lay off employees and slash salaries to cut costs in states with mandated store closures due to the coronavirus [BI]
Leaked memo from Hobby Lobby reveals execs told managers to insist the company is ‘essential’ if law enforcement asks why stores are still open in states with coronavirus-related lockdowns [BI]
Hobby Lobby quietly reopened stores in at least 2 states, defying coronavirus-related shutdowns and prompting police intervention [BI]

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Elizabeth Dye lives in Baltimore where she writes about law and politics.

When it comes to scoring public relations points off of the troops, UVA Law is right in there. But when it comes to actually supporting the troops during a national emergency, the administration pops its proverbial collar and looks the other way.

Frannie Skardon of the Class of 2022 serves in the NY National Guard and was called up by Governor Andrew Cuomo on March 17. At the time, the mass migration to online classes hadn’t started yet so she wasn’t sure how it would work out, but in due course UVA joined the rest of the civilized world in offering online courses and her unit allotted her 6 hours a day to commit to law school studies so she’s not seen any interference with her ability to attend class or participate in class discussion.

One would expect the school to cook up a glowing press release touting the member of the law school community saving lives and serving her country while still earning her law degree. You know, like Columbia already did.

But UVA Law isn’t here for any of that “common sense.” As Skardon explains in her petition to fellow students, after she informed the school that she had been activated, the administration responded:

To my surprise, the administration responded to my email and stated that I am in violation of Academic Policy I.H., which deals with employment while attending Law School. This policy states that “students may not engage in employment in excess of what is compatible with a full-time commitment to the study of law.” As a result of my unit’s activation, the administration has determined that I cannot complete the remainder of the semester.

The school has gone so far as to say they won’t issue a waiver of their dogged commitment to this nonsense because Skardon is being paid by the Army while activated. They want her to retake all of her classes in Spring 2021 and throw off her whole law school track even though she’s empirically keeping up with her studies, blunting the only semi-rational argument UVA can cobble together.

Skardon did not reach out to Above the Law, but approximately every other UVA student did in the span of about 30 minutes. It’s the kind of outpouring that gives you hope.

UVA Law, meanwhile, has given her a total of 24 hours to appeal to the Academic Review Committee. 24 hours?!?! In a time of crisis, only the most arbitrary of exploding deadlines will do!

If you’re one of those people who see how foolish this is — which I have to assume is most of you — there’s a petition available here. According to the petition, Skardon would also “appreciate any letters of support sharing why you think an exception should be granted and how COVID-19 has impacted your life.” I’ll go one better and make a special appeal to any veterans out there among lawyers or law students who can speak to what this kind of snub means. You can address these to the Academic Review Committee… Jason Dugas is apparently the chair.

UPDATE: Because I’ve not spoken with the student because she’s not talking to media, the original version of this article included her email because it was in the petition — that’s been changed.

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Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.

Federal Communications Commission Chairman Ajit Pai unveiled plans for telehealth funding on Monday. His proposal would set aside $200 million to help healthcare providers purchase technology and broadband connectivity for telehealth services.

Congress appropriated $200 million to the FCC for this effort last week, as part of its $2 trillion Covid-19 relief package under the CARES Act. The program still must be approved by the FCC’s five-person commission.

Federal agencies have pushed to loosen telehealth restrictions in an effort to minimize transmission of Covid-19. Last week, the Centers for Medicare and Medicaid Services loosened limitations on telehealth reimbursement, allowing seniors to receive telehealth appointments at home. Many private insurers have also been directing members to telehealth services.

Health systems that already have telehealth systems in place have been able to quickly repurpose those tools to care for patients with chronic conditions that might be wary of walking into a hospital right now. They’ve also been rolling out digital tools to triage patients, keeping those with symptoms resembling Covid-19 away from other patients with urgent conditions.

But for practices that are implementing these tools for the first time often face difficulties with varying state regulations and the cost of implementation. Hospitals and outpatient practices especially face losses as elective procedures are cancelled to reserve space and equipment for Covid-19 patients.

Under the program, healthcare providers would submit streamlined applications to the FCC. Those selected would receive full funding for eligible telehealth services and devices. The FCC would continue to award funds on a rolling basis until the $200 million fund runs out or the pandemic ends.

“As we self-isolate and engage in social distancing during the COVID-19 pandemic, telehealth will continue to become more and more important across the country,” Pai said in a news release. “Our nation’s health care providers are under incredible, and still increasing, strain as they fight the pandemic. My plan for the COVID-19 Telehealth Program is a critical tool to address this national emergency.”

Pai also is seeking approval for a separate pilot program that would make funds available over a longer term to help offset the cost of telehealth services. The program would designate $100 million for connected care services provided to low-income patients and veterans.  It’s proposed as an extension of the Universal Service Fund, which is normally used to provide internet and cell service to rural areas, schools and low-income households.

If approved, it would cover 85% of the costs needed for broadband connectivity and IT services needed to provide telehealth to the intended patient group.

Photo Credit: Chip Somodevilla, Getty Images

Layoffs and furloughs and salary cuts, oh my!

It’s been one of those days. The ravages of the novel coronavirus continue across the U.S., impacting both the health and financial stability of the country. Law firms — even those that consider themselves well-positioned — are feeling the pinch.

So, what’s the latest economic downturn news in the legal industry?

Fifteen percent salary reductions, that’s what’s going on at IP boutique Fross Zelnick. And partners are taking an even bigger (though the specific threshold is undisclosed) hit to their payday. The firm has framed the cuts as temporary, but as they say in an honest firmwide email, no one is able to predict at this point when we’ll return to normal.

Read the firm email below.

Hopefully, these measures mean the firm won’t be forced to layoff any employees.

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).

If you’d like to sign up for ATL’s Layoff Alerts, please scroll down and enter your email address in the box below this post. If you previously signed up for the layoff alerts, you don’t need to do anything. You’ll receive an email notification within minutes of each layoff, salary cut, or furlough announcement that we publish.

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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).