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The hits keep coming for the biggest of Biglaw firms thanks to the COVID-19 outbreak that’s crippled the U.S. economy. From salary cuts to furloughs to layoffs, there’s no end in sight for what firms are doing to protect their bottom lines and their fates in the legal market.

Today, we have news from Seyfarth, a firm that posted $669,360,000 gross revenue in 2018, earning it the 59th place on the latest Am Law 200 ranking. Seyfarth is taking some cost-cutting measures that seem quite austere. A memo from the firm is available on the next page.

In addition to salary cuts effective May 1 — equity partners will reduce their monthly draws by 20 percent (which started on April 1) while all U.S. lawyers will have their pay reduced by 10 percent and staff will see their pay reduced in levels, with those who earn $60,000 or less unaffected (0 percent on the first $60,000 of earnings; 5 percent on $60,000-$150,000 of earnings; 10 percent on earnings over $150,000) — the firm will be furloughing 10 percent of its U.S. employees for a 90-day period. The firm says those furloughed will be staff and a smaller percentage of attorneys; sources say the firm has furloughed 180 staff and 50 attorneys. Seyfarth will pay the full cost of all furloughed employees’ health coverage during the time they’re away from the firm.

The firm has also canceled its “summer fellow” program, but says it will provide stipends and extend offers to all law students who expected to work at the firm to join Seyfarth as “senior fellows” in fall of 2021, with their official start date as associates pushed back to January 2021.

Here’s a statement from Pete Miller, Chair and Managing Partner of Seyfarth Shaw:

Like most other firms, Seyfarth has elected to take prudent steps to protect our firm’s long-term success. While difficult, we believe these actions will see us through this unprecedented event and safeguard our firm’s future. We already have taken numerous steps to reduce costs that did not impact jobs. And while our financial foundation remains strong, we are implementing these new measures now out of caution. The last two years were among our best ever, and our Q1 financial results were also strong. But after pragmatically assessing the pandemic’s impact on our clients and the broader world economy — and the challenges they foretell for the rest of the year — we had to make several additional tough decisions this week.

While the measures will primarily apply to our US employees, we intend to follow a consistent approach across our international operations. Our hope and goal is to return to normal operations as soon as possible, and our first priority is to bring our people back to work. Our firm has already been tested by the pandemic in extraordinary ways, and I am inspired every day by the many ways that our team members are supporting our clients and each other in this challenging time. That includes doing everything we can to keep the firm headed in the right direction and to protect its future.

On the bright side, Seyfarth has established an Employee Assistance Fund to support all employees, and their families, who have been impacted by COVID-19.

Best of luck to those who have been furloughed by Seyfarth during a pandemic.

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.

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.

I wrote in my most recent column that the COVID-19 crisis was forcing long-gestating changes to our industry to come into being. I focused mostly on the damage these changes would wreak on firms that have failed to prepare for the future. But it won’t be all gloom and doom once this crisis lifts. Many firms have been working hard at future-proofing their operations over the past few years and stand to be validated as the legal industry moves into a post-COVID world.

I spoke a few weeks back to the leader of a firm that’s been ahead of the curve, James Knight, CEO of Keystone Law. With 350 attorneys in the UK, and a presence in Australia, Northern Ireland, and the Isle of Man, Keystone is part of the growing ranks of the mid- and large-scale cloud-based or “distributed” firms. But it’s not just Keystone’s virtual platform that makes it unique. The firm also happens to be one of the world’s only publicly traded law firms.

Day And Knight

Keystone maintains far less of a real estate and staffing footprint than a traditional law firm, with only four formal offices and 40 support staff. It makes up the difference with a focus on infrastructure and technology. Given that real estate and personnel are typically the biggest expense items on any firm’s income statement, virtual outfits like Keystone are generally set up to weather the coming downturn in the economy better than firms with higher built-in expenses.

Although Keystone may have most of its attorneys and team members working from home, Knight told me that the firm makes deliberate efforts to maintain connections among its people. “We do a lot of events. We do a lot of parties, a lot of lunches, a lot of training sessions, that sort of thing, so people know each other very well.” Knight also said many lawyers plan vacations and activities together to solidify bonds. Keeping distributed networks of people engaged with one another can be like threading a needle, but it’s crucial to developing and maintaining a firm’s sense of culture. In today’s world, where remote working is the norm, firms that have been working for years on how to keep home workers connected have a leg up on most brick-and-mortar firms now trying to figure it out for the first time.

On The Exchange

Keystone’s structure made it uniquely suited to go public under the UK’s loosened laws regarding law firms sharing fees with nonattorneys. There was substantial fear and uncertainty in the UK in advance of those changes, similar to the fear and uncertainty bubbling through the American legal community as our bar associations and courts consider similar changes. Knight reports that the fears have, for the most part, not come to fruition.

Only six law firms, Keystone included, have gone public in the UK since the ownership rules changed nearly a decade ago. Per Knight, that’s because the traditional economics of a law firm align against outside ownership. “If equity is sold off to investors then there’s less money to be shared amongst the partners. It does suit organizations like Keystone because it’s very, very different.” Since Keystone’s partners make most of their money directly off their billings, rather than out of their share of the firm’s overall fortunes, they’re not losing out if the firm sells off some equity to build out infrastructure or reward its stakeholders. They make functionally the same amount.

By being on the vanguard of law firm capital structures, firms like Keystone are able to fund growth in ways not possible in most law firms where partners cling tightly to capital and generally want to maximize short-term returns. But the model also opens up new ways of surviving in the coming downturn. Traditional firms that find themselves in a cash crunch typically either have to make painful cuts or, in some cases, take out long-term loans. Keystone has all those options, plus the ability to sell off equity. Firms like Keystone, therefore, have more arrows in their quiver when major challenges arrive. These benefits, Knight says, are a fair trade-off for the increased administrative burden of reporting requirements.

Different Structures, Different Opportunities

But don’t let that virtual footprint fool you. Knight made it clear that Keystone doesn’t try to compete on cost, something Knight called “a very dangerous game to play.” Firms that gorge themselves on low-cost, low-margin work, like the now-shuttered Sedgwick, find themselves susceptible to shocks if that work ever dries up. Instead, Keystone competes for rainmakers, with the understanding the clients will follow where their attorneys move. Because of Keystone’s lower overhead, its attorneys keep a bigger-than-average percentage of the revenue they generate, which entices the work-generators to lateral over. Rainmakers at traditional firms who are confident in their books and not interested in contributing to a larger pot that might be drained by attorneys whose books have gone away are a key target for firms like Keystone in the coming years.

Looking Outside Of Ourselves

Forced evolution isn’t just happening in the legal world. As the nation’s schools close down for the academic year, learning has moved online at an unprecedented pace. I recently had the opportunity to take a live course via Zoom from MIT professor Hal Gregersen. Called The Innovator’s DNA, the course is based on Gregersen’s book of the same name, which I’ve written about before in this space. It was one of the first live courses MIT offered remotely, and would have been unthinkable at most universities just a few years ago. Yet, going forward, I have to imagine it will be a standard option.

One of Gregersen’s key points is that innovators spend time observing the world around them, seeking out fresh data and figuring out new ways to incorporate their findings into their own lives. As we spend the coming weeks, months, or years sitting in our homes, waiting out the worst of the virus, we have more opportunity and reason than ever to see the new and exciting things being done both in our industry and in the larger world. We would be remiss not to take advantage of this time.

Those who don’t look outside of themselves in the coming months will likely remain unprepared for whatever else the world throws at us next. Those who do may find their next great opportunity to thrive.

James Goodnow

James Goodnow is an attorney, commentator, and Above the Law columnist. He is a graduate of Harvard Law School and is the managing partner of NLJ 250 firm Fennemore Craig. He is the co-author of Motivating Millennials, which hit number one on Amazon in the business management new release category. As a practitioner, he and his colleagues created a tech-based plaintiffs’ practice and business model. You can connect with James on Twitter (@JamesGoodnow) or by emailing him at James@JamesGoodnow.com.

Will there be any live sporting events in the United States before the contemplated start of the preseason for the National Football League? That would mean games being played prior to August. The continued spread of coronavirus and increase in deaths has made it difficult for anyone to predict when there will be a return of sports, and one man may be looked at for guidance for a return to some normalcy.

Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, is of the opinion that the only way professional sports will be played in the summer or fall of 2020 is without fans in attendance and by keeping players in hotels. It is simply Fauci’s recommendation, as he has no authority outside of his research center, but he does have 50 years of public health experience, he has been tapped by President Donald Trump to assist with the coronavirus crisis, and he has advised every president since Ronald Reagan.

Basically, much of America has put its trust in Fauci.

“Have [the players] tested every single week and make sure they don’t wind up infecting each other or their family, and just let them play the season out,” said Fauci during an interview on the subject of allowing games to be played again.

During his April 16 press conference, Trump also indicated his belief that many sports leagues will start up again without fans and that there will be “made for television” sporting events. That press conference included the unveiling of a three-phase plan for states to reopen, which provides conditions under which sporting venues could reopen in the first phase, after a jurisdiction is able to demonstrate a downward trajectory of documented coronavirus cases within a fourteen-day period or a downward trajectory of positive tests as a percent of total tests within a 14-day period (flat or increasing volume of tests).

Trump said that some jurisdictions will meet the criteria for the first phase as early as today. Fauci doubled down on his prior commentary and reiterated that sports will only return in summer 2020 if nobody comes to the stadium. He indicated that it is conceivable that an audience be in the stands once a jurisdiction gets to the third phase, but it will likely be a while before that happens across cities that host sports franchises.

There is an urgency to open up the economy to live sporting events, even if it means that games will not be played in front of fans for quite some time. This issue is playing itself out front and center in Florida.

Florida Governor Ron DeSantis and the State of Florida Division of Emergency Management have labeled professional sports as “essential services.” An April 9 memorandum says that those providing such essential services include “Employees at a professional sports and media production with a national audience — including any athletes, entertainers, production team, executive team, media team and any others necessary to facilitate including services supporting such production — only if the location is closed to the general public.”

By classifying sporting events as “essential,” DeSantis has opened the door to sports returning as soon as now with the caveat that no fans be allowed to attend. DeSantis seeks to bring the WWE, NASCAR, and professional golf events to Florida sooner rather than later in an effort to bolster the state’s economy, but appears to have recognized Fauci’s position that fans must come back much later in the reopening process.

“I understand you’re not going to fill up Daytona Speedway right now,” DeSantis said. “I’m not suggesting you do, but I think if there’s content that can be created, I think that that’s a good thing. Even Dr. Fauci said, televised sports is a positive thing.”

DeSantis’ closing line makes it even more abundantly clear how much Fauci’s words mean for the future of sport in the United States.

Various sports properties have much more aggressively announced their intentions to return, without fans for the time being, in close proximity to Dr. Fauci’s recommendations. The PGA TOUR has put a placeholder of June 11 as the date that it will return, without fans, with its Charles Schwab Invitational scheduled to take place in Fort Worth, Texas. Major League Soccer has recently targeted the second week of June for its return. The NFL is reportedly considering holding games in empty or partially filled stadiums and expects that it will begin to feel pressure from the federal government to do what it can to provide Americans with live sporting events.

If everyone is relying on Fauci for guidance on when live sports should resume, then will sports leagues and teams be inviting enhanced exposure should they allow fans to return to their seats in advance of Fauci officially changing course on his views and before a jurisdiction can prove that it has satisfied the conditions of the third phase of the newly introduced reopening plan? In a litigious society, it is not far-fetched to imagine a potential plaintiff using Fauci’s recommendation that games be played without fans in attendance if spectators are rushed back to stadiums and some contract coronavirus.

Certainly teams and leagues would be able to use defenses such as that the fans assumed the clear risk of attending the sporting events, and it is likely that, no matter when fans are allowed to return, special coronavirus-related waivers of liability will either be added to the tickets or be required to be signed by fans before they are allowed to view the matches. Furthermore, it will be very difficult for a plaintiff to prove that the virus was contracted at the game as opposed to in another venue.

As my colleague Jeff Fannell, president of Jeff Fannell & Associates, pointed out, “the spectator attends the game on his or her own accord and will claim the league was negligent? By deciding to attend, the spectator assumed the risk … a risk the spectator was aware of by virtue of the very statement made by [Dr.] Fauci the spectator would rely upon in making the claim!”

Yet, defending against this type of lawsuit is not something that sports teams and leagues even want to have as a concern. Furthermore, there is significant revenue to be earned even when forfeiting monies that would otherwise be received from ticket sales, concession items, and parking. Thus, it is more likely than not that every word uttered by Fauci on the subject will have great influence on how and when live sports will be returning. For now, it looks like it will be a couple of months before organized sporting events make a return, without any fans cheering on the athletes.

Darren Heitner is the founder of Heitner Legal. He is the author of How to Play the Game: What Every Sports Attorney Needs to Know, published by the American Bar Association, and is an adjunct professor at the University of Florida Levin College of Law. You can reach him by email at heitner@gmail.com and follow him on Twitter at @DarrenHeitner.

* President Trump’s former lawyer Michael Cohen will be released from prison early over COVID-19 concerns. He will still be under house arrest, which is not unlike the situation of many people right now… [NBC News]

* Speaking of which, R. Kelly’s lawyer is trying to get the incarcerated singer cut loose because of COVID-19 and says R. Kelly thinks he’ll die of coronavirus in prison. [New York Daily News]

* It’s been a decade since the Deepwater Horizon explosion, and the Mark Wahlberg movie would be a lot more boring if it just covered the legal battles that ensued from the incident. [Texas Lawyer]

* Check out this Boston lawyer who is volunteering 20 hours a week at Massachusetts General Hospital to give back during the COVID-19 pandemic. [Boston.com]

* New York’s Appellate Division, First Department, will be going all virtual for the foreseeable future. Hope they still have that nifty light system to tell attorneys how much time they have left. [New York Law Journal]

* The trial of Theranos founder Elizabeth Holmes has been delayed because of COVID-19. Thankfully, Theranos isn’t around to make faulty COVID-19 tests… [CNN]

* Joe Exotic, star of the Netflix docuseries Tiger King, has asked a federal judge for access to a computer and a law library in prison. If he gets a computer, his first priority should be making another music video. [TMZ]

Jordan Rothman is a partner of The Rothman Law Firm, a full-service New York and New Jersey law firm. He is also the founder of Student Debt Diaries, a website discussing how he paid off his student loans. You can reach Jordan through email at jordan@rothmanlawyer.com.

The move falls under measures put in place to support Zimbabwe’s five-year de-dollarisation strategy up leading up to the year 2024, seen by Fin24.

The southern African country recently reintroduced the use of foreign currency for local transactions, barely a year after outlawing its use in favour of the Zimbabwe dollar.

The decision to allow the use of foreign currency for local transactions, despite the earlier ban, was meant to ease the impact of the Covid-19 pandemic that has ravaged economies across the globe.

While for the remainder of this year and the following two years till 2022, institutions and individuals will be allowed to pay for goods and services in local Zimbabwe currency or foreign currency.

In 2023, all goods and services in Zimbabwe will be “chargeable in local currency and payable in local currency using free funds” reads the strategy.

Meanwhile, payment of salaries in foreign currency will be scaled back, except for expatriates or NGOs, where it will still be allowed.

Currently, payment of salaries in foreign currency by local companies to local employees can be up to 50% at the discretion of the employer, but this will be reduced to 40% in 2021, 30% in 2022, 20% in 2023 and up to 10% in 2024.

Selected fuel dealers will be allowed to sell fuel in forex under the Direct Import Scheme, which specifies different regulations applying to fuel sales using forex.

In another major policy move, Zimbabwe plans to gradually reduce exporters’ retention thresholds “to build national forex reserves”. Previously, retention thresholds had been criticised as too high, where exporters were paying up to 45% in fees to the Reserve Bank of Zimbabwe in exchange for local currency, sparking calls to allow them to retain foreign currency instead.

Post published in: Business

Many people have taken out funeral policies for themselves and their loved ones, only to find that when death occurs inflation has eaten away the value of their policy.

Zimnat’s new Gadziriro/Lungiselelo ZWL$ Funeral Plan is designed to overcome this problem and maintain the value of the policy by making it an inflation-linked plan.

Those who sign up for it will be advised of the required covers and premium reviews regularly.

The policy covers death from any cause, including Covid-19. In the event of accidental death, the cover takes effect immediately.

For a premium of $191 per month, members of a family of six are each initially covered for ZWL$30 000, meaning that altogether ZWL$180 000 will be paid out eventually to the family. However, the family can review the cover upwards every month to ensure it is adequate to meet funeral expenses.

The policy is not restricted to a family of six, nor is the amount of cover limited to ZWL$30 000 per person. Individuals and families of any size can take out the plan, with the premium varying according to the number of people to be covered and the value of the cover required. Covers are available initially from ZWL$10 000 to ZWL$100 000 per person.

The plan also comes with other benefits. There are no medicals required when signing up. There is also an option to take out additional cover for vigil and tombstone expenses for the whole family.

Zimnat Life Assurance managing director Workmore Chimweta said the company was always looking for ways to deliver products and services that continuously make life better for customers.

“Gadziriro/ Lungiselelo ZWL$ was born out of the need to preserve value for our customers. With the current economic environment customers need to live with peace of mind, knowing that the value of their policy is maintained regardless of inflation,” he said.

It is possible to arrange to sign up for Gadziriro/Lungiselelo ZWL$ even during the lockdown by contacting the Zimnat Contact Centre team on Toll Free 08080063/4/6 or by sending a WhatsApp message to 0772 175 99.  Those who already have other policies with Zimnat, can also contact their financial advisors to sign up.

Zimnat Life Assurance offers life assurance solutions to Zimbabweans both locally and in the diaspora. The company is part of a bigger group that also includes Zimnat General Insurance, Zimnat Asset Management and Zimnat Microfinance.

The group is associated with Sanlam, the largest non-banking financial institution on the continent.

Post published in: Business

Biglaw austerity measures just don’t take a break. And it makes sense since time is meaningless during quarantine, so if COVID-19 cost-cutting measures pile on ¯_(ツ)_/¯.

Mega firm Dentons has already made some COVID-19 austerity measures (they’re delaying partial payment of 2019 bonuses) and today the firm announced that wasn’t the end of their cost-cutting. Starting on May 1st, the firm will institute compensation cuts across the board for all employees making $60,000+.

So what are the exact cuts being made? In a four page memo (available on the next page) that, in addition to detailing the current cuts explains the firm’s guiding principles that they’ll use to govern during the pandemic, the firm’s Chief Executive Officer Mike McNamara explains:

• For Partners, all will see reductions in draws of at least 20%, with reductions for many including the most highly compensated Partners much higher than 20%.
• For employees, both timekeepers and business services staff, these reductions will be progressive starting at 0% and reaching 20% for those earning in excess of $190,000. There will be no reduction for team members who earn $60,000 or less.
• Consistent with our performance culture and our guiding principles, there will be a bonus mechanism process to ensure that individual high performers – lawyers, professionals and business services staff – will be able to recover some or all of these reductions, dependent on the Firm’s overall 2020 economic performance.

Good luck to the firm as it navigates these COVID-19 waters.

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.

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).