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As we noted earlier today, not even the Biglaw firms with the most impressive financial performance are immune from the economic ravages of COVID-19. We’ve learned that Mayer Brown — a firm that came in 17th place in the latest Am Law 100 rankings, with $1,484,000 in gross revenue in 2019 — will be implementing extensive austerity measures firmwide.
We’ve been told that not only have partners been taking reduced monthly draws, but they’ve also suspended their distributions for the first half of the year. Today, Mayer Brown announced that effective May 18, salaries for all non-equity lawyers and staff (who make more than $200,000) will be reduced by 15 percent, and this will most likely last until the end of 2020. All other staff will have their salaries reduced on a graduated scale, with no reduction for those making less than $30,000. The firm has also created a voluntary leave program, where those who take advantage of it will receive 25 percent of salary and benefits for up to 12 weeks leave, plus 10 percent more if they complete a certain number of pro bono hours. Last, but not least, the firm will be postponing the start date for their incoming first-year associates to January 2021.
Here’s a statement we received from a Mayer Brown spokesperson on the firm’s plans:
Mayer Brown is in a very strong financial position, with excellent capitalization and record financial performance in recent years, including the first quarter of 2020. We have always managed the firm conservatively, and the extent of the pandemic’s impact on our clients, and therefore on our business, remains impossible to predict. Accordingly, we have adopted a series of cost-saving and cash-management measures that will enable us to prepare for the remainder of 2020. In designing and adopting these measures, job preservation and providing seamless service to our clients are our top priorities.
In March, our equity partners agreed to a 20 percent reduction in monthly draws and the suspension of their distributions for the first half of 2020. Today, the firm announced a 15 percent reduction in salaries for our other lawyers, as well as business services staff who earn more than $200,000. Salaries for business services staff who earn less will be reduced according to a graduated scale. Because these reductions are for just over seven months of the year at most, the 15 percent cuts calculate to an annualized reduction of just under ten percent.
In order to protect the health and safety of our people, as well as uncertainty in the cities in which we operate, we are postponing the arrival of our fall associate class in the US to January 2021. We will provide a $5,000 monthly payment to our new colleagues for three months, starting in October 2020, and we are paying now our usual summer stipend of $10,000. In addition, we will cover the cost of premiums for medical and related insurance programs during the postponement period.
Finally, in acknowledgement of these challenging times, we are also offering more flexibility to our lawyers and staff with a program that will enable individuals to request up to 12 weeks of voluntary leave / sabbatical. Program participants will be paid 25 percent of their salary during this leave period, rising to 35 percent for those who handle pro bono matters during their leave.
We are grateful for the collective contributions of our great lawyers and business services staff, which will ensure we navigate this period and emerge from this crisis an even stronger global law firm.
On the bright side, Mayer Brown has established a firm-funded Mayer Brown COVID-19 Relief Fund to help employees who have suffered “undue economic hardship” as the result of the pandemic. Plus, sources say the firm is strongly committed to rewarding high billables during these tough times through 2021 bonuses.
(Flip to the next page to read Mayer Brown’s memo on salary cuts.)
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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.