Pay Cuts, Layoffs, and More: How Law Firms Are Managing the Pandemic

Husch Blackwell

On April 23[35], the Kansas City, Missouri-based firm said it would use a combination of terminations, furloughs and pay cuts of attorneys and staff, and a 10% holdback of fixed income partner compensation beginning on May 1 to help meet the economic downturn caused by the COVID-19 pandemic. The latest moves follow a decision in March to increase equity partner holdbacks as well.

According to the firm’s statement, both lawyers and staff were affected by some or all of the measures, but the total number impacted by furloughs and layoffs “represents less than 10% of the firm.”

The newly announced cost-cutting measures came after the firm’s C-level staff took pay cuts and equity partners cut monthly draws by an additional 15% of base compensation, increasing the equity partner holdback to 35% from 20%.

Ice Miller

In a statement from managing partner Steve Humke, per Above the Law, the firm has furloughed 18 professional staff and 17 timekeepers. Additionally, all members of the firm making more than $50,000 will have a compensation reduction, the amount of which was unspecified but tiered based on compensation levels, with partners taking the greatest reduction.

Humke also said the firm does not usually rely on credit and pays out a significant portion of partner draws every month after expenses are paid, rather than holding back funds for a larger end-of-year payout. As a result, he said, Ice Miller is aligned with peer firms’ compensation cuts. He said the firm plans to raise all team members back to their regular salaries as soon as the market allows.

Katten Muchin Rosenman

The firm said April 29[36] that it is implementing pay cuts and furloughs in May, cutting salaries by up to 20% for attorneys and business professionals who make over $100,000 a year, with no reductions below that level. The furloughs affected an unspecified number of professional and administrative staff and a small number of staff attorneys. Katten also suspended partner dividends at least through May. The firm simultaneously announced the creation of a fund to assist furloughed employees, augmenting state and federal aid.

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