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

Dickinson Wright

The firm said in a statement: “Our leadership has developed a tiered contingency plan for the potential of reduced revenues. This plan entails reducing discretionary spending, implementing an approximately 3% reduction in workforce, canceling our summer program yet providing everyone in that summer class an offer, and deferring our fall incoming class of associates to January.”

Dorsey & Whitney

The Minneapolis-based law firm said April 8 [21]it is capping the value of its monthly equity partner distributions and has furloughed less than 4% of its 1,100-plus workforce. The firm is also cutting its contributions to its employees’ retirement plans by 33%. Meanwhile, Dorsey has instructed its employees to keep a close track of the amount of money they’re spending. The firm said it will “reevaluate its measures from time-to-time and is intent on limiting disruptions to its workforce as much as possible.”

Duane Morris

The Philadelphia-based Am Law 200 firm said April 9 that it intends to defer this month’s distributions to equity partners. A spokesperson for the firm also said it has furloughed “a limited number of administrative employees who cannot effectively work remotely,” but that it intends to recall them to their jobs as soon as the firm can reopen its offices. “The employees will retain their medical insurance fully paid by Duane Morris,” the firm said.

On April 14, the firm informed associates and special counsel that their base salaries would be temporarily reduced by 15% beginning May 1 through the end of the year, a source said. In an updated statement April 16, the firm said it also reduced targeted year-end equity partner compensation by 25%, and nonequity partner compensation by 20%. It acknowledged the 15% paycut for associates, special counsel and staff who make more than $100,000 annually, and said retirement plan contributions have been suspended for all personnel through the end of 2020.

Eversheds Sutherland

The firm announced[22] to its personnel on May 6 that it is reducing compensation for U.S. lawyers and staff by 10% on average and furloughing about 40 staff members. The firm is deferring the start date for its first-year associate class from the fall to January 2021. The firm will host a shortened, remote summer associate program for its roughly 20 U.S. law students, starting in July, and it plans to make job offers to all of them for fall 2021. Equity partners “will be leading the way” in compensation reductions, said the firm’s U.S. co-chair, Mark Wasserman because if revenue declines, so will their distributions. (The firm compensates its equity partners through profit distributions alone and does not pay them draws.)

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