City law firms introduce belt-tightening measures in wake of COVID-19
Furloughs, pay cuts and partner profit deferrals
City law firms continue to tighten their belts as they look to protect themselves from the impending financial fallout of COVID-19.
Bryan Cave Leighton Paisner (BCLP) said it was seeking pay cuts of 15% for all employees across its offices for a 13-week period starting in May. Staff earning less than $40,000 (£32,000) will not be affected.
The global firm also confirmed it is deferring payments to partners, offering sabbaticals at 30% of base pay, as well as part-time working arrangements to some employees.
“By acting swiftly and decisively, we expect to maintain our strong financial footing,” BCLP’s co-chairs Lisa Mayhew and Steve Baumer said in a statement. “Taking these precautions now, and acting in the best interests of our firm and all our people, will position us well for the future.”
Meanwhile, Eversheds Sutherland confirmed it had placed staff “who are not able to perform their duties whilst working remotely” on furlough for the next three weeks. During this time it will top up the payment from the government so that staff receive their full salary.
It also said it had taken the “difficult decision” to delay pay and bonus review until the end of October. However, candidates who successfully passed their assessments and interviews will be promoted from 1 May as planned. Promotion-related pay rises have also been deferred.
Eversheds said discussions around partner pay-outs were ongoing “but the expectation is that drawings will shortly be reduced and/or deferred”.
For staff with care commitments, the firm has launched an enhanced holiday scheme which gives an additional day of holiday for every four taken to care for others, as well as a hardship fund to provide additional financial support to individuals who are particularly impacted by COVID-19.
Elsewhere, DLA Piper has placed some of its staff within its UK property and workplace team on full paid leave. The international firm is also understood to be considering a delay or reduction in partner distributions.
A spokesperson for the firm said:
“Our primary focus is ensuring the wellbeing of our people while also maintaining a robust business through the pandemic and beyond. Given the nature of their roles, some of our people in our UK property and workplace team are unable to carry out their work so are currently at home while on full pay and benefits. As some of our property and workplace team are still able to work within government guidelines on rotation, our critical services remain fully operational.”
They continued: “Like all businesses at this time, we are closely monitoring the situation to ensure any decisions, should they become necessary, are made with due consideration and are in the best interests of our people, our clients and our business.”
It has also been reported that partners at Slaughter and May will temporarily go without pay in response to the pandemic. In an email seen by RollOnFriday, the magic circle player’s senior partner Steve Cooke confirmed all “discretionary distributions to partners” have been suspended with the money “being retained in the business”.
Fellow magic circle outfit Linklaters has taken similar action, cancelling its latest quarterly partner distributions and postponing yearly salary reviews to “preserve cashflow”. But it confirmed it was “not currently proposing any redundancies as a result of the challenging business environment”.
Similarly, Womble Bond Dickinson has deferred parter payouts and placed some UK staff on furlough. UK managing partner Jonathan Blair said:
“Like all businesses around the globe, the COVID-19 pandemic is impacting our firm. In order to protect our business and job security in these extremely uncertain times, we have asked some colleagues to go onto furlough leave and will be topping up salaries to 100% in April.”