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COVID-19: City law furloughs and pay freezes continue

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Outfits take financial measures to protect jobs amid pandemic

City law firms continue to take steps to shield themselves from the financial impact of the coronavirus pandemic through a combination of staff furloughs, pay freezes and partner profit deferrals.

Watson Farley Williams confirmed it had furloughed 49 non-fee earners and suspended partner distributions. The firm is not, however, freezing salaries or postponing promotions.

Meanwhile, Gowling WLG is furloughing staff, deferring partner profit distributions and encouraging unpaid leave and sabbaticals. Some staff will also work reduced hours for less pay from May to October 2020.

HFW revealed it too had furloughed a small number of staff and frozen pay rises for this financial year. The firm has also deferred a portion of partners’ salaries.

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Elsewhere, Shoosmiths has deferred dividend payments for partners and is in discussions with staff over a new working arrangement that would see a number of them take a 20% cut in hours for 80% pay. This would be on a temporary and voluntary basis.

Addleshaw Goddard deferred partner distributions due to be paid out next month, while Charles Russell Speechlys confirmed it had suspended quarterly distributions to partners until further notice.

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14 Comments

DLA Piperson Trainee

Friend from Uni works at Shoos And has been furloughed – already happened last week.

More of a “this is going to happen” than a volunteering scheme.

Not expected back before July apparently.

Chad Chadington

Trainee or non-fee earner?

Shoos trainee

Trainees haven’t been asked to furlough at Shoos, but they were allowed to volunteer.

Not heard of any trainees that have been furloughed so far (whether through being asked or volunteering)

Shetpits LLP

Shoosmiths LMAO

tips@legalcheek.com

Kudos to you. Appreciate not using the word “Top”, This is one small step for Tom and one giant leap for Legal Cheek.

Alan

Perhaps because no top outfits are mentioned in the article? Just a bunch of rookies.

Anon

People are going to be fired hard and fast.

We all know this, it’s the deal we signed up for. We get paid ridiculous money when times are good, but take the fisting when times are bad.

The partners will never cut PEP when they could cut payroll and, being honest, most of us would do the same in their position.

Jim's High Street Solicitors Ltd

Except if it is a short sharp shock then those firms that have fired half their staff and destroyed their reputation in the process will be very poorly placed to take advantage of the immediate uptick in work.

Jake

Any firm that focuses so much on short-term PEP won’t deserve to survive.

Anonymous

Jake obviously has not studied the business school data on what law firms need to do to survive in times of crisis. Short term PEP is everything. Law firms are among the most fragile structures when it comes to reduction in profits for owners. A company can reduce profits or move from profit to loss and the impact on shareholders may be limited, a drop of as little as 25% in PEP and firms are at risk of losing profit generating partners and swiftly collapse. So right now, a well managed law firm ought to focus every decision on PEP, more than ever.

Derrick

Dump your load in the sea and it may just float its way back to you. So let me put this to you when considering furlough – if the farmers farms farmers, then will we feast on our own flesh?

THICC

dats deep bruh pass me d blunt plz

tips@legalcheek.com

In a sense, this is basically what happens when eating seafood at the moment, given ocean pollution.

Chad

Does anyone know if Kirkland will be furloughing?

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