‘Targeted redundancy process’ will impact ‘small number’ of associates and staff, global outfit says
Reed Smith has rolled out a series of fresh belt-tightening measures in response to the COVID-19 pandemic, including pay cuts, furloughs and a round of redundancies in London.
The US outfit said it was “initiating a targeted redundancy process that will impact a small number of lawyers and staff” in London, the firm’s largest office with over 350 lawyers. It is understood to be one of the first major legal players to cut London roles as a result of the crisis.
Professional assistants and a number of support staff will drop down to a four-day working week, with a corresponding pay reduction, and a “small number” of employees will be temporarily furloughed. The salaries of professional staff earning more than $100,000 (£80,000), who are not subject to other financial measures, will be reduced by 6%.
Sandy Thomas, Reed Smith’s global managing partner, stressed that partners will “continue to bear the largest share of the financial burden of the firm’s action”. Back in March, the firm took the decision to slow partner cash distributions as it braced itself for the “short-term and potential long-term economic impacts of COVID-19”. Then, in April, it announced a 15% cut to associate pay for May through the end of August.
The salary cuts have now been extended to the end of the year, Reed Smith confirmed, with fixed share partners and counsel taking hits of 14% and 12.5% respectively, and associates a cut of 12%.
Reed Smith said it expects most of these measures to be temporary, and during this time, healthcare and other benefits will remain intact for all lawyers and staff.
“Like all well-run businesses, during the normal course of managing the firm we continually evaluate the size and shape of our global organisation to ensure that it matches the needs of our clients,” Thomas added. “This practice is as important as ever during the pandemic.”