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City law firms repay government furlough money

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Norton Rose Fulbright, Herbert Smith Freehills and Osborne Clarke wind back cost-cutting measures after performance exceeds expectations

A trio of top City outfits are paying back the cash they received as part of the government’s furlough scheme.

Norton Rose Fulbright, Herbert Smith Freehills and Osborne Clarke performed better than expected since the onset of the pandemic and, as a result, have wound back cost-cutting measures.

Earlier this year corporate law firms took steps to curb the financial fallout brought on by the coronavirus. These included lawyer pay cuts or freezes, partner payout deferrals, delays to bonus decisions, and the furloughing of staff.

NRF has recently repaid furlough money used to support “a small number” of business services and secretarial staff. It has also called time on its scheme to allow staff to switch to a four-day working week for reduced pay.

Meanwhile, HSF has paid back money to HMRC it accepted in July. It brought back “a small number” of furloughed employees in London the same month after “stronger business performance than we had initially anticipated”, the firm’s executive partner, Alison Brown, said in a statement.

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Osborne Clarke announced last week it had brought back 116 furloughed members of staff, including business support staff and paralegals, in August, and repaid government funds it received as part of the furlough scheme. Ray Berg, managing partner, said the firm’s half-year results had held up “better than we had initially feared”.

As well as furloughing staff, OC had taken the “unfortunate but prudent decision” to cut staff pay by 7% for a 11-month period starting in June. The pay reduction applied to employees earning more than £30,000 but the firm said, however, that if it meets its new financial target for 2020-21, it will repay employees back.

It appears other City law firms are considering making similar moves to repay government furlough money. The Financial Times (£) reports Gowling WLG entered into talks on Tuesday to decide whether to pay back HMRC, while Eversheds Sutherland and Mishcon de Reya are also consulting.

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20 Comments

Anon

Silver circle showing up the magic circle, as per

cantab

isn’t that because the MC didn’t use furlough money to begin with?

cantab

isn’t that because the MC didn’t use furlough money to begin with

Gavin

Why would they do that? I thought they were not obliged to? Paying money back to HMRC ultimately means less in the pot for bonuses and salary increases.

Anon

Because social responsibility is more than just wearing green lanyards on world mental health day and tweeting something about black history month.

TheAcres

This.

Anon

They arent, it just releives some of the burden on the public sector in paying for the impacts of the pandemic. Its just socially responsible business. Fair play to them.

Gavin

It would barely be a scratch, let alone a dent. Meanwhile fee earners will be £100s worse off because of it. I wouldn’t be happy as an associate.

OP Anon

I’m an associate and have had salary and my bonus frozen this year. I would happily sacrafice that if it meant the secretaries could stay in a job long enough to ride this out. I’m also happy for that to be repaid rather than go directly to me if it means there is more funding within the government (in principle) to pay for more healthcare during the pandemic. Time to show a bit of humanity.

David Pullinger

Op Anon. Good man. Need more like you.

Gavin

Why do you suddenly care now? There has always been hardship in the world.

David Pullinger

That’s because you are obviously a selfish greedy man with no social conscience or thought for anyone other than self. Money is not everything. You pretty much sum up why the world is in the mess it is. You should be ashamed of yourself but won’t be.

Anon

They are returning overpayments that they are required to repay. It has nothing to do with social responsibility.

Anon

Where does it say that anywhere here or where reported in the FT? In fact it also says here that other City law firms are considering making similar moves to repay government furlough money… Seems very much optional pal

Jasper

Basic morality,of which you seem to be devoid of.

Tippity top top

Meanwhile at SPB dozens of secretaries and support staff got turfed, furlough cash isn’t getting repaid and partners are back to distributing wadd to themselves again lmao

Dave

LC now recycling articles directly from Financial Times ?

Wendy

Yes I heard most firms are shedding support staff by the bucket load so with those redundancies they are freeing up money. To then arrange for the other staff to get paid less when they are on just average salaries is live on is horrendeous. So now we have a situation where thousands of secretaries and other office support staff have been put on the scrap heap and chasing just a few jobs that are still available probably from much smaller firms on very little pay. So will the government set up proper training schemes now to up skill these people put of work to be able to do jobs for the future like tech to earn a liveable salary to survive and not end up destitute on the dole.

Client fave

How absolutely embarrassing to be using the furlough scheme as if they’re not paying their partners a few mill. Also it’s less to do with social responsibility and more to do with the clients asking them whether or not they took furlough money from the government and those that did quickly became embarrassed and sought to do damage control. Word in the firm is that the clients haven’t been impressed with those that did given their profitability and it’s been an awkward time for certain firms aka Herbies

Bleh

Absolutely no problem in principle with paying back furlough money to the government. But at least two firms who have repaid furlough monies have implemented staff pay cuts. Should repaying staff not have been the priority?

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