Major law firms adopted drastic measures to mitigate the economic effects of the coronavirus pandemic and recession. Some firms have rolled back their pay cuts. We will continue to update these events as the crisis continues.
Chairman and CEO Scott Meyers said the Florida-founded Am Law 100 firm planned to “control costs by reducing compensation payments across all levels of the firm and resizing our workforce.” A spokesperson for the firm said in an April email that the workforce reduction affected less than 5% of the firm’s employees.
According to the firm, draws will be reduced by 12.5% on an annualized basis for most partners, of counsel and consultants, while some partners “with a different compensation arrangement” will see a 17.5% reduction in their draw on an annualized basis. Additionally, associate compensation will be reduced by 7.5%, staff with annual salaries of $150,000 or more will see a 7.5% pay reduction, and staff who make less than $150,000 annually will see a 5% reduction. All of those cuts are on an annualized basis as well.
Allen & Overy
Allen & Overy has called for partners to contribute capital as it takes measures to protect itself financially. The Magic Circle firm is holding a cash call and is gradually reducing its partner profit distributions, it confirmed March 31. It has also frozen its associate and support staff pay, meaning it will not undertake annual salary reviews due to take place in the first quarter of the forthcoming financial year. Meanwhile, bonuses due to be paid to fee-earners and senior support staff in July will be split into two payments. Half will be paid in July, while the remaining half will be paid in October. The firm, which has no debt, has also deferred certain recruitment and cancelled several events, a spokesperson said in a statement.