Biglaw

Am Law 100 Firm Makes Second Round Of COVID-19 Austerity Measures, Slashing Salaries

Furloughs were not enough at this firm.

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Life comes at you fast. And if you thought that was true in ordinary times, that’s been supercharged in a COVID-19 world. Just a few weeks ago, Am Law 100 firm Sheppard Mullin (ranked 54th on the most recent Am Law 100) announced they were furloughing a small number of staff members. Now the firm has made what is hopefully the last austerity measure they’ll need during the global pandemic, salary cuts.

In a statement from the firm (available in full on the next page), Sheppard Mullin Chair Guy Halgren had this to say about the most recent cost-cutting measures:

“The adjustments we are making today are fair and equitable and will help secure our strength through this challenging time. We reiterate our intent to not RIF or furlough our associates, special counsel and staff attorneys; not RIF or further furlough our staff; and commit that the partners will shoulder a meaningfully larger percentage compensation reduction than associates, special counsel, staff attorneys and staff.”

So what is going on at the firm? First are foremost, they’re furloughing an additional 17 staff members (in addition to the 33 previously furloughed). Plus there are salary cuts, because, of course there are salary cuts. Here’re the deets:

The salaries of associates, special counsel and staff attorneys will be reduced by 12% through the end of the calendar year. Given that the reduction is for two-thirds of the year, that calculates to an annualized reduction of 8%. The firm will conduct a special look-back at the end of the Measuring Year to recognize busy associates. The 2020 associate bonus program will more take into account non-billable activities and will include more focus on the discretionary component. Promotions in class at the end of 2020 will take into account that not all associates could effectively Work From Home.

Staff members making between $70,000 and $90,000 will have their salaries reduced by 5%/3.33% annualized (not to be reduced below $70,000) and those making more than $90,000, by 10%/6.67% annualized, through the end of the calendar year. We are not decreasing the salaries of any staff members making less than $70,000.

The firm will also institute a Workshare program for staff members without a full-time load of work available. This will allow the firm to cut the hours/compensation of those staff members by 20 percent (those employees would also be eligible for unemployment and other federal benefits).

Partners are also having their salary cut. Though there aren’t specific percentages provided, the firm says the partner cuts will be at a “meaningfully greater percentage.”

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If your firm or organization is slashing salaries, closing its doors, or reducing the ranks of its lawyers or staff, whether through open layoffs, stealth layoffs, or voluntary buyouts, please don’t hesitate to let us know. Our vast network of tipsters is part of what makes Above the Law thrive. You can email us or text us (646-820-8477).

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headshotKathryn Rubino is a Senior Editor at Above the Law, and host of The Jabot podcast. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).

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