The thing about the uncertainty surrounding the economic upheaval caused by COVID-19, is that things are, well, uncertain. Even the best laid, most thoughtful plans can change, and pretty rapidly at that. So it shouldn’t come as much of a surprise that Biglaw firms that have already announced cost-cutting measures are going back for more.
At Husch Blackwell, a firm knocking on the Am Law 100’s door (they come in at the 101st spot), their initial foray into COVID-19 austerity measures were aimed at those at the top of the law firm food chain. The firm previously announced equity partner draws were cut by 15 percent and all managing directors and c-level executives had their salaries cut by 10 percent. Now we’ve learned there are even more cuts at the firm.
For this second round, Husch Blackwell announced a pu pu platter of austerity measures. Income partners are taking a hit to their compensation, and the dreaded layoffs and furlough are coming to both the attorney and staff ranks. From the firm’s statement (available in full on the next page):
Effective May 1, 2020, the firm is instituting a 10 percent holdback of fixed income partner compensation. The holdback is across the board and is equal to or smaller than earlier measures taken that impacted equity partners and senior administrative leaders. The firm is also implementing a series of measures to align its headcount with the downturn in the nation’s economy. These measures include a combination of job terminations, furloughs, salary reductions, transitions to less-than-fulltime status, early retirements, and deferrals. Both lawyers and staff were affected by some or all of these measures, but the total number impacted represents less than 10% of the firm.
The firm also announced modifications to its 2020 Summer Associate Program. The incoming class will be split into two groups, and each group will participate in a five-week program over consecutive five-week periods beginning in mid-June.
Chair Greg Smith had this to say about the cuts:
“This crisis is more prolonged and extensive than early estimates indicated, and while we made every effort to avoid these actions, they have become necessary,” said Husch Blackwell Chairman Greg Smith. “Notably, many of the impacted individuals are on furlough, and this simply because there is very little for them to do while we are in Work-From-Home mode. We are hopeful that they will be recalled to work as soon as it is safe and feasible to do so.”
Above the Law wishes the best to those that suddenly find themselves out of work during this tough time.
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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Kathryn 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).