Are larger law firms cutting their lawyers' salaries?
Due to the consequences produced by COVID-19, many large firms have implemented measures to maintain their sustainable economy. One of the most notorious measures is the reduction of salaries among lawyers.
In this case, Simmons & Simmons announced a 20% reduction in salaries as of July. Another measure that the British law firm has implemented is the reduction of weekly working days from 5 days to 4.
Simmons’ spokesperson said: “Preserving jobs is our priority and the firm will continue to make proactive decisions around business management to maximise our prospects of doing so and to ensure the firm is in a position to emerge stronger from these conditions”.
Like Simmons & Simmons, many other law firms have chosen to reduce their staff salaries, such as Eversheds Sutherland, which announced in May a 20% salary reduction for some of its lawyers. In this case, Eversheds implemented a plan called 'Flexing the Working Week Scheme', which allowed lawyers who find themselves working fewer hours to work, leading to a reduction in their salary.
"From the very start of the Covid-19 outbreak, we have said that we want to protect not only the strength of the business but also the jobs of our people," chief executive Lee Ranson said at the time.
Norton Rose Fulbright also announced the reduction of salaries of its staff located in the United States. The reduction would be 15%, except for those lawyers who earn less than $50,000 a year. This measure is scheduled to be completed by the end of September.
“As we all know, the coronavirus is having an unprecedented effect on markets and businesses around the world and in the US. The extent of the virus’ impact on the legal industry is unclear at this time, but the road ahead appears challenging. In light of these conditions, US leadership believes it is prudent to take steps to address this uncertainty and ensure that our law firm emerges healthy and strong. Although difficult, we have asked our attorneys and staff to accept a temporary reduction in compensation. We will work aggressively throughout the balance of the year in the hope that we can lessen the impact of these salary reductions. We also have made discrete reductions in our US work force as part of our plan to safeguard the future of our more than 1,600 lawyers and staff”, explicó Jeff Cody, Norton Rose Fulbright’s US Managing Partner.
Baker McKenzie also announced reductions in salaries for workers in the U.S. and Canada, but only those earning more than $100,000 a year. The reduction for U.S. lawyers would be 15% while Canadian lawyers would be 10%.