Am Law 100 Firm Furloughs Some, Slashes Salaries For All

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Austerity measures continue to be rolled out at law firms across America, and this afternoon, we have news from one of the very first firms to be affected by the coronavirus crisis. In mid-March, Davis Wright Tremaine closed several of its offices after an employee who displayed COVID-19 symptoms passed away. Although that employee ultimately tested negative for the virus posthumously, the firm asked all attorneys and staff to work remotely across all offices for the foreseeable future. Now, DWT is doing what it can to make sure the firm remains open after all is said and done.

Davis Wright currently finds itself in 92nd place in the Am Law 100 rankings, with $414,144,000 in gross revenue in 2019, and the firm is trying to keep its finances on the up and up by offering up a veritable smorgasbord of cost-cutting efforts, from reduced partner distributions to salary cuts for associates and staff to furloughs and reduced schedules for staff. Here’s what’s going on:

  • Partner Distributions: Quarterly equity partner distributions will be reduced, with the expectation that equity partner compensation for the year will be at least 25% below budget.
  • Salary Reductions: Effective with the pay period beginning May 2 through December 31, 2020
    15% for contract partners
    12% for associates, counsel and of counsel
    15% for C-level executives
    6-10% for staff based on salary level, with no reduction below $60,000
  • Furloughs: Effective May 2, we will temporarily furlough approximately 8% of our staff to adjust for workflows that have been disrupted or diminished due to reduced demand. Those furloughed will be eligible for the expanded federal unemployment benefits. The firm will also continue to provide them with medical, dental, and vision benefits, as well as access to our new Employee Disaster Relief Program, described below. We anticipate they will return to work as soon as we can resume more normal operations. We’re not planning to furlough any attorneys at this time. We’ll continue to share resources across practice groups to take advantage of available bandwidth and support the areas that remain very busy.
  • Reduced Schedules: In addition, a small number of staff members will move to reduced schedules to account for decreased workflow. Most of them (based on their state) will also be eligible for unemployment benefits and receive continued benefits. We anticipate that they’ll return to their standard schedules when workflow returns to normal for their functions.

On the bright side, DWT has established an Employee Disaster Relief Program, funded by partners, to provide monetary relief to staff members who suffer financial hardship as a result of the pandemic. The program is designed to provide assistance with various household expenses. In addition, the firm has created a vacation donation bank for staff to donate unused time for others who don’t have the leave needed to help with medical emergencies or the time needed to care for family.

Here’s a statement from Jeff Gray, Managing Partner of Davis Wright Tremaine:

We came into this crisis after a record year in 2019 and a strong first quarter, even as we adjusted to office closures and a changing business environment. We have continued to build our firm for the future, including bringing in several new laterals in the first quarter to service clients in our key industries. Though demand remains high in some practice areas, it’s decreasing in several others, and we’re seeing a significant slowdown in collections. We’ve delayed actions that affect jobs and paychecks for as long as we could. But, like many of our peers, we now must take additional steps to protect the firm, while continuing to provide the highest level of client service and ensure we emerge in the strongest possible position.

Our approach addresses business necessity in a manner consistent with our core values. We’re sharing the sacrifice across the firm and protecting jobs as best we can. We’re asking more of those who make more, with the hope that we will not need to take additional action. We must make sacrifices together, but we will also share in our success. If we end the year better than we currently expect, which we are working very hard to do, we will share that financial success across all levels of the firm.

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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Staci ZaretskyStaci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.

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