Biglaw firms continue to tighten their belts. The economic upheaval that was brought about by the global pandemic continues to burn a path through the economy, and even giant law firms are feeling the pinch. The latest firm to announce COVID-19 austerity measures is Shook Hardy & Bacon, ranked 103rd in the Am Law 200.
The firm has instituted a number of cost-cutting measures in order to put the firm on the firmest footing. There’s salary cuts across the board, though the percentage of the cuts varies by position. Equity partners are seeing the biggest cut — 90 percent of the upcoming draw (scheduled for this week) will be cut, and thereafter their monthly draws will be cut by 75 percent. Income partners will have their April salary cut by ~50 percent and future payment will be reassessed. Associates will take a 25 percent hit, and professional staff will see a 20 percent decrease in compensation. Additionally, we understand there have been some temporary furloughs of professional staff who have work that is dependent on a physical location.
When reached for comment, the firm had this to say:
Despite the many challenges presented by the COVID-19 pandemic, Shook was one of the first law firms to successfully transition to a fully virtual firm model. In doing so, we have continued to provide our consistent excellent service to clients during this health crisis. The creativity, teamwork and dedication demonstrated in all areas of the firm have been extraordinary.
We entered the current period in a strong financial position, but like most businesses, we are taking prudent anticipatory measures consistent with our business continuity planning and financial modeling to appropriately mitigate the significant risk and uncertainty created by the pandemic. These measures include delaying or deferring various operating expenses, deferring some partner distributions, reducing partner draws, introducing pay reductions, and temporarily furloughing some employees.
If feasible, our intent is that these temporary measures will be lifted once the business and economic climate improves. Our overarching objective is to emerge from the current environment in a continued position of financial and strategic strength—ready to serve our clients’ needs as we have for over 130 years.
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).
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