Ballard Spahr Cuts Pay Amid COVID-19 Economic Woes

By Matt Fair
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Law360 (April 14, 2020, 8:41 PM EDT) -- Ballard Spahr LLP on Tuesday said it is implementing pay cuts for nonpartner attorneys and staff making more than $75,000 per year and reducing partner draws in response to the economic toll of the ongoing global COVID-19 outbreak.

In a statement shared with Law360, firm Chair Mark Stewart said the cost-savings move is being implemented to avoid potential layoffs and that the intent is to have the burden shared as fairly as possible at the approximately 650-attorney firm.

"We made the hard decision to enact painful but necessary cost-cutting measures now in the hopes that it will put the firm on better footing when things improve," Stewart said. "The burden will be shared by partners, other lawyers and staff who earn more than $75,000 a year. We hope to avoid layoffs and to remain as busy as we have been, guiding our clients through this turmoil and back to normalcy as soon as possible."

Officials confirmed that nonpartner attorneys and staff making more than $250,000 per year will see a 15% reduction in their pay, while those making between $75,000 and $250,000 will see a 10% cut.

Those making less than $75,000 will not see their pay affected.

The Philadelphia-based firm's approximately 240 partners, meanwhile, will see their draws reduced by between 20% to 25%, officials said.

Officials said the firm could potentially revisit the pay cuts if the economic toll of the COVID-19 outbreak ends up being less drastic than anticipated.

Ballard Spahr is the latest in a string of firms to take action to protect themselves against a potential drop in revenue as a result of the coronavirus' economic impact.

Baker McKenzie announced on Monday that it was reducing salaries for attorneys including nonequity partners, other timekeepers and business professionals in the U.S. by 15% and Canada attorneys and staff by 10%.

Kirkpatrick Townsend & Stockton LLP said it was reducing partner draws by an average of 10% and that salaried attorneys and staff would see their pay cut by 5%.

Other firms have announced layoffs and furloughs in response to the economic downturn.

Goodwin Procter LLP said on Friday that it was eliminating "a limited number" of nonattorney staff.

Among other major players in the Pennsylvania legal market, Eckert Seamans Cherin & Mellott LLC said earlier this month that it was furloughing a portion of its administrative and support staff on a temporary basis, while Reed Smith LLP announced at the end of March that it was slowing cash distributions to its partners.

--Additional reporting by Xiumei Dong and Emma Cueto. Editing by Stephen Berg.

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