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Law360 (April 16, 2020, 7:13 PM EDT) -- Five more firms, including Reed Smith LLP and Dentons, confirmed cuts in attorney pay Thursday, joining a slew of peers that have already taken similar steps in response to the coronavirus pandemic.
Pittsburgh-based Reed Smith, which already made the decision last month to defer partner distributions, said Thursday it has also reduced base pay for counsel by 10% in the next three months. In addition, the firm said it is deferring decisions on merit increases and discretionary bonus payments for professional staff.
The firm is reducing associates' pay by 15% for four months, starting in May. These lawyers have already been awarded annual raises, and their previously announced bonuses will be paid as scheduled later this month, a firm spokesperson said in a statement to Law360.
Dentons said it would be reducing pay for all U.S. lawyers and staff who earn more than $60,000, according to a four-page memo obtained by Above the Law. Specifically, partners will see reductions in draws of at least 20%, though the most highly compensated partners will see much higher cuts, the firm said.
All other attorneys and staff will see cuts of up to 20%, depending on their salaries, the multinational firm said. Anyone who earns $60,000 or less won't see a reduction.
Dentons also said it would be furloughing its business services staff members — less than 5% of its overall staff — for three months.
"Many of these colleagues are unable to perform their jobs remotely," CEO Mike McNamara said in the memo.
Finally, the firm's summer associate program will be shortened and shifted to online, per the memo.
"None of these protective measures are being taken lightly, and we believe them to be in the best interest of the firm and all of our people," McNamara said.
Meanwhile, Philadelphia-based Duane Morris LLP is reducing salaries for all attorneys and staff based on a graduated scale, firm Chairman and CEO Matthew Taylor said in a statement to Law360.
He said the initiatives are designed to ensure that the firm "remains strong and agile" as the entire legal industry deals with the economic impact of COVID-19.
According to Taylor, Duane Morris has already deferred equity partner distributions and reduced their year-end compensation by 25%, while compensation for nonequity partners is being reduced by 20%.
Going down the ladder, associates, special counsel and staffers making more than $100,000 annually will see their salaries reduced by 15% starting May 1, Taylor said, guaranteeing that staff earning less than $100,000 won't see any pay cuts.
"Throughout this process, we've worked to provide the best guidance and assistance possible for our stellar team," Taylor said in the statement. "We believe these cost-cutting measures, while difficult, will ensure a strong financial footing for our organization and our employees as the nation and the entire world fight to emerge from this storm."
Duane Morris' cost-cutting measures come just two months after the firm merged with New York-based Satterlee Stephens LLP. Following the tie-up, Duane Morris reported having at least 850 attorneys, including 350 partners.
In addition to the salary reduction, Taylor said Duane Morris also furloughed "a limited number of employees who were unable to work remotely." Some staffers have been moved to a reduced work schedule, he added.
The firm is also suspending its employees' retirement plans matching contributions for the remainder of 2020. In the statement, Taylor said the firm will "reassess the situation during the course of the year" and determine if it is able to restore the reductions.
Pittsburgh-based K&L Gates is also temporarily cutting pay for its attorneys and staff making over $75,000 annually by 15% starting May 1, according to a firmwide email sent Thursday. Equity partners will also see a 20% reduction in their scheduled advances, global managing partner James R. Segerdahl said in the email. The pay cuts will be revisited on a regular basis as the year goes on, with firm leadership aiming to mitigate or eliminate the reductions if possible, Segerdahl said.
"All personnel will be considered for discretionary bonuses for extraordinary performances or contributions, as many are working very hard through this period," he said in the email.
K&L Gates is coming off a solid first quarter and is "technologically equipped to work remotely," meaning the firm enters the COVID-19-spurred uncertainty in a strong position, Segerdahl said.
"I know these measures will not be easy for many to absorb in an already stressful time," Segerdahl said. "But the K&L Gates global community, with its culture of collaboration and teamwork, outstanding people, our pride in our work and in each other, and our determination to succeed, gives us every confidence that we will weather these challenges."
Fragomen, Del Rey, Bernsen & Loewy LLP partner Blake Chisam confirmed Thursday that it will reduce salaries for all partners and C-suite corporate leaders starting next month. Chisam declined to comment on the extent of the cuts.
"Everyone in our business is really looking into the same toolbox, right?" Chisam said. "We think that we've chosen the right tool for the moment to address the challenging circumstances that many — all of us — face."
Chisam also said there will be no bonuses or salary increases for employees in 2020, confirming an internal memo obtained by Above the Law.
According to the memo, decisions on pay raises and bonuses will be deferred until the end of the year, and any raises will not be effective until 2021. The New York-based firm also suspended its 401(k) matching program.
Also on Thursday, Chicago-based Schiff Hardin LLP said it is implementing pay cuts for most of its attorneys, while about 6% of them will see a 50% salary reduction based on "anticipated demand." And London-based Norton Rose Fulbright confirmed Thursday that it had slashed pay and laid off a number of attorneys and staff members in the U.S.
In recent weeks, BigLaw has been rocked by furloughs, layoffs, pay cuts and other cost-saving measures in response to the COVID-19 pandemic.
Baker McKenzie said Monday that it will temporarily reduce salaries for attorneys and business professionals in the U.S. by 15% and for those in Canada by 10%. And on Wednesday, Crowell & Moring LLP, Ogletree Deakins Nash Smoak & Stewart PC and others announced salary or hours reductions.
--Additional reporting by Hannah Albarazi and Aebra Coe. Editing by Jill Coffey and Breda Lund.
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