Crowell & Moring, Ogletree Join BigLaw's Belt-Tightening

By Hannah Albarazi
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Law360 (April 15, 2020, 10:19 PM EDT) -- More BigLaw notables including Crowell & Moring and Ogletree confirmed Wednesday that they will reduce pay or staff hours to keep layoffs at bay, joining a wave of cost-cutting among law firms amid the coronavirus pandemic.

Other firms joining Crowell & Moring LLP in confirming pay cuts Wednesday included Faegre Drinker Biddle & Reath LLP, Husch Blackwell LLP and Hinshaw & Culbertson LLP. Ogletree Deakins Nash Smoak & Stewart PC confirmed that it has reduced some employees' hours and placed a few on temporary unpaid leave.

Crowell & Moring will cut pay for lawyers and some professional staff by 5% to 25% in response to the pandemic, with the highest-ranking positions taking the biggest percentage cut.

Employees earning less than $100,000 will not have their compensation reduced, a spokesperson for the firm told Law360.

Equity partners at Crowell & Moring will see a 25% reduction in pay, and most income partners will see a 20% reduction. Associates and counsel will see a 15% reduction, and senior staff will also face pay cuts, the firm said.

Philip T. Inglima, chair of Crowell & Moring, said in a statement Wednesday that while the financial health of the firm "is very good," it has decided to take proactive steps to avoid having to let people go amid the pandemic.

"These adjustments avoid any layoffs and mean that two-thirds of our staff are spared any reduction in compensation," Inglima said.

"We are taking prudent and responsible steps to keep our firm strong as we, and our clients, navigate the economic uncertainty and challenges stemming from the COVID-19 pandemic," Inglima said.

Inglima said the firm, which has over 400 attorneys, is tightening its belt and "will postpone distributions and adjust partner draw levels for the months ahead in 2020. We also will institute tiered compensation reductions for all nonpartner attorneys, as well as a segment of our professional and administrative team, for the balance of the year."

"By taking these actions now, we are confident that we will be able to continue providing outstanding service to our clients and to support our people," Inglima said.

Similar measures are going into effect at Husch Blackwell. A spokesperson told Law360 that the 600-attorney firm has cut equity partners' monthly draws by 15% of base compensation and that equity partner holdbacks have been increased.

All of Husch Blackwell's managing directors and C-suite executives have voluntarily taken a 10% cut in salary.

The spokesperson said Husch Blackwell is "closely monitoring the crisis and its impact on our operations and those of our clients."

Chicago-based Hinshaw & Culbertson is also cutting pay.

In an email obtained by Above the Law, Hinshaw & Culbertson Chair Peter Sullivan told all employees that the 400-plus attorney firm will implement a 15% salary reduction for all personnel making more than $55,000 a year.

The pay reduction will begin on April 30 and continue to at least August, while subject to "constant review," Sullivan said. Additionally, the firm has deferred the midyear partner promotion process and salary adjustments, as well as the bonuses for associates and staff, likely until January 2021.

A spokesperson for Hinshaw confirmed the contents of the companywide email to Law360 but declined to comment further.

Faegre Drinker Biddle & Reath — which was launched in February by the merger of Faegre Baker Daniels LLP and Drinker Biddle & Reath LLP  — is reducing pay as well.

"In the exercise of prudence, we deferred one-third of equity partner distributions for the second quarter and are performing a top to bottom review of our expenses," a spokesperson for the firm told Law360.

Faegre Drinker now has roughly 1,300 attorneys, consultants and professionals.

"As is the case with our clients and other professional service firms, we are continuously assessing the impact of the COVID-19 pandemic on the economy in the coming weeks and months," the Faegre Drinker spokesperson said.

While labor and employment law firm Ogletree says it isn't reducing pay just yet, some of the firm's employees have been left with little or no work to do.

Ogletree managing shareholder Matt Keen said Wednesday that while the 800-plus attorney firm has not "at this time" made pay cuts or salary reductions in light of the pandemic, some employees have had their hours reduced and a few have gone on temporary unpaid leave.

Keen said impacted employees will receive two weeks of firm-provided COVID-19 paid leave and are able to use all available paid leave.

"It is our goal to recall these employees as soon as business conditions allow," he said.

Keen said the firm will continue to provide health insurance coverage and pay both the employee and employer share of premiums for employees on temporary unpaid leave through May 31, 2020.

"We are watching our business closely and considering additional measures that may be necessary as we continue to navigate this unprecedented time," Keen said.

On Friday, Goodwin Procter LLP said it was trimming its global operations team while Mintz Levin Cohn Ferris Glovsky and Popeo PC said it will cut all employees' salaries.

A long list of firms reported taking cost-cutting measures over the past few weeks to weather the financial impact of the COVID-19 pandemic.

--Additional reporting by Xiumei Dong. Editing by Jill Coffey.

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