Law360 (April 17, 2020, 12:37 PM EDT) -- Seyfarth Shaw LLP is furloughing 10% of its U.S. employees, including staff and attorneys, and cutting pay for others, while Hogan Lovells, Clyde & Co. LLP, Foley Hoag LLP, Snell & Wilmer LLP and Stoel Rives LLP have also implemented cost-cutting measures as a result of the coronavirus pandemic, according to announcements made on Friday.
Medical personnel conduct drive-thru COVID-19 testing in Park Ridge, Illinois. Labor and employment giant Seyfarth Shaw on Friday became the latest firm to implement cost-cutting measures in response to the pandemic. (AP)
"Like most other firms, Seyfarth has elected to take prudent steps to protect our firm's long-term success. While difficult, we believe these actions will see us through this unprecedented event and safeguard our firm's future," Miller said. "Our hope and goal is to return to normal operations as soon as possible, and our first priority is to bring our people back to work."
Seyfarth was the 38th-largest law firm in the U.S., by domestic headcount, as of last year, with 851 attorneys, according to the Law360 400 report.
Miller said that while the measures announced Friday will primarily apply to the firm's U.S. employees, it intends to follow a consistent approach to cost-cutting across its international offices.
The pay reductions will go into effect May 1 and will be reevaluated at the end of 2020, according to the firm. The cuts include a 10% reduction in pay for all nonequity attorneys in the U.S. Additionally, there will be reductions for staff members, with the first $60,000 in income seeing no reduction, and then a 5% reduction on earnings between $60,000 and $150,000 and a 10% reduction on earnings over $150,000.
Partner draws were reduced earlier than cuts for the rest of the firm, on April 1, by 20%.
Phoenix-based Snell & Wilmer has also furloughed an undisclosed number of employees who've been unable to work remotely or those whose work "has significantly declined because of the current crisis," according to a statement issued Friday.
The firm said it would cover health, life and long-term disability insurance for all furloughed employees until it could bring them back, though it didn't specify when that would be. The firm's attorneys are also helping those employees obtain unemployment benefits and other coronavirus relief available.
Additionally, Snell & Wilmer is reducing the base salaries of nonpartner attorneys and monthly partner draws, both by 10%, Chair Matthew P. Feeney said in the statement. Administrative professionals will see cuts of up to 10% based on their salaries, he said.
Feeney said the decisions were difficult but are intended to best serve clients and the firm.
"Going into this pandemic, Snell & Wilmer has never been stronger," he said. "We know this extremely challenging time will pass."
And Portland-based Stoel Rives unveiled a long list of cost-saving measures, including significant salary reductions, furloughing staff and reducing partner draws. According to a memo obtained by Law360, the firm has furloughed 10% of its staff for at least three months. Furloughed employees will continue to receive benefits, the firm said.
On top of that, the firm is cutting pay by 20% for associates, staff attorneys and counsel attorneys starting May 1, per the memo. The reduction is on an annualized basis, the firm said, meaning a 20% cut starting in May through the end of the year would equal a 13% annual reduction in pay.
And Stoel Rives is also implementing tiered hourly reductions with corresponding pay reductions for staff based on their salaries. The cuts start at 5% for those earning more than $75,000 and go up to 20% for those who earn more than $150,000, per the memo.
Finally, the firm is maintaining a hiring and spending freeze, deferring staff bonuses, and eliminating most associate bonuses and firm reimbursement for things like parking and public transportation, according to Stoel Rives.
Melissa Jones, Stoel Rives' managing partner, said in the memo that the firm has had many strong years and is coming off a strong first quarter. But work is slowing down in some pockets and many of its clients have been affected by the pandemic.
"It is important to note that most of the measures described above are temporary," Jones said. "We can recall our furloughed team members and restore compensation levels at any time, and we all hope that will happen soon."
At Hogan Lovells, bonuses and profit distributions for partners based on the firm's 2019 performance will be spread out equally over each month this year, rather than being paid in lump sums due in May and at other points in the year, a firm spokeswoman confirmed Friday.
Additionally, salary reviews and discretionary bonus payments for lawyers in the U.K. and Asia Pacific regions, which were set to happen at the beginning of May, will now be postponed and reassessed later in the year, the firm said.
"We had a strong first quarter with performance at the same level as 2019 and are in a position where we have a robust financial position with no long-term debt. However, the current situation is so unpredictable that the responsible step is to take a series of measures now which enable us to manage liquidity and keep costs to a minimum," Hogan Lovells CEO Stephen Immelt said.
At Foley Hoag, associates and business professionals earning $190,000 or more are seeing a 15% pay cut, while pay for staff who earn between $150,000 and $190,000 has been cut 7.5%. Nonequity partner pay has been reduced 20% to 30% and equity partners have taken compensation cuts of an undisclosed amount, a firm spokeswoman confirmed on Friday.
"As the economy slows, our goal is to ensure Foley Hoag is well-positioned to weather a downturn. Therefore, the firm is making temporary adjustments by reducing salaries for all attorneys and certain business services personnel," Foley Hoag co-managing partners Jeffrey D. Collins and Kenneth S. Leonetti said in a statement.
In another Friday announcement, U.K.-based global law firm Clyde & Co. said it is implementing a number of measures to address the current crisis.
Clyde & Co. has furloughed a number of employees in the U.K., primarily in business support functions, a spokesman confirmed. It will also defer its next round of partner profit distributions, is deferring salary reviews and promotions until later in the year, and has set up an employee hardship fund to help those who need financial assistance.
On Thursday, a slew of other law firms announced cost-cutting measures, including Norton Rose Fulbright, Reed Smith LLP, Dentons, Duane Morris LLP, K&L Gates LLP, Schiff Hardin LLP, and Fragomen, Del Rey, Bernsen & Loewy LLP.
Another U.K.-based global firm, Ashurst LLP, said Thursday it is reducing the monthly sums paid to partners by 20% for the next six months and is deferring salary reviews until November. It will pay one-half of its usual July bonuses later in the year and is implementing reductions in work hours and pay for many employees over the next three months, beginning May 1.
--Editing by Jack Karp.
Correction: A previous version of this story misstated pay reduction figures at Seyfarth. The error has been corrected.
Update: This story has been updated with information on cost-cutting measures at additional law firms.
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