Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.
Law360 (April 24, 2020, 8:53 PM EDT) -- Shearman & Sterling LLP, Reed Smith LLP and Akerman LLP are among the latest firms to confirm they are cutting back operations to deal with the economic fallout from the COVID-19 pandemic.
Shearman has crafted a voluntary leave program, Reed Smith is deferring some bonuses and Akerman is cutting compensation, while Nelson Mullins Riley & Scarborough LLP is reportedly cutting salaries.
On an annualized basis, Akerman will cut 12.5% from the draws of most partners, of counsel and consultants; 17.5% from the draws of some partners with a different compensation arrangement; 7.5 percent from the compensation of staff with annual salaries of $150,000 or above and of associates; and 5% from the compensation of staff with annual salaries of less than $150,000, according to the firm.
While Akerman had what it characterizes as a strong financial performance during the first half of its fiscal year - which began in November - its second half will undoubtedly be impacted by the economic fallout from the COVID-19 pandemic, said Scott A. Myers, the the firm's chairman and CEO, in a statement on Sunday.
"We made the proactive decision to confront these uncertainties and control costs by reducing compensation payments across all levels of the firm and resizing our workforce," Myers said. "None of this is taken lightly. But we believe these measures will ensure the long-term strength and stability of our firm."
Shearman is offering all of its employees globally the voluntary opportunity to take leaves of three to six months in length, while receiving 30% of their usual pay, according to the firm. Should the employees perform pro bono work during the period, they will receive 40% of their typical pay, according to the firm.
At Reed Smith, equity partners have agreed to receive half of their bonus amounts at their regularly scheduled time, with the remaining balance to be paid three months later, a spokesperson for the firm said on Friday. Bonuses for fixed-share partners, associates and counsel will be paid in full and on time, according to the firm.
Pittsburgh-based Reed Smith had already made the decision in March to defer other partner distributions and in April to reduce base pay for counsel by 10% in the next three months. Reed Smith had previously also confirmed that it was deferring decisions on merit increases and discretionary bonus payments for professional staff and reducing associates' pay by 15% for four months, starting in May.
Meanwhile, Nelson Mullins will reduce salaries for associates by 9%, institute a hiring freeze, minimize overtime and call for one-week furloughs between June and September, according to Above the Law.
The latest slate of pay cuts and furloughs follows a number of other firms implementing similar measures in recent days, including Husch Blackwell LLP, Travers Smith LLP, Orrick Herrington & Sutcliffe LLP's U.K. branch, Dinsmore & Shohl LLP, McDermott Will & Emery LLP, Clifford Chance LLP, Venable LLP and Ogletree Deakins Nash Smoak & Stewart PC.
--Additional reporting by Natalie Rodriguez, Michele Gorman and Xiumei Dong. Editing by Alanna Weissman.
Correction: A previous version of this article incorrectly described changes by Akerman and Shearman. The errors have been corrected.
For a reprint of this article, please contact email@example.com.