Baker McKenzie To Cut North American Jobs As Virus Persists

By Xiumei Dong
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Law360 (September 1, 2020, 9:30 PM EDT) -- Baker McKenzie is cutting lawyers and staff in its North American offices as it looks to reduce its budget amid the business slowdown caused by the coronavirus pandemic, the global firm confirmed Tuesday.

In a statement to Law360, Baker McKenzie said it has "felt the impact of increased market and business disruption" from the coronavirus since it surged in early spring. As a result, the firm confirmed that it is reducing its workforce in the U.S., Canada and Mexico, including the layoffs of lawyers, "timekeepers" and business professionals.

The firm declined to provide the number of impacted employees. This year's Law360 400 report found that Baker McKenzie was the 60th largest law firm in the U.S. as of the end of 2019, with 723 attorneys and 315 partners in the country.

"To say this was a hard decision is a massive understatement," the firm said in the statement. "We are deeply aware of the human impact of these decisions, and are treating our people fairly and with dignity. But having considered the full array of options, we are confident that this is the best path forward."

The firm also said Tuesday that the salary reductions it implemented in April for U.S. and Canadian lawyers and staff will end at the end of the year.

Baker McKenzie introduced a series of cost-cutting measures on April 13, including cutting pay for its attorneys and business professionals making more than $100,000 a year by 15% in the U.S. and by 10% in Canada. At the time, the firm said "the largest compensation impacts will be felt by equity partners." Additionally, the firm had said employee base pay would not be adjusted in July as had been planned and there would be an unspecified adjustment to the firm's bonus pool to save money.

On April 27, Baker McKenzie appointed a new chief operating officer for North America, hiring Jennifer Korff, who has previously served in leadership roles at other BigLaw firms, to oversee the firm's 15 offices in the U.S., Canada and Mexico.

Baker McKenzie's news follows Davis Wright Tremaine LLP's announcement Tuesday that it will roll back some of its austerity measures but also lay off some of its furloughed staff.

Davis Wright said in a statement that thanks to a strong financial performance in recent months, the firm is reducing its salary cuts by half, increasing third-quarter partner draws by an unspecified amount and bringing back some of its furloughed staff. However, the firm said it will also permanently lay off an unnamed number of furloughed staff.

"We ... have made the difficult decision to lay off some of the staff who had been furloughed, not knowing when, if ever, their previous work will return," Davis Wright managing partner Jeff Gray said in the statement. "This is the result of a fundamental shift in how we expect to operate and support our clients and lawyers going forward and not a cost-cutting measure."

Katten Muchin Rosenman LLP also said in June that it would permanently lay off some of its previously furloughed employees.

--Additional reporting by Emma Cueto. Editing by Michael Watanabe.

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