Skadden, Nixon Peabody Latest To Trim Staff Amid COVID-19

By Xiumei Dong
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Law360 (September 3, 2020, 3:42 PM EDT) -- Skadden Arps Slate Meagher & Flom LLP and Nixon Peabody LLP are the latest firms to lay off staff, the two firms confirmed Thursday, joining several other BigLaw firms that have trimmed their workforces as the coronavirus continues to take its toll on the legal industry.

Skadden confirmed in a statement to Law360 that it had "laid off just under 4% of professional staff across our U.S. offices."

On Thursday, a Nixon Peabody spokesperson also confirmed that the firm is laying off a "certain" number of previously furloughed staff, while also restoring some pay cuts for those still at the firm.

Both firms declined to disclose the number of impacted staff.

This year's Law360 400 report found that Skadden was the 9th largest law firm in the U.S. as of the end of 2019, with 1,349 attorneys and 277 partners in the country. It has seven offices across U.S. states, including in Massachusetts, Illinois, Texas, California, New York and Washington, D.C., according to its website.

This is the first time Skadden announced cost-cutting measures since the coronavirus surged in early spring. The firm cut down its 10-week summer associate program to eight weeks this year in response to the pandemic, but it paid the associates at the same rate.

Nixon Peabody ranked 76th on this year's Law360 400 report with 616 lawyers and 295 partners. In April, legal blog Above the Law reported that the firm had furloughed 5% of its associates and 25% of its staff while laying off another 5% of associates. In May, the firm confirmed that it has also instituted a 10% salary reduction for associates and counsel, which took effect on May 20.

In a statement to Law360 on Thursday, the firm confirmed that it furloughed "some colleagues" in April due to the uncertainties caused by the COVID-19 pandemic. Over the past few months, Nixon Peabody said it has brought back some of the furloughed employees, but as the firm learned the effectiveness of remote work, it has also decided to eliminate "certain" staff positions.

"Given we will not be back in our offices at full capacity for the foreseeable future, there are certain staff positions that are no longer needed in a remote work environment," the firm said. "As we continue to align our business with the needs of our clients, we have decided to eliminate these staff positions."

In a firm statement, Nixon Peabody spokesperson Allison McClain also confirmed that the firm temporarily reduced staff schedules and salaries to 80% in May, but added that it will restore the schedules and compensation for "many" of the firm's staff starting Aug. 31.

As the virus continues to spread across the country, Skadden and Nixon Peabody join several other firms that have trimmed their staff ranks in recent weeks.

Baker McKenzie said Tuesday that it's laying off 6% of its workforce in North America — both lawyers and staff — and that it plans to reverse pandemic-related pay cuts in the new year.

Davis Wright Tremaine LLP similarly said on Tuesday that it plans to restore its previous pay reductions by half and will lay off some staff. And in July, Bryan Cave Leighton Paisner LLP announced it would roll back previously announced pay cuts by half, while laying off a "very small proportion" of its workforce.

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

--Additional reporting by Aebra Coe. Editing by Alyssa Miller.

Update: This story has been updated with more details about the firm layoffs.

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