3 Global Firms Among Those Cutting Attorney Salaries

By Aebra Coe
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Law360 (May 6, 2020, 1:18 PM EDT) -- Hogan Lovells, Mayer Brown LLP and Nixon Peabody LLP are the latest BigLaw firms to implement attorney pay cuts amid the coronavirus pandemic, with associate salary reductions of between 10% and 15%, according to statements from the firms.

At Hogan Lovells, equity partners will see the most drastic cuts in their base compensation, but all lawyer categories in the U.S. are impacted.

"Complacency is not an option for us," Hogan Lovells CEO Stephen Immelt said. "We are therefore continuing with our policy of cutting back all non-essential costs and making measured adjustments to compensation. Our approach is to share the burden to protect both the business and our people so that we are well-positioned to meet our clients' needs when the economy bounces back."

U.S. equity partner draws will be reduced by 15% to 25% starting June 1, and all equity partners will defer half of any profits for the first quarter of the year normally paid in August until November, the statement said.

Nonequity partner base compensation will be reduced 15%, and the salaries of associates, counsel, attorneys, specialists and knowledge lawyers in the U.S. will be reduced by 10%, with some highly compensated counsel and specialists seeing a 15% reduction alongside senior counsel.

The firm said there will be no reductions for any attorney earning less than $100,000 in base compensation per year.

Hogan Lovells previously announced it was delaying bonuses and profit distributions for nonequity and equity partners for the firm's performance in 2019, and deferring salary reviews and discretionary bonuses for lawyers in its U.K. and Asia Pacific offices beginning May 1.

Salary reviews and bonus payments for the significant majority of its business services teams worldwide have also been delayed, the firm said.

Mayer Brown also said in a statement Wednesday that it is reducing salaries by 15% for all of its nonequity partner lawyers and business services staff who earn more than $200,000.

Business services staff who earn less than $200,000 a year will see reductions based on a graduated scale, the firm said.

Mayer Brown's equity partners agreed in March to a 20% reduction in monthly draws and to the suspension of their distributions for the first half of 2020, according to the firm. The firm also said it is postponing the arrival of its fall associate class in the U.S. to January 2021.

"In designing and adopting these measures, job preservation and providing seamless service to our clients are our top priorities," the law firm said in its statement.

At Nixon Peabody, salary cuts arrived this month, after the firm furloughed a number of staff and attorneys in April.

The pay cuts, which will be effective May 20, include a 10% reduction in base pay for associates and counsel, the firm confirmed.

"Our firm entered 2020 in a strong financial position. By making some difficult decisions and taking action, we plan to come out of this pandemic just as strong. Every day, our attorneys are supporting individuals, businesses and communities, helping them navigate the many issues they are facing in these challenging times," a firm statement said.

The news from the three firms comes amid a slew of BigLaw cost-cutting measures related to the coronavirus pandemic, including layoffs, furloughs and pay reductions.

On Monday, Pillsbury Winthrop Shaw Pittman LLP confirmed it will cut associate and counsel pay in the U.S. by 20% and by up to 15% for other staff, although no employees making less than $75,000 a year will have their pay impacted.

The firm called it a "shared sacrifice" approach, which includes reducing partner draws by a minimum of 25%.

Last week, Squire Patton Boggs LLP, DAC Beachcroft LLP, Saul Ewing Arnstein & Lehr LLP and Katten Muchin Rosenman LLP also announced cuts in the wake of the crisis.

--Additional reporting by Xiumei Dong. Editing by Gemma Horowitz.

Update: This story has been updated with news of cost-cutting measures at Mayer Brown and Nixon Peabody.

For a reprint of this article, please contact reprints@law360.com.

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