Ogletree, Eversheds Sutherland Walk Back COVID-19 Pay Cuts

By Xiumei Dong
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Law360 (September 9, 2020, 4:51 PM EDT) -- Ogletree Deakins Nash Smoak & Stewart PC and Eversheds Sutherland confirmed Wednesday that they had rolled back the salary reductions they imposed earlier this year, joining several other BigLaw firms to take back austerity measures after months weathering the coronavirus pandemic.

In an internal email sent to firmwide employees on Tuesday, Ogletree announced that it had eliminated all salary reductions at the beginning of September, attributing that decision to "a recent improvement in business and a strong pipeline through the end of the year."

The labor and employment law firm confirmed its pay cut plan on April 21, which reduced pay for equity partners by 20%, associates by 15%, and 10% for staff who earn $100,000 per year or more. Those earning less than $100,000 were not impacted.

"The cuts were originally designed to be in place through the end of 2020," the firm said in its statement. "By limiting the adjustments to only four months, the annualized impact on lawyers equates to a 5 percent reduction in compensation and 3.3 percent for affected administrative team members."

Similarly, in a statement to Law360 Wednesday, Eversheds Sutherland's U.S. CEO Mark Wasserman confirmed the firm's U.S. branch is restoring half of the 10% compensation cut it instituted in early May in response to the pandemic.

"We have been fortunate to have weathered the pandemic through the end of August with our client relationships remaining strong and by discovering new ways to work with our clients on existing and new projects in a mostly remote environment," Wasserman said in the statement.

That said, "with all of the uncertainty remaining for the pandemic and the economy," the firm will keep the remaining compensation reductions in place, Wasserman added. The firm will consider additional pay restorations at year-end.

Eversheds Sutherland's U.S. branch confirmed its austerity measures on May 8. In addition to implementing the 10% salary reduction for staff and attorneys making more than $50,000, the firm also furloughed 40 staff members, while keeping them on its health insurance.

Wasserman did not address the furloughs in his email but noted that Eversheds Sutherland has also given all employees a remote working stipend to cover some expenses incurred while working at home.

In April, Ogletree had also reduced hours for some employees and put a few other workers on temporary unpaid leave as it grappled with fallout from the COVID-19 pandemic. In July, the firm added it would offer special bonuses starting at $10,000 to reward non-partner attorneys for working more hours during the pandemic.

Ogletree on Wednesday confirmed offering the bonuses to associates, of counsel, and counsel who met the billable hour requirement or production thresholds, noting that "those who achieve these, most will actually earn more compensation than scheduled before the pandemic."

Ogletree and Eversheds Sutherland are among the latest law firms to roll back pay cuts and other austerity measures. 

On Tuesday, Holland & Hart LLP confirmed it had returned all employees' salaries and equity partners' third-quarter profit distribution to the full amount. It also reinstated its employee match to 401(k) contributions this month.

Last week, Hogan Lovells also confirmed it will reverse pay cuts instituted in June for associates and other employees.

Several others, including Baker McKenzie, Davis Wright Tremaine LLP and Nixon Peabody LLP, also announced rollbacks to previous financial cuts last week but simultaneously instituted layoffs.

--Additional reporting by Emma Cueto and Hailey Konnath. Editing by Janice Carter Brown.

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

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