Fisher Phillips Refunding COVID-19 Salary Cuts

By Justin Wise
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Law360 (October 26, 2020, 7:04 PM EDT) -- Fisher Phillips is returning withheld pay to lawyers and staff impacted by the salary cuts it instituted early in the coronavirus pandemic as law firms braced for a potential drop in business.

The labor and employment firm, which had reduced salaries for attorneys and staff by 20% in April, confirmed to Law360 on Monday that lost income for those affected will be fully restored by the end of October. The firm had previously rolled back its salary reductions.

Fisher Phillips will also begin releasing some earnings previously withheld from partners' monthly draws, a spokesperson said.

Fisher Phillips joined many firms in the spring by implementing salary cuts and partner earnings reductions in response to the COVID-19 outbreak and the economic downturn it caused. The firm fully restored salaries to pre-pandemic levels in August and began returning withheld pay the following month. 

In addition to salary cuts, the firm began keeping 50% of equity partners' monthly earning distributions in April. The policy was rolled back in August when the salary cuts were rescinded, the firm confirmed.

A growing list of major law firms have restored salary cuts to pre-pandemic levels in recent months. However, Fisher Phillips joins a smaller group that is going a step further and giving back withheld pay to attorneys and professional staff. Other firms have also announced plans to dole out special fall bonuses for associates.

Perkins Coie LLP and Pillsbury Winthrop Shaw Pittman LLP are among the major U.S. law firms offering full restoration payments.

Perkins Coie instituted salary cuts on a sliding scale in the spring, but said in early October that a "continued strong financial performance" amid the health crisis warranted a full reversal. Restoration payments making up for lost income would be allocated to partners, nonpartner lawyers and every staff employee in October, the firm said.

Around the same time, Pillsbury Winthrop announced that it was fully eliminating its "Shared Sacrifice" program, which included a complete rollback of salary and partner draw reductions, as well as the refunding of withheld pay.

A Pillsbury Winthrop spokesperson told Law360 on Monday that its "strong year-to-date performance" prompted the move.

Many firms have cited higher-than-expected cash flow during the first six months of the pandemic as reason for quashing salary cuts and other austerity measures. A move to remote work may have led to some decline in revenue, but it has also caused a significant reduction in expenses, National Association for Law Placement Executive Director James Leipold told Law360 last week, noting news for the industry has generally been "upbeat."

Some firms have implemented layoffs, although Fisher Phillips has up to now avoided them. The firm has not said whether it will make changes to its end-of-year bonuses.

--Additional reporting by Aebra Coe. Editing by Stephen Berg.

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