More law firms are preparing to furlough staff in response to the coronavirus crisis it emerged today with the government expected to announce that the national lockdown will continue for at least another three weeks.

Gowling WLG is furloughing staff and reducing working hours and pay from May to October, and is encouraging unpaid leave and sabbaticals. The firm said it is looking to top-up the salaries of those on furlough in a way that is fair alongside those on reduced hours and reduced pay arrangements. Partner profit distributions have also been deferred.

In order to protect its cashflow, Linklaters will not be paying out its partner distribution in June and bonuses will be split into two tranches. Salary reviews have also been pushed back six months and the firm has frozen all but essential recruitment.

Some members of DLA Piper’s property and workplace team have been furloughed, but the team remains on full pay.

Partner profit distributions are on hold at London firm Forsters, but staff salaries are not being cut. The firm has furloughed 60 employees against a total headcount of 426.

BLM has reduced monthly pay to equity partners and invested the money back into the business, with no cuts presently to staff salaries. The firm is entering furlough agreements with 170 members of staff.

Partner drawings at Charles Russell Speechlys have been reduced and the firm has stopped quarterly distributions to partners until further notice. This has been done to manage cash flow without asking anyone to take a salary reduction. No decision had been taken as of the end of last week about furloughing, with discussions due to continue.

Shoosmiths is in discussion with staff across the firm to consider whether it may be appropriate for some to take voluntary furlough leave. The firm is also consulting with staff and partners to consider 80% working, again on a temporary and voluntary basis, which would entail 80% pay and benefits. Full equity partners have already left their usual dividend payments within the business and further dividend payments are under review.

No staff are being furloughed and salaries are not being cut at DWF, and partner pay is not due to be reduced or deferred. However, the firm has yet to decide whether a final dividend will be paid out for 2020.

A survey of more than 200 law firms conducted by chartered accountants Saffery Champness and the Institute of Legal Finance & Management shows that 77% of firms have discussed a furlough strategy with staff. More than half of those furloughing staff intend to furlough no more than 40% of their total workforce, while 7% will furlough more than 80% of staff.

Meanwhile, three-quarters of respondents have either already reduced partner drawings or are considering it and 6% have started redundancy negotiations. Nearly three-quarters of firms have not introduced pay cuts, however.

Last week, almost 20 firms revealed plans to furlough staff, cut salaries and suspend partner pay.

 

*The Law Society is keeping the coronavirus situation under review and monitoring the advice it receives from the Foreign & Commonwealth Office and Public Health England.

Please see the Gazette’s dedicated coronavirus page here >>