The sheer scale of the legal profession’s response to the coronavirus crisis has emerged this week, with practices across the country announcing they are furloughing staff, cutting salaries and suspending partner pay.
The Gazette contacted the UK’s top 60 firms – as well as some smaller practices – to find out what steps are being taken to mitigate the impact of the pandemic.
Several firms are taking advantage of the government’s job retention scheme, which pays 80% of an employee’s salary up to £2,500 a month for up to three months. However, firms will be aware that furloughing staff runs reputational risks given the large profit margins of City practices and the relatively high salaries of their lawyer employees.
Taylor Wessing has chosen to furlough staff whose roles have been impacted by the move to remote working, with the partnership topping up salaries to 90 - 100%. It has also withheld distributions of partner profits; paused live recruitment; requested that people take pre-booked time off; and asked everyone (partners and directors included) to take two-thirds of their annual holiday before the end of August.
Certain staff members have also been furloughed at Eversheds Sutherland for the next three weeks. However, the firm will top up the payment from the government to ensure employees receive their full salary. The partnership has also delayed pay and bonus reviews until the end of October; introduced an enhanced holiday scheme for staff with caring responsibilities; and created a hardship fund. Partner payouts are expected to either be cancelled or deferred.
Bryan Cave Leighton Paisner has cut the pay of all employees earning over £32,000 by 15% for 13 weeks, starting in May. Partner distributions have also been deferred and the firm is offering sabbaticals on 30% pay and part-time working hours arrangements. While it has not yet furloughed staff, BCLP is exploring government and US state job retention and workshare programmes.
Meanwhile at Womble Bond Dickinson some staff have been asked to go on to furlough leave, with the firm topping up salaries to 100% in April. Partner distributions have been deferred.
Magic circle firms Allen & Overy and Freshfields have suspended partner payouts, and frozen pay and bonus reviews. Linklaters and Clifford Chance declined to comment, while Slaughter and May said financial measures would depend on the government announcement expected on Monday.
Herbert Smith Freehills is reducing partner profit distributions and has postponed pay reviews. There will be bonuses for the 2019/20 financial year, but paid 50% in July and 50% by the end of the calendar year.
Simmons & Simmons has delayed partner distributions and deferred decisions on staff pay and bonuses until later in the year.
Staff at Norton Rose Fulbright have been asked to reduce their working week by 20% and agree to be paid 80% of their base salary. Partner distributions, pay rises and bonus payments have also been deferred.
Partner distributions have been suspended at Watson Farley & Williams and some staff have been asked to work reduced hours as a result of operational requirements. A total of 49 staff members have been furloughed and almost all salaries are being topped up.
HFW partners have agreed to a portion of their pay being deferred, with no staff salaries cut. The firm will furlough a ‘small number’ of staff and top up all salaries to 100%
Withers has furloughed 14 staff, all in its London office facilities team, and is topping up salaries to 100%. No salaries are being cut and partners are not reducing or deferring pay.
Slater and Gordon will pay bonuses due this month as expected to more than 1,000 staff, apart from members of the senior leadership team who will have payments deferred to July. Around 150 staff, less than 10% of the total, have been furloughed and the firm will top up each of their salaries.
Kennedys said it has neither furloughed staff nor cut salaries.
Partner distributions normally paid in April have been deferred at Freeths. Volunteers were sought for the government’s job retention scheme and 110 staff have been furloughed. Additional staff will be furloughed in future weeks. Staff are currently receiving 100% remuneration. Provisional results for 2019/20 would generate a bonus pool for staff normally payable with the May payroll. However, this could be deferred or used to preserve jobs. The firm has no plans to make redundancies at the present time.
Gateley asked permission from staff to furlough ‘only if we deem this necessary in the coming weeks’. A number of employees have been identified who will be asked to furlough and agreements are in place. For April, the firm will make up the 20% shortfall.
Shakespeare Martineau’s chief executive and ordinary partners are taking a reduction of distribution and profit share. Ordinary partners will defer the final instalment of their earnings from last year. Less than 15% of staff will be furloughed by the end of this week and salaries will be topped up to 90%.
Burges Salmon says it was not affected in March and is ‘prudently reviewing’ the ongoing position throughout April.
The Gazette also understands that top-100 firm Brabners is furloughing approximately 70 staff and requires all remaining staff earning over £25k to take a 20% pay cut, initially for four months. Pay and bonus reviews are understood to have been cancelled.
Meanwhile, at least one large criminal practice has said it cannot facilitate remote working and cannot pay staff who elect to stay at home.
*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.