International firm Osborne Clarke has announced that partners and staff will have to take an 11-month pay cut as the impact of Covid-19 continues to take hold.
Following consultation, the firm said today that UK partners will be subject to a 10% cut in their monthly draws for almost a year from 1 June. The firm has also announced the ‘unfortunate but prudent’ decision to reduce some staff pay by 7% from next month.
This will apply to all staff £30,000 FTE gross and above – anyone who would earn less than this after the cut will automatically have their salary set at £30,000.
Staff have also been offered a number of voluntary options which include taking a part-paid sabbatical, early retirement, a reduction in hours or moving to a job share.
Staff will retain all their benefits including firm pension contributions, which will be protected at their unadjusted salary. The firm has set a financial target for 2020/21 which, if met, will mean it repays employees their salary reductions from the previous 11 months.
Osborne Clarke confirmed last month that a number of support staff had been placed on furlough and external recruitment has been frozen. Those on furlough will remain so until at least the end of June.
Partners also agreed to defer 75% of their special draws going forward and would continue to make capital contributions agreed before the crisis began. A decision on pay reviews is deferred to the autumn.
An Osborne Clarke spokesperson said: ‘While there are encouraging signs that the pandemic is abating in the UK and in some of our international markets, normal economic and business activity is expected to remain subdued at best throughout 2020, and possibly beyond.
‘While we are in a relatively strong cash position, and introduced more stringent cost control a few months ago, the partnership has agreed that further measures are prudent.’
*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.