Firms are continuing to respond to the coronavirus crisis by cutting working hours and pay. Some have also pushed back the starting date for new trainees.
Pinsent Masons will effectively introduce a 4 day week over the next few months, as it proposes to reduce working hours by 20% in teams where work slows down. Some firms that have cut working hours have brought in a commensurate pay reduction, which seems a fair approach. Other firms have shafted their staff by keeping working hours the same while slashing salary.
But Pinsents is fully protecting the salary for its lowest earning staff, despite the proposed reduction in working hours. There will be a sliding scale in pay reduction for other employees. RollOnFriday understands that no member of staff will be hit with a full commensurate reduction of 20% in salary, even if their working hours are cut by that percentage.
“The scheme will be graduated so that remuneration reductions are fair and proportionate; with our lowest earners being protected in full and, as is only fair and to be expected, with the partners taking on the lion’s share," said senior partner Richard Foley. He added "we believe this sort of arrangement gives us the necessary flexibility so we can dial up and down as the business landscape continues to be shaped by CV19".
Weightmans has taken several steps in response to the pandemic. A Weightmans spokeswoman said the firm forecasts "a short-term reduction in revenues". The Liverpool-headquartered firm has begun a consultation process with staff "with a view to achieving an average reduction in pay of 11% from June", to be reviewed in October.
Weightmans' spokeswoman said that the firm's proposed temporary pay reduction would be tapered "with a 10% reduction on salaries up to £25,000, 15% reduction on the next level of pay between £25,000 and £75,000, and 20% reduction on the excess for anyone paid over £75,000". The spokeswoman said that the lowest paid staff earning £18,000 or less "would see no reduction and those in the London office would be protected further to account for the higher cost of living".
One insider at Weightmans complained to RollOnFriday that they felt that the firm's message was that if they didn't accept the revised contract for pay, they may be faced with the prospect of dismissal. However, another source disagreed with this implication of duress.
"We have asked staff to agree to the proposal but if not, we would enter into a formal consultation as to how we find the savings we need," said the spokeswoman.
The firm's approach to seeking consensus, how some staff see it.
How others see it.
Weightmans' spokeswoman said the firm has dispensed with personal billing and hours targets completely for the next financial year from May. "We have left targets at a team level that reflect budget forecasts," she added. The firm has also paused partner distributions of undrawn profit, and equity partners have agreed a 20% reduction in net drawings. Fixed share partners will also have a reduction of around 16% from June.
At RPC the firm is introducing a number of measures, which include delaying all partner distributions until further notice and applying a sliding scale reduction to monthly drawings of up to 20% for all partners.
The firm's Business Services directors have also agreed to take a salary cut until further notice, applying the same criteria as partners. Managing Partner James Miller said the reductions "are deferrals" and the firm intended "to pay back the reduced income in due course".
The firm's annual salary review is moving from July to November, with bonuses also deferred until then. RPC is not furloughing its own staff, but it is topping up the salaries of staff furloughed by its contractors. Nice.
Irwin Mitchell is putting some staff on reduced hours or on furlough. An spokesman confirmed the firm had asked staff to consider if "temporary employment changes" would be relevant for them. As a result, some staff would have a reduced workload or "take time-out from work to support their health and wellbeing or their families".
RollOnFriday understands that Irwin Mitchell is not bringing in any other pay cuts for staff. Its executive board has taken a 10% pay cut until the end of May, and partners were asked to contribute at the same level on a voluntary basis.
Trainees are also being made to feel the pinch. Cripps Pemberton Greenish has deferred its August trainee start date to March 2021, RollOnFriday understands, setting new joiners back by six months. It did not respond to a request for comment.
If your firm is cutting salary or working hours, or slicing trainees, get in touch.