The Dentons scheme is not as flexible as they’d like you to believe. Presented as a choice between 6 months with a 20% reduction across the board or redundancies if they don’t get almost 100% take up...

95% of firms are going to need to take these steps or similar.  Life in the law bubble sees us often escaping the worst of the economic woes but not this time.  

This is just the start of it. 

I hear locally ( from a safe distance obvs) that many firms are furloughing and keeping it quiet. Guess 80% pay and no work is better than 80% pay and still gotta hit those targets.

What about the number of US firms in London laying off their lawyers and support staff by stealth? Are these going to be named and shamed too?

Shout out to the Clifford Chance partners.  Really doing us a solid.  Class act. 

@Anon 24 April 20 08:55

If you have the details, do tell us. We're not exactly mind readers.

Has RoF been able to confirm how many firms are letting go people on probation? 

There are many stories of firms using this time to have a "it's not working out" conversation and binning staff to avoid it being classed as a redundancy situation.

I don't know what the justification can possibly be for not cutting working hours in line with cuts to pay.

"Oh, we're going to need to cut your pay as we anticipate there will be less work and therefore less income. But we'll still need you to work your usual hours because you'll still have just as much work to do. Yes, I know we just said we're anticipating there will be less work. Just not for you. You'll have the same amount of work."

Firms where partners make millions and are in many cases millionaires with plenty of money in the bank futures secure, should not be expecting more junior members of their team - i.e. non partners or those who are not in partnership contention - to take disproportionately harsh pay cuts.  And to enforce this and expect the same level of hours is a disgrace and reflects pure greed.  Fair play to the likes of Slaughters and MdR - the more old school firms - where the partners have a degree of paternal responsibility for their people and lead by example in taking the hit.   There will be a reckoning for those firms that have acted selfishly when all this is over. 

Don’t forget furloughed staff get £2,500 max gross a month unless employer tops up. 

Was “in a strong financial position”.  Yes yous was lah but now youse aren’t.  

most partners will be taking 50% pay cuts one way or another as they are paid on profits and most firms with even a modest income drop will see profits hammered. Some will also be asked to put their hands in their pockets to capitalise their firms or to underwrite capital loans. 

Re. Mishcon, how does furloughing fee earners (bearing in mind the financial caps on the furlough scheme) mean that the partners are "bear[ing] the lion's share" when they are only taking a hit of between 15% and the 50% (we all know the average will be closer to 15/20% which is why they didn't provide an average figure and gave a range instead)?  Lets not forget partner PEP at Mischon is over £1m.

Mishcon is also asking employees to commit to a blind consent to a reduction in hours and pay by up to 30% (again, which is probably a greater hit than the majority of the partners are taking), to be "potentially exercised at some point in the future" - how can you ask people to sign up to something so vague.  Surely they could ask for 15% (the entry point for the partners) and then, if they need more ask at a later date rather than ask for more than any other law firm of a similar size.

Further, whilst a 3.5 day week may initially sound great, in reality if a transaction needs to get done, you'll still work a full week.  

CEO Peter Jackson said the firm "has seen sustained growth over the last two years", was in a "strong financial position", and "many of our teams are still very busy". 

 

..... but yeah still cutting your pay by 20% while you continue to make us more money!

The response from Hill Dicks it’s for 2 months is misleading. Being reviewed after 2 months & will prob be extended

 

Huge pressure has been put on employees to consent. 

 

also still furloughing staff including trainees whose qualification dates will be affected

It is quite bonkers that lawyers are complaining about this. If you haven’t been furloughed then you’re lucky to still be working, because it means you’re (currently) vital for the business. Take your pay cut and keep working, like the rest of the world. Be glad you still have a job.

Anyone who expects to have to work fewer hours as a result has lost touch with reality. 

FWIW I have had to take a 31% pay cut. We did it on a sliding scale so people at the top end of the pay scale took up to 60%, down to 12% at the bottom.

K&E

The Dentons programme has been badged as optional but it’s become pretty clear in practice that it isn’t. They have been pretty explicit about telling everyone that they expect you to sign up and if it’s not 100% take up there’ll be redundancies. Some choice! 

I was a stealth layoff at my shop and struggling to get another job because of recruitment freezes. I am not saying people should be grateful for a significant pay cut, but I would love to have the security of my old job right now. 

I would think the big story here is law firms accessing public funds without being transparent about reducing or deferring partner drawings. Completely changes a firm's moral and ethical obligations in terms of financial transparency.

@ Anonymous 24 April 10:10 -

You are not alone.

If possible, you should name and shame because there are many others (in the big shops at least) in the same situation - students and future employees (including clients of the firm you mention) deserve to know how these firms treat their staff in the bad times.

Anon 24 April 20 09:48

If you have the details about K&E (it has 7 upticks at the time of this post) than let us know so that ROF can do the rest.

Reminder 24 April 20 09:11 Please stop posting this comment, it's getting massively annoying.

those who're still working or on furlough at least get some money. also, "reduced hours" is a joke, when things need to be done there's no escape of it.

there are many got quietly cut, what are the chances of finding a job given the current climate? quite whining & be thankful that u've still got a job

Anonymous 24 April 20 10:10 Not denying there are recruitment freezes, but I've put feelers out and there are definitely firms which are still hiring for urgent roles. Also, firms outside the UK are also still looking for folk. A recruiter I spoke to last week told me a story of someone who was recruited to a GCC office of a large UK firm from somewhere in Asia who has been offered a role and will start once the lockdown has been lifted. 

Stay strong.

Anonymous 24 April 20 @ 10:50 - I’ll reply here too - it was not posted by myself the first time but given that there are many other people in the same situation who have been screwed over by their firm, it deserves to be repeated again and again. I did copy and paste the same language used by the first person who posted it though! But it is NOT the same person and if you looked around you’d realise others have said similar things to say.

The genie is most definitely now out of the bottle about law firm economics, the disparity between partners and staff, and how firms treat their staff.

This pandemic has highlighted the parlous state of some firms’ financial strength, the febrile nature of some partnerships, and how some firms are perfectly happy to shit on their staff and try to dress it up as positive. 

 

When we come out of the other side of this, those firms that have behaved appallingly towards their staff (if the firms survive) will face a day of reckoning.

We have had over 50% of staff (fee-earners and support) furloughed from mid-March, with the remainder of staff being "invited" to agree to a "voluntary" reduction in salary. When the question was asked, 'what if we don't agree?', answer came there none save a vaguely ominous "all options are under consideration"....

@Anonymous 24 April 20 10:54

Thanks. Any chance of linking to these job opportunities? It would help me out massively. Struggling here. Thanks again.

At the end of this, once the market stabilises, significant numbers of fee earners will move elsewhere due to their current firm's treatment of staff during Covid-19. 

At least Dentons is being honest. If everyone agrees then no job losses. If people don’t agree then alternatives need to be considered. That seems a perfectly reasonable and honest explanation to me. 

Anonymous 24 April 20 11:03 There are no specific links to these opportunities. Just reach out to recruiters at the reputable recruitment firms (I'm sure you know who they are) who work in those jurisdictions and have a chat. They'll give you the details...

I really feel for those who have been furloughed/laid off. I have also been laid off but I have sympathy for those in the unenviable position of having to agree to an 80% pay cut or be the first out the door when redundancy comes knocking.

The complaint about being forced to take a pay cut without a commensurate reduction in working days or hours is not about people being ungrateful or showing disrespect to those who have been furloughed/laid off.

It's about the fact that firms seem to be profiting from this situation by paying associates less but still having the same high expectations of blood, sweat and tears. I would happily take a pay cut and work 4 days a week/have a smaller billable target over 5 days. I bet that hourly rates are the same so the only people profiting from 80% salary for 100% expectations are the partners. Not the associates or clients. 

Makes me think my shop (large US-based international) is decent after all.  I used to think they were a bit hard-nosed and would sell their grannies for a quick buck, but there have been been explicit promises that no-one will be cut-loose while we are in this crisis (even if their work has dried up), that there will be no cuts to salaries and that those with the broadest backs i.e. the partners will bear the brunt for the duration. 

There reason why some firms won't slash working hours in line with pay, is because these firms need those people who are busy to work as much as  possilb to keep them afloat. Yes, transactional work has mostly tanked, but a lot of litigation, particularily shipping and transport, is continuing to be stable. 

@ Tobias - if it’s so positive, could you also share your firm’s name?

the pay cut with no reduction in hours makes zero sense. if there is enough to do then the firm will thrive - presumably they are asking for those because there is not enough for them to do - so why not agree a pro-rate on the reduction in hours? It just makes absolutely no business sense but also seems like a massive PR own goal. 

It's said Linklaters is taking the same approach as CC.

Slater and Gordon have dealt with this situation superbly

I too think it's ridiculous to cut pay and 'ask' you to try and work as hard as usual (admittedly with plenty of flexibility and understanding). I'd far rather the company completely disregarded the current economic environment and ploughed headfirst into a brick wall. Ok, so I might be out of a job within a few months, but at least I would have been paid 20% during that time (think of all that extra toilet roll), and there's bound to be loads of companies hiring highly paid staff at the moment right?

I’m busy.  What’s slowing me down is having to drop on well-being calls with bored management types who do little at the best of times but who right now are a total nuisance.  Let those who are busy get on with it and stop forcing us on to calls to listen to some pussy bleating about their deal falling over.

Sitting listening to whining chickens with their heads cut off looking for guidance from management types who don’t know whether they’re on their arses or their elbows doesn’t generate anything that might assist the firm so leave me fu#king out of it. 

So RoF is every law firm now a villain?

Isn’t the real question this:  

how can a firm say on the one hand there isn’t enough work to do or there is a concern about a slow down so staff have to take a pay cut, but then say at the same time that there is enough work to do so staff have to still work the same hours and hit the same billing targets?   This sounds like law firm casuistry at its worst.  

Has it dawned on you that your firms are trying to protect themselves in 3 month time and beyond?  Your firms have no cash reserves, they need to build cash reserves and fast.  Salary cuts help them to achieve that. What’s being done now is in anticipation of where we are likely to be in months 3-12 of this year.  Of course there will be those that don’t cut salaries and will slam hard into a brick wall.

Which firm would you prefer to be in? 

I still content those firms who are asking employees to take a pay cut with or without a cut in hours, are taking the easy way out.  Leaders need to be leaders and start dealing with the hard issues a lack of strategy and the under-performing talent, systems and technology.  There is a reason why some firms are not asking employees to take cuts etc. 

@ Delicate Tarquinius 24 April 20 13:00

sounds as if you are at the same firm as me. Every day for weeks now we’ve been subjected to the same negative deadhead crap and passive aggressive arseache from our “leadership” who have nothing to offer in the way of leadership, having nothing on in the way that contributes to the bottom line, and clearly don’t know what to do with themselves other than “manage”.

im sick of it and I pray that this firm is properly purged of these tools and at the end of all this the firm is in better shape.

@ thick or think 

Your comment doesn’t address why partners are not taking the major hit first, given they are normally - especially at the top end - more than able to afford it. 

 

If you’re right, and firms are cutting now to protect a downturn in work in three months, then it follows that in three months people paid 80% will only do 80% of their hours, doesn’t it?  Let’s see.   Let’s see if in fact in three months and beyond many are being paid 80% or less but are still expected to hit their hours.  And what happens to that extra money?  If an associate is billing 100% of a target, but getting paid 80% of a normal salary, someone is benefiting and it isn’t the associate.   Have a thick or think about that.  

As someone who has worked in a countercyclical practice area for a long time, from a selfish perspective I have no need to take a pay cut/reduced hours (recruitment seems to be buoyant in my area) but am prepared to do so if it results in a 6 month window of job security for lawyer colleagues in areas that typically take a beating during recessions and, equally as importantly, secretaries and other support staff who are likely struggle, at least in the short term and probably longer, to find alternative employment if cuts are made now. Anyone who has been at law firms during downturns will know how much morale drops when cuts are on the horizon, even if your own job is not at risk. I am far from naive and it may happen that reduced hours are not as reduced as anticipated for lawyers (but that is the norm anyway - we are often our own worst enemies in not handing over matters or delegating). My firm is at least trying to do the decent thing and open to agreeing at individual practice group levels blocks of time off for lawyers as part of the process, in recognition of the reduced hours ask (acknowledging that transactions typically bleed into odd days off) but also with a view to accommodating individual needs around childcare and other circumstance. Time will tell if it works as expected (assuming sufficient people sign up), as working patterns obviously need to dovetail with client needs so there is a viable business going forward.

Its astonishing how few firms have sufficient resources to ride this out. Clearly there have been too many drawings and/or dividends in previous years to prevent a float to absorb a tough financial climate. One expects the local high street firms to live hand to mouth but not the larger firms. 

Grow some balls and just do 20 pc less

Anon 24 April 20 10:57 I'm not the same person who commented on the other article. I just agree with them that the constant posting of these comments is annoying.