Large firms in the UK are taking fundamentally different approaches to cutting the pay of their workforces to deal with the impact of COVID-19. While some are expecting staff to carry on working for five days a week with the same billing targets, others are bringing in commensurate reductions in working hours and targets.

London firm Fladgate has reduced associates' salaries by 20%, said sources, but has not reduced their working week from five days to four. "Oh and billable targets remain the same", said one of its lawyers. "Nice. #fladgatefamily". The firm did not respond to a request for comment.

Hill Dickinson has asked all staff earning £30k or more to accept a 20% pay cut. "And we’re all still expected to work the same hours/meet the same targets". Responses were required by Thursday, "but information provided from the CEO suggests it will be implemented for everyone if the 'majority' agree, even though that would obviously require them to breach the contracts of those that did not agree". In response to RollOnFriday's query, the Liverpool-based firm issued a press release confirming that all staff are being asked to reduce their pay by 20% for two months, and that annual pay reviews in May will be postponed until later in the year. 

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 "nevertheless, we are making some prudent changes to reflect the uncertain outlook in the global economy and the pressures some of our clients are feeling". 

Eversheds Sutherland in Ireland, which is not part of the Eversheds Sutherland International LLP, has brought in 20% salary cuts for almost everyone in its offices in Dublin and Belfast, and larger graduated cuts for those earning over €80,000. Contractual terms and conditions will remain the same, said a spokesperson. 

She told RollOnFriday that the measures, which take effect on 27 April and don't apply to the rest of Eversheds Sutherland, will see senior partners "taking the most significant overall reduction in salary".

"Due to the current unprecedented situation we have found ourselves in, we needed to prepare our business for the next few months rather than weeks and make some short term tough decisions to ensure long term sustainability", said the spokesperson. "All reductions are difficult and aren’t made without much thought and consideration but from our own market information the reductions made by Eversheds Sutherland are at mid- level".

"A number of Dublin based law firms have made significantly higher cuts across their businesses in addition to taking other measures, which we did not take", she added.

An insider expressed unease about the firm taking advantage of the furlough scheme in Belfast and wage subsidy scheme in Dublin, and about the pay cuts, when its financial state was opaque. "I accept no layoffs were introduced which is a positive", they said, "and I don't want to suggest that firms are not affected (work has dropped off and cash in is a difficulty)", but law firms in Ireland "are very secretive about profits" and "there is a serious sense that the extent of such cuts is somewhat of an overreach for otherwise extremely profitable firms without a fully explained basis and facts and figures". A spokesperson responded that the measures taken were intended "to protect the jobs and the long term strength of the business". 

Major Scottish firm Anderson Strathern has brought in a 10% pay cut for all working staff. It has also furloughed over 60 people, without topping up their pay, "despite a published 28% increase in profits in 2019", said a source. Those still working are expected to do as much as before.

"Staff morale is understandably low, with a particular bone of contention being the regular threatening emails about time recording and meeting targets", said an Anderson Strathern insider. Partners are understood to have taken a 10% cut as well, having declined to defer their distributions. The firm did not respond to a request for comment.

Fieldfisher's quieter teams have been made to work 4 days a week, said a source at the firm. Everyone else who earns over £50k is seeing a 10% pay cut between 1 June and 31 August, said the source, adding, "They’ve said it’s by consent but if we don’t agree the firm will force us". Surely not.


casey

Every email in 2020.


Other firms are matching the new, reduced pay with new, reduced hours, following the lead of Norton Rose Fulbright. Instead of sweating their assets for less, they appear to be seeking to genuinely reflect anticipated downturns in work while continuing to pay staff as much, pro rata, as they were before the pandemic struck.

Mishcon De Reya is one such firm. James Libson, its new managing partner, sent a firm-wide email last Friday asking all employees to consent to a reduction in hours and pay by up to 30%, to be potentially exercised at some point in the future. The plan could see Mishcon's lawyers working a 3.5 day week. 

Libson told RollOnFriday, "In response to the COVID-19 crisis, we have made a series of prudent decisions in order to protect our business, preserve jobs and continue to service our clients fully. Many of these decisions have been difficult to make".

They include requiring partners to make considerable adjustments. The firm has reduced their drawings by between 15% and 50%, and all profit distributions have been frozen "until further notice". 

"In line with our core values, it will always be our policy that our Partners bear the lion's share of any cuts we deem appropriate to protect our business", said Libson.

The firm has also furloughed some staff "who cannot do their job in the current environment, as well as those in areas of the firm where work has reduced because of the crisis". 

"We do not anticipate taking further steps", said Libson. "However, in case the climate and therefore the threat to our business worsens we will also be asking everyone in the firm to sign up to reduced working hours and pay. This move to reduce working hours and pay by up to 30% would only be contemplated if market conditions dictated and we had already asked the Partners to take further reductions".  

Highly-placed insiders at Pinsent Masons told RollOnFriday the partnership is investigating a similarly reduced working week with a pro rata reduction in pay. A partner call was held on Wednesday morning discussing the move, with measures expected to be announced internally in the next few days. One source, who presumably works in restructuring, queried the statagem. "Some teams (including mine) have more work on than they can do in 5 days, let alone 4", they said. Ooh, get you.

Dentons is also reducing work alongside pay, but only for those who volunteer. It is asking employees in its UK offices to agree to "flexible reduced work patterns" for six months from 1 June. The starting point is a four-day week, with a proportionate 20% reduction in salary, but the scheme is malleable. "It can be applied across different periods in different teams to respond to client needs, workflows and individual choices", said a spokesperson.

Dentons partners are taking a sizeable hit. Partner distributions are being deferred and drawings are being reduced by 20% for six months. And they have to continue with full working weeks.

UK and Middle East CEO Jeremy Cohen said, "The impact of the pandemic could be longer or shorter, deeper or shallower than we currently anticipate. While our work patterns have held up reasonably well so far, all the economic indicators point towards an unprecedented contraction of global GDP over the coming months. We are therefore taking these pre-emptive measures as the most prudent course of action".

Dentons has also furloughed "a number of employees who are unable to effectively work remotely, or from teams where full capacity is not currently required", and is topping up their salaries to 100%.

Clifford Chance is taking a markedly different approach to all the above. While it has put salary reviews on hold and deferred partnership profit distribution, it has no plans for four-day weeks, or pay cuts, or furloughs. And bonuses will be paid, although larger ones are being split in two with the second instalment payable in November.

"We are a strong and resilient organisation, with over five years of robust global growth behind us", said a spokesperson. "Our teams are always a source of huge pride, they are fantastically talented, motivated and collaborative, and never more so since the virus has begun to spread. Over the coming months our aim is to keep these teams together and to work shoulder to shoulder with our clients who need our support now more than ever". Brings a tear to the eye, so it does.

Tip Off ROF

Comments

Starfish 24 April 20 08:30

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...

Get real 24 April 20 08:41

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. 

Dearie 24 April 20 08:54

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.

Anon 24 April 20 08:55

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?

TGIF (or is it???) 24 April 20 09:04

@Anon 24 April 20 08:55

 

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

Reminder 24 April 20 09:11

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.

Anon 24 April 20 09:13

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."

Anon 24 April 20 09:15

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. 

Hill Dicks 24 April 20 09:30

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

Parsnip 24 April 20 09:30

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. 

Anon 24 April 20 09:32

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.  

 

Anonymous 24 April 20 09:37

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

Anon 24 April 20 09:48

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.

Anonymous 24 April 20 10:09

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! 

Anonymous 24 April 20 10:10

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. 

Anonymous 24 April 20 10:24

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.

WT 24 April 20 10:27

@ 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.

TGIF (or is it???) 24 April 20 10:41

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.

Anonymous 24 April 20 10:50

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

Anon 123 24 April 20 10:52

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 10:54

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.

Anon 24 April 20 10:57

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 Seer 24 April 20 11:00

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.

 

 

Anonymous 24 April 20 11:02

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 11:03

@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.

Anonymous 24 April 20 11:09

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. 

Anon 24 April 20 11:15

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 11:18

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...

Anonymous 24 April 20 11:20

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. 

Tobias 24 April 20 11:22

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. 

Anonymous 24 April 20 11:25

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. 

 

Parsnip 24 April 20 11:28

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. 

Anonymoustache 24 April 20 12:58

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?

Delicate Tarquinius 24 April 20 13:00

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. 

Anon 24 April 20 13:11

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.  

Thick or think? 24 April 20 13:35

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? 

 

Anonymous1 24 April 20 14:08

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. 

Plankton 24 April 20 14:45

@ 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.

 

Anon 24 April 20 14:53

@ 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.  

Pragmatist 24 April 20 14:56

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.

Anonymous 24 April 20 14:59

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. 

Anonymous 24 April 20 16:14

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.

Thick or think 24 April 20 16:45

Yes if the associate paid at 80% does 100% of their target then somebody is benefitting.  Who could that be?  Err, erm, now let me think.

Oh yes, it might be one of the associates friends who works in the property team.  He’s sat there doing pretty much nothing because nobody is buying, nobody is selling and nobody is leasing.

Now here’s the question, would the associate like to earn 80% and help to keep his friend in a job or would he want to earn 100% and see his friend join the dole queue?

 

All of you wanting to retain 100% - selfish bastards.

All if you seeing the bigger kinder picture - well done. 

 

 

Tobias 24 April 20 17:17

@Saibot

I don't feel the need to do so, no, but I'll certainly reveal more if they back-track. 

Anonymous (2) 24 April 20 17:43

Anonymous 24 April 20 16:14 I’m not the same person who commented above, I just disagree with you that posting the same comment is annoying. Don’t read it.

SecularJurist 24 April 20 21:38

A lot of contenders for this year's Golden Turd, it seems.

Some observations:

This pandemic and the resulting economic hit (not just on law firms) is indicative of a flawed economic model based on GDP and big is beautiful. The furloughs and alleged profit-grabbing and mal-treated associates and staff is indicative that the large international practice is no longer sustainable, and the pre Big Bang traditional City Firms of the early to mid-80s should come back. There would be a lot of demergers.

Whether one has been furloughed, been given a pay cut but expected to still meet targets and work 5 (or is it seven?) days a week, be always 'on', or working fewer days for less (but being paid the same pro rata), this pandemic has shown that working for an MC/SC/US corporate law practice is no way to live. 

People will be made to think of their priorities and lifestyle. Focus on what you need, not what you want.

Is it worth the dry, tired, bloodshot eyes, dry, pasty skin, bad diet, the shirt sticking to your back, stained armpits in the shirt, rumpled suits, rank atmosphere in the office, artificial lighting, no time for hobbies (music, creative writing, art, culture, outdoor activity, a course of study)? It's a matter of choice, though!

If you want to stay in the law, is there a better way than currently? If avoiding getting stiffed by the EPs/SPs is all one has to work for, that's bad. 

One should pity those people, not envy them. Nor judge them. People have made their choices, but can change their minds. 

 

 

Anon 25 April 20 08:12

@ thicky

listen thicky, your made up example is delusional and naive.  There is no way anyone who has no work to do will be retained on full pay.   They will be furloughed if they are lucky and take a huge pay cut or more likely be let go.  So, we are back again to the busy associate hitting 100% of their target and being paid 80%.  Which I note you won’t address.  

Anonymous 25 April 20 12:44

@ Anon 08:12

It's a short-term measure - someone working at 100% will support someone who's quieter, as are both of them in respect of someone on the business side who may be even quieter.  I don't see that as an issue - if you do then you're an absolute knob. 

Thick sociopath 25 April 20 12:55

The thick naive sociopath who is labouring their dissatisfaction at the associate doing 100% of the work for 80% of the pay really does sum up what a poisonous environment the law has become.

My firm recognises that its property and corporate teams will struggle.  Already they are at 50% capacity so 50% of the team could be made redundant right now. 

We are not doing that.  Collective pay cuts mean we can retain our high quality colleagues.  I appreciate this is unlikely to compute with your standard “me” focused sociopathic lawyer but it’s the way it is.

I am at 100% capacity but I don’t begrudge my pay cut.  I want to help to protect my colleagues and their families so it’s a small price to pay as I see it. 

The trickle down effect 25 April 20 13:36

Don't worry.

In good times the rich get richer.  And conversely, in bad times the rich get richer.

Learn a bit of economic theory.

And suck it up - peasants.

Buddha of Suburgatory 25 April 20 13:38

Free yourself from attachment to material things.

And go easy on the wheat and dairy.  It means less bloating.

Anonymous 25 April 20 13:57

@ Anon 08:12

You ever think that the same amount of work might be there but that a firm might be unable to recover the same amount of fees from a client?  Maybe working hard but taking a hit on fees to keep market share in a tough time is worth a salary hit too.  Because when it picks up, as it will at some point, those clients will still be there.

Anonymous 25 April 20 14:12

Don't believe that you have read about Mishcon!

They have carefully choreographed articles about how the partners were taking the lion's share etc and that had done their housekeeping and furloughed who they were going to furlough. 

Less than 24 hours later they furloughed an additional 70 lawyers and are barely topping up.

Furloughing in this climate is fair enough but don't run a PR campaign the day saying the opposite!

 

RTA Manchester 25 April 20 17:48

It must be a complete nightmare doing Def insurance claims in some of the larger firms. Anxiety and worry x 10. Most managers dont give a shit about their colleagues who have no or less work.  It's pure self interest and forget being a team player.  I see insurance rates getting lower and the each man for themselves culture becoming entrenched. Some of these firms will not survive this CV19 lockdown. Some inept managers will somehow survive however by throwing their team mates under the bus.  They have started that already by stock piling the work since before Xmas 2019 raher than allocating it fairly within teams

Bird from the Co-op 25 April 20 22:20

re: RTA Manchester, that description of the office culture is spot on. Sounds very much like working at that RTA outfit operating by the bus station in Piccadilly.  

Anon 26 April 20 08:19

If you have the details about K&E (it has 12 upticks at the time of this post) than please let us know, so that ROF can do the rest. Keen to know what they are up to! Thanks

Anonymous 26 April 20 09:38

This is going to be at least as bad, if not worse, than 2008.

Salaries took forever to recover from 2008 and now they will drop again.

I foresee a lot of lawyers giving up on the progression after Covid-19. A shame that talent will be lost from this industry. 

 

Then not Than 26 April 20 10:27

Tbh I wouldn’t count on RoF to report “and do the rest” on stealth layoffs, if you read about the culture, the large number of hires compared to other US firms and the astronomical number of salaried partners without books of business of their own, you should know exactly what they’re up to.

Anon 26 April 20 11:19

Some firms may seriously struggle without cutting costs.

Some firms are owned by multi-millionaires who could comfortably prop up the finances but will not.  Why hand back a small part of 10 years of bumper profits when you can cut costs instead?

Crisis? What crisis? 26 April 20 13:50

We've got a no-deal Brexit to come on top of this at the end of the year.  That's going to add all sorts to the mess.  If, as looks to be the case, the lunatics in government refuse to extend the transition period then parts of the country are going to experience 19th century levels of poverty.

Outside of the south east we are already at best a middle-ranking economy.  With a creep of EU and eurozone finance away from the City we can look forward to widening gaps between rich and poor, north and south, England and Wales.  NI will find additional incentives to call for a border poll as set down in the Good Friday Agreement and the Scots Nats will find fertile ground for their efforts.

If you've ever thought about moving abroad now is probably a good time to explore your options in detail.

And I don't want to be a gloomster but there's no rule saying crises can only occur one at a time.  You might be interested to know that over the weekend the UK was importing 15% of it's electricity for example.  There are lots of weak points in our infrastructure as well as our other systems and the last 10 years have seen just about all the slack taken out of every support network we have in the name of austerity.  How could we cope if, for example, we got hit by another foot and mouth outbreak over the summer?  With this lot in power?

another anon 26 April 20 22:08

Most UK firms are at their year end and almost all who are proposing pay cuts admit they had a good year through to May 2020. Almost all are also saying they will delay distributions to partners until they have a clearer picture of what revenues are like in the months ahead.  So this means that all these firms have at least some cash reserve for the 'bad times" projected in the months ahead. In addition, most have taken advantage of govt support and furloughed those employees who cant work from home.

Once that is taken into account, it seems to me that the most probable reason for partners to cut employee pay is so that they can avoid burning their cash reserves. Ultimately it is just an attempt to claw back some of their their lost profits. To my way of thinking it is only right that partners should take the risk of a downturn in business - they are its stakeholders.  Most of them don't dish out money to employees when they've had a particularly good year. Similarly they should not expect a bailout from employees when they have a bad year. If things get bad, they will inevitably start to make the people who are not working redundant. All the talk about avoiding job cuts is just poppycock to make the pay cuts more palatable.  

Realist 27 April 20 09:39

@April 20 22:08

I agree and what makes this worse is that these firms run accruals-based financials so the "good year" line that's being peddled by a good many of them will be based on IOUs, i.e., WIP that may not be paid/paid in full, so their financials may well be shit in reality. Plus the near-term debt and fully-drawn down revolvers that they are likely to have and short and medium term liabilities that can't be turned off (lease commitments etc) all create material uncertainty on the integrity of their financial fundamentals.

Anonymous 27 April 20 13:59

Watch out for the publically listed firms who include WIP in their accounts as turnover.  

Anonymous 27 April 20 14:58

Crisis? What crisis? 26 April 20 13:50

You'r not wrong.  I have heard that the repair bill for potholes from one bad winter could tip a lot of local authorities into bankruptcy.

We are living in interesting times mates.

Redberry 27 April 20 17:16

The concept of working the equivalent hours of a 5 day week but only being paid for 4 days isn’t particularly new sadly - just ask the majority of women who return to work on a part time basis after having children. Not sure why it is only being called out now. 

Anonymous 28 April 20 07:36

We wait until nightfall, and then leap out of the large wooden rabbit, taking the associates by surprise, and not only by surprise, but totally unarmed!

Anonymous 28 April 20 07:47

@ Crisis? What crisis? 26 April 20 13:50

In the infantry there is a phenomenon known as "dead man's click" when you fire off all your ammo needlessly and then the enemy appears.  You pull the trigger and click.

In other news the govt has announced that Operation Yellowhammer, the mitigation project for a no-deal Brexit, has been stood down.

Lawyering is mostly about mitigating risk.  Be careful folks.  Be thrifty.  This aint getting better any time soon.  It could very well get a lot worse.

Things could be worse 28 April 20 12:46

I dunno what you lot are complaining about.

In an alternative timeline we'd just be coming to the end of five years of chaos with Ed Milliband.

Mickey Mouse 28 April 20 16:59

Just heard that those nice people at Weightmans have announced across the board pay cuts  of 10% for anyone earning less than £25k capped at £18k lower limit. Employees earning between £25k - £50k are expected to take a 15% pay cut and anyone above £50k are being asked to take a 20% pay cut for a minimum of 4 months possibly up to 12 months. There is no corresponding reduction in billable hours and targets. Weightmans have announced this without any consultation and are planning to present staff with revised contracts of employment to "accept" with the message that if anyone doesn't accept they may be faced with the prospect of dismissal. This sounds a bit like unilateral variation of the terms of a contract and economic duress to me? Might be worth asking Weightmans for a comment? 

Anon 28 April 20 19:55

Approximately 110 health and healthcare workers have already died, many of whom earn considerably less than the living wage.

Some of you won't be able to upgrade your cars or take three vacations this year.

Yours,

Sense of Perspective

 

Weightmans employee 28 April 20 20:57

@Mickey Mouse - I work for Weightmans, and you are wrong about the figures. It tapers at 10% up to the first £25k of your salary, and 15% for the balance above £25k. So we’re not talking anywhere near a 20% pay cut. Higher ‘lower limit’ for London as well. You are also wrong about everything else. There was no ‘duress’ from my perspective. The firm have been transparent throughout this and unless you want to watch a national employer go bust (along with your job), you do your bit. 

Your point about no reduction in hours - if everyone is able to work at full capacity for the foreseeable, the quicker the firm will recover its revenue. They advised there will be no personal targets next financial year. 

Weightmans 28 April 20 22:55

If that’s true they will feel the wrath of their people when all this is over.

Has anybody else imposed a pay cut like this?

Men of straw 28 April 20 23:46

Dear sense of perspective

Just because one sector of society has been let down by their employers and their government that doesn't mean that everyone else should expect similar treatment.

You might as well say that I should be glad to be punched in the face because I wasn't murdered.

Anonymous 29 April 20 06:39

Equity partners should bear the brunt of a firm’s losses, not salaried fee earners and secretaries.  The equity partners keep the profits to themselves in good times (the bonuses for salaried employees at Hill Dickinson are derisory), yet in this pandemic they are making the employees bear the losses to soften the blow of smaller profits and to save them from having to make redundancy payments and re-recruit in a year’s time. Hill dickinson management have emphasised the fact that equity partners are also taking a 20% hit on their remuneration alongside salaried staff. However what we want to hear is that partners won’t take any profits for the next few months and will inject cash into the business. 

I'm Brian, so's my wife 29 April 20 07:04

Your sense of perspective is similar to that bloke from Life of Brian who was hung upside down in prison for 25 years and said "lucky bastard" every time Brian got beaten by a guard".

Rather than dragging everyone down to the same level, why not raise everyone up?

Legal eagle 29 April 20 08:35

Weightmans have absolutely NOT been transparent in this process. They waited till the end of the financial year to make this announcement so to ensure all fee earners had billed as much as possible. Then when the partners saw the piggy bank was full we were invited to a hastily arranged zoom meeting at 24 hours notice to be told to accept a pay cut or face dismissal. No prior consultation, no explanation of how the proposed pay cut percentages were calculated, and clearly no regard for their employees. This comes after months of constant gibberish being rammed down our throats about mental health and well being which was clearly nothing but a PR exercise. The people in charge at weightmans are completely clueless and will face an employee backlash. You cannot unilaterally vary someone's contract with threats of dismissal, that's not legal.

Anon. 29 April 20 10:10

And yes. You should be pleased to have been pushed in the face instead of being murdered. What a ridiculous (and tasteless) comparison. 

Tobes 29 April 20 10:35

@ Mickey Mouse 28 April 20 16:59

How would it be a unilateral amendment of a contact if the employee agrees to it.  If they don't accept it then their contract stays as is, but yes, they may be faced with losing their job.

Also - "economic duress" isn't a thing i.e. you can't go to court arguing that you were forced into a contract by "economic duress" .

Are you a lawyer?

@Legal eagle 29 April 20 11:02

What planet are you on? 

They did not 'wait' until the end of the financial year - they have been forecasting, like every other firm, with the little information they have about what the future is going to look like. There's a reason why most law firms are now announcing these measures around the same time as one another. And if they did 'wait' to try and keep moral up and boost revenue, then so what? More cash, generated from more revenue will save more jobs. 

Fee earners should bill as much as possible, regardless of announcements. That is our one job, is it not? 

Hastily arranged? No. A call with not much notice? Yes. So rather than sending an impersonal email, the message was delivered to us via the MP. Everyone would be complaining about an impersonal email if that's the method they chose. They can't win. 

Accept a pay cut or dismissal? They were transparent about projected revenue, and outgoings. Unless you were in a different meeting to me, it's plainly obvious that they will not survive this if people don't take paycuts. They have reduced partner drawings more than our pay cuts, scrapped partner distributions for the foreseeable, minimised other expenditure as much as possible... It was made clear that if you didn't want to accept the pay cut, you could enter a consultation with them... that's not unilaterally varying anyone's contract now is it? If you're an expensive employee and bringing in F A fees, you'll be shown the door over the next few months regardless. 

No doubt you're not a team player, and I hope you don't work at the firm much longer... go ahead and vote with your feet and find a job elsewhere.

... and before you accuse me of being a partner, i'm not. Mere employee looking outside their bubble of woe is me and looking at the bigger picture. 

Anon 29 April 20 11:27

If you’ve got two years or more of continuous service and can afford it just say no to Weightmans.  They will face multiple unfair dismissal claims. 

Tobes 29 April 20 12:20

@ Anon 29 April 20 11:27

What?  You're saying that a company can't dismiss people due to a negative economic outlook because that's "unfair"?  Wise up. 

I can see why Weightmans is struggling given the quality of the legal input coming from people associated with it.  Or why some of those people are worried about being given the boot. 

Legal eagle 29 April 20 12:24

LOL a mere employee, hilarious. Your falsified passion in your falsified role is honourable. Nice to see weightmans taking the North Korean approach to PR. You're talking complete nonsense and you know it, as does everyone in that meeting. you can spew your propaganda on this forum with little come back but you will find out shortly what your employees think. KR.

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