The legal sector is taking full advantage of the government's furloughing deal and sloughing off hundreds of staff.
But firms have adopted very different approaches to supporting employees, with some topping up furloughed staffs' salaries and others declining and, in addition, imposing pay cuts on people who continue to work without reducing their hours.
Under the government scheme, the taxpayer funds 80% of each furloughed employee's wages up to £2,500 a month for three months.
Eversheds Sutherland has furloughed 39 staff whose roles cannot be performed remotely, including receptionists and facilities team members, for three weeks. But the firm is topping up all their pay. It is also deferring all salary reviews and bonus payments, while partners are inching towards taking a hit. "Discussions are ongoing", Managing Partner Lee Ranson wrote in an all-firm email sent yesterday, "but the expectation is that drawings will shortly be reduced and/or deferred". DLA Piper has also furloughed its front-of-house and facilities teams.
Liverpool-based Brabners, which also has offices in Manchester and Preston, has furloughed 75 staff. But sources criticised the firm for imposing a 20% pay cut on the remaining, working staff. The cut will last at least four months from 1 April and employees are expected to work full time.
In a joint statement, Brabners managing partner Nik White and CEO Robert White told RollOnFriday that the COVID-19 outbreak had "negatively impacted a significant number of our clients across a range of sectors".
They said the pay cut will apply to partners, too, as a 20% reduction of their drawings, and will only apply to employees earning at least £25,000 a year. Those below the threshold will see their salary reduced by a percentage that ensures they still earn at least £20,000 a year.
“While we fully appreciate the significant impact these measures will have on our colleagues, we believe they’re necessary to ensure the firm can successfully navigate the current uncertainty", said the Whites.
Addleshaw Goddard confirmed it was furloughing paralegals, though not all of them. AG said it was not topping up furloughed employees’ salaries "out of fairness to those who continue to work full time".
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Taylor Wessing has furloughed staff whose roles were impacted by the move to remote working. But the firm is topping up their pay to 90-100%. In a statement, Managing Partner Shane Gleghorn said Taylor Wessing told RollOnFriday the firm was also withholding distributions to partners and pausing recruitment.
Taylor Wessing is also "requesting" that people take their pre-booked holidays. Even though staff now can't go anywhere, "being able to have rest periods from work is even more important for wellbeing, especially when working from home", said Gleghorn.
Employees, directors and partners at the firm must use up two thirds of their annual holiday by the end of August. Gleghorn said the measure was required to "support client demands" and to "avoid disappointing holiday requests towards the end of the calendar year". Asked why Taylor Wessing couldn't change its policy to allow unused holiday to be spread over the three years following release from lockdown, a spokesperson said, "We could allow people to carry over all their holiday, but that would have a negative impact on our ability to service clients at a time when we believe business will have picked up. That would be in no one's best interest".
Foot Anstey was slammed by insiders for cutting salaries by 10% and furloughing staff. "Appalling treatment", said one. Staff were asked to volunteer last Monday and a selection (circa 25%) were furloughed by that Friday. Others were moved to a three or four day week. "No consultation and no choice. Not a great way to engender loyalty in your employees!" said a source.
"These are unprecedented times with every firm being forced to make difficult decisions", Foot Antsey told RollOnFriday in a statement. "After careful consideration, we have acted to best protect the jobs of our people and reduce the long-term impact on the business. We have put in place a number of temporary measures affecting firstly Partners but also employees. These include taking advantage of the Government's furlough scheme, flexible working models and, for those not affected by either of these, a temporary 10% pay cut. All of these measures will remain under constant review with protecting jobs our main priority”.
There was dissatisfaction, too, at London-based real estate specialists Silver Shemmings Ash. It has furloughed seven members of staff, said a source, without a top up, "and is trying to force the other staff to take a 20% pay cut, all of which has led to the resignation of one partner".
A spokesperson for Silver Shemmings Ash said that account was "not entirely accurate". He didn't specify precisely how it was inaccurate, but explained that, "like all businesses, Silver Shemmings Ash has had to make some difficult decisions".
"Unfortunately some staff were asked to consider being furloughed", he said. The firm's partners have been "asked to consider" taking a voluntary 20% reduction in their salary, while payment of all bonuses, salary rises and non-critical spend have been suspended.
Freeths furloughed over 110 staff on Monday and more rounds are planned as soon as next week. The firm is topping up all affected employees' salaries to 100% for the first three weeks, after which the strategy will be reassessed, and has deferred April's distribution to partners. It has also cancelled the bonuses for 2019/20 which were due to be paid in May. A source complained this was despite Freeths ending the financial year "with best ever revenues in excess of £100 million", and said claimed it was looking to use the cash to fund redundancies.
"Freeths had another highly successful year in 2019/20 with turnover once again increased by over 10%", responded the firm in a statement. "However, the firm’s forward planning is of course influenced by the current situation and it is expected that there will be a reduction in activity levels".
It said the bonus pot would be preserved "for the benefit of staff later in the year", potentially "to preserve jobs rather than being paid out as a deferred bonus". The firm said it had "no plans to make redundancies at the present time", but that "no decision has yet been made on the bonus pool".
Burness Paull has furloughed some 150 staff, and is topping up all their salaries. "The firm is financially robust, and we are not planning to make any redundancies, cut pay or enforce reduced hours", said a spokesperson. Partner drawings "will be reduced", said a spokesperson, "and we are considering further measures including deferred payment of partner profits".
“Everyone has been fully engaged in discussions about why this course of action is appropriate and their response has been very positive and understanding”, he added. All except the disgruntled source who told RollOnFriday that Burness Paull was only topping salaries up to a maximum of £45,000, which was "a massive pay cut for many". Fetch the tiny violin (play it to your neighbours).