Slaughter and May partners will be temporarily unpaid as the firm's senior partner announced to staff that his focus was to ensure the firm "survives this crisis".
In an internal email that RollOnFriday has seen, Slaughter and May's senior partner Steve Cooke said that all "discretionary distributions to partners" have been suspended with the money "being retained in the business". He said those distributions in "normal times" would have constituted "nearly all of the payments made to partners". A spokesman for the firm would not say how long the firm anticipated suspending the distributions, or what payments, if any, would be made to partners in the interim.
An insider said that staff were "somewhat pleased...that no salary freezes have been announced and that the first group to have taken a hit is the partners." The source equated the partner distributions being halted as "effectively the same as a company holding back on dividend payments" to ensure that the firm builds up as much cash/working capital as possible.
The source said that associates were awaiting the decision in May on band increases and any pay raises, but "the reality is we know there won't be any increase this year, but the question is whether they're going to decrease pay bands". The source added "in the current context most of the people I know are completely understanding of that, and we just want to know that job security is being preserved as that's really the more important measure."
The firm has taken a rather strict view on holidays. Cooke said that staff must use holiday allowance "when it becomes due" meaning that 10 days has to be taken by the end of June and 75% "pro rata by the end of September". Given the uncertainty as to how long the UK lockdown will last, this could result in many staff going on a summer holiday within the confines of their own home.
"We need to ensure that when the office does reopen, we have enough people to run it and meet our client needs," Cooke said, "which will not be possible if all holiday requests are at the end of the year." He also suggested that in "these challenging times, time off from working at home is just as important as time off when in the workplace." Which may be the right fit for some staff, but appears to go against the UK government's position to allow workers to carry over annual leave into the next two years, so they don't lose out on holiday.
Slaughter and May staff embrace home holidays
"Our firm is enduring a shock of equal measure" to clients "impacted by a substantial loss of revenue", said Cooke in his email to staff. He said that "proportionate action" was required to avoid "more stringent measures and adverse consequences", and acknowledged that "not all decisions will be popular".
A spokesman for the firm declined to comment.