Morgan Lewis has bucked the trend for furloughs, pay freezes, pay cuts and redundancies and actually raised the salaries of its business services staff.

The US firm has increased almost all admin professional salaries by 2%, for cost of living, from 1 April.

The raise, which applies globally, excludes new starters and directors. While it's not millions, it stands in stark contrast to the cutbacks being brought in at other firms. "A really nice and unexpected touch at this challenging time", said a source. "Definitely a Lockdown Champion!"

That's not the cry from most insiders at the moment. Reed Smith has announced a pay cut of 15% across the board for all associates. An aggrieved source said the percentage drop equates to seniors working "for almost the same salaries as juniors who can't draft board minutes". The drop is effective from 1 May until August, sources said.

Wright Hassall is making 12 redundancies and furloughing 44 members of staff. "It has furloughed most support staff, even where the work exists," said an insider, adding that the firm was making other staff pick up that work. 

“Out of a staff of 280 we have been unfortunately forced to remove a small number of positions, while other staff members have been furloughed in accordance with the Government’s Coronavirus Jobs Retention Scheme" said the firm's managing partner, Sarah Perry.

Perry added that the firm's management team had been "massively impressed" by the response of staff to adapt their working and personal practices to help the firm "operate successfully in what is a dreadful time for the economy and the country as a whole.”   

Gowling WLG is asking some staff to take unpaid leave, RollOnFriday understands. The firm is taking a number of other measures in response to the pandemic, including furloughing some staff and asking others to work reduced hours for reduced pay, an insider said. But it will be particularly tough on those staff on unpaid leave, especially knowing that their furloughed colleagues are at least getting paid.

The measures by Gowling WLG are set to be in place until the end of October this year.  Each team was told that they "needed to reduce salary costs by 20%", claimed the source. 

Gowling WLG did not respond to a request for comment.


How Jack thought unpaid leave would look:

Surf

 

How it actually looked:

beans


Goodman Derrick is cutting its staff pay by up to 25%. “Like other firms who rely on a large amount of transactional activity, we have already experienced a significant drop off in the market and expect this to continue for some time," the firm's senior partner Edward Hoare told RollOnFriday. Management's key concern was to "save as many jobs as possible", said Hoare and "a short term voluntary pay reduction across the whole firm would be the most effective way to do this."

The London-headquartered firm cut partner pay by 25% and then "proposed a voluntary scheme to all staff" which had resulted in "a 25% reduction in pay for those earning more than £40,000 and 15% for those earning below that amount." The reduction is set to be for the next three months but subject to a monthly review. "There was almost unanimous acceptance within just a few days,” Hoare said.

But some other firms bringing in pay cuts are allowing staff to work fewer corresponding hours. 90% of eligible staff at Norton Rose Fulbright have agreed to the firm's Flex scheme for their salary to be cut by 20% for the next year, in return for a commensurate reduction in their working hours. So, those signing up will be reduced to a four-day working week. "Our people have come together during what is a challenging time, to support their colleagues and the firm," said EMEA managing partner Peter Scott.

NRF proposed the Flex scheme to staff earlier this month, having previously adopted the policy in 2009 as a response to the financial crisis. The scheme will be effective from April in the firm's Europe, Middle East and Asia offices. 

Ashurst is also planning to bring in a similar measure, as it has asked staff to agree to a pay cut by 20% for an equivalent reduction in working hours, for the months of May to July. The firm is also reducing partner drawings by 20% for the next six months. The City firm will defer salary reviews until November, and 50% of staff bonuses will also be held back until then. 

"We are looking ahead in a responsible way", said Ashurst's Global Managing Partner Paul Jenkins, adding that given the global economic slowdown "we may see less activity in the markets in which we operate".

With many legal staff feeling the heat, it's not just draconian measures that are causing anxiety. Allen & Overy took the reasonable-sounding step of telling staff they could not claim free evening meals while working from home. It was too much for one lawyer in Singapore who, forced to confront their oven for the first time, described the move as a "sucker punch".

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Comments

Anon 17 April 20 09:28

I hope that Goodman Derrick and Reed Smith are also cutting working hours in line with cuts to pay.

It would be a real kick in the teeth to still be working 40+ hours for 80% of pay when other people are working 0 hours for 80% of pay!

Nom Nom 17 April 20 09:55

To be fair to the guy in Singapore, the take away food is so cheap and delicious there it's probably more expensive to turn on the oven!

Anon 17 April 20 10:32

People need a reality check - surely it is better that as many people as possible keep their jobs at 80% of pay than a slew of lay offs.  At least at Reed Smith it looks like the partners have taken a similar (if not bigger) cut and quite right too.  Jobs for all at a still relatively high salary is better than fewer jobs whilst maintaining salary levels.

Anon 17 April 20 11:20

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 17 April 20 13:00

Shout out to Fladgate - reducing associate salaries by 20% but not reducing working week from 5 days to 4. Oh and billable targets remain the same. Nice. #fladgatefamily 

Anon 17 April 20 13:24

I don’t understand why a firm would make redundant a person rather than placing them on furlough under which at least they get up to  £2,500 a month, which is better than the dole.  Unless of course firms are using this as an opportunity to simple move on people they don’t like.   It’s a gratuitously unnecessary move to make someone redundant when it costs you nothing to put them on furlough.   

Anon 17 April 20 14:24

Some firms want to keep up appearances and don’t want to show the rest of the market or their competitors that their employees are being put on furlough because they don’t have enough work to go around. Sadly, some firms view furlough as a weakness or completely at odds with the times they’ve bombarded the market with how “well” the firm is doing. You won’t find many of the large BigLaw US firms doing furlough I can tell you that.

Anonymous 17 April 20 14:41

@13:24 - you still need to pay their salary under furlough (even if you eventually get it back).  Disregarding morality, redundancy may have a better cash flow impact in some scenarios. 

Anonymous 17 April 20 15:36

I've not seen Charles Russell Speechlys mentioned on these pages but just wanted to say they are doing a good job.

Some support staff who are not able to work from home (mainly Facilities peeps) have been furloughed with 100% salary.

The rest of us are working from home with relative ease. The IT department have put in a lot of hard work which is paying off well. All systems are working as well as, if not that better than can be expected given the circumstances, especially with some of the horror stories I am hearing from friends and family at other firms and in other industries.

We are getting regular cuddly emails from the managing partner, senior partner and HR. I would even go so far as to say that communication channels and information dissemination is better now than before all this craziness started!

Anon 17 April 20 15:44

Sure but making people redundant looks worse as it’s final.  With furloughing the government takes the risk and the employee feels the pain.  

Anon 17 April 20 16:22

At Gowling, no top up for PA's who are the main cull of the furlough rotating 3.5 weeks on and 3.5 weeks off.  15 days holiday also needs to be taken by end of August so everyone left with 7 days for the rest of the year. 

Anon 17 April 20 17:30

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?

Anonymous 17 April 20 19:32

Anyone noticed that Morgan Lewis is run by a woman?

Female leadership makes a difference, it seems. Not just when countries are concerned. 

Anon 17 April 20 21:56

@ Anonymous 17 April 20 14:41

The whole point is that you get your money back, and once the scheme is up and running there will be no cashflow impact on firms. 

Pets win prizes 18 April 20 11:00

I've reduced my cat's food allowance in line with industry standards to help us through the downturn.

She appears to have objected and made a dirty protest on my duvet.

Negotiations are ongoing.

Anonymous 21 April 20 16:15

At one insurer firm corporate associates are helping out the personal injury teams on discrete jobs just to survive  and put down some chargeable time.  

US Firms 21 April 20 21:10

It's probably going to be a U shape recovery. And clients - big banks, funds etc - think so from the surveys I've seen.

US firms SHOULD be hoarding staff and NQs because the winter is going to be horrendously busy. Yes, M&A is dead now, yes, investors pulling out, but in September when we're all back, clients are going to want everything done last week. 

Even if the winter isn't as busy as it should be, the workflow will pick up at least in the NY. And then there will be lots of firefighting again. Then we start looking for NQs for March, and March trainee intakes are smaller, so we lateral them and put out the recruitment fee. And then by the time HR gets them in, all the main work is done and they're on a jolly training up for months adding f all value when we could have gotten September NQs and had the existing juniors for cheap and properly trained up on time.

All of which just hurts the bottom line even more.

Anon 22 April 20 08:36

@ US Firms - what source of information do you have that is denied to the rest of us that allows you to proclaim that despite a very deep recession, corporate activity is going to increase within a few months???

Anon 22 April 20 10:33

@ Anon 08.36 - definitely not the FT opinion piece this morning about M&A activity being “dead” and mega deals not picking up for any foreseeable future based on data from Refinitiv that M&A activity did not return to the same levels of 2007 until 2015 in the last crisis.

AA 22 April 20 10:55

To me it sounds like US Firms is a panicked HR person at a US firm...and I’m not surprised.

@ anon 8.36 22 April 20 12:22

I said we think it's going to be a U shape, not a V or an L shape recovery; there's plenty of evidence to suggest that e.g. no underlying liquidity issues. There is no need to be chippy, it's pretty inane to imply that corp activity will not increase when lockdown ends.

@anon 10:33 22 April 20 15:37

Well comparing 2008 to now shows how much you understand about what's going on...besides I was talking specifically about US firms picking up. Whilst the general market might be a U shape recovery, there is a record amount of dry powder and US firms corner PE for M&A and formations work.

Anon 22 April 20 21:32

Wasn’t my comparison but the FT’s and if you read it you’d know why comparing the data makes sense...give it a try

Anonymous 22 April 20 23:19

US firms will be picking up alright, picking up the pieces of broken glass from their shattered practices (and oh yeah, and trying to cram more people into restructuring + laying off those that aren’t able to move into it).

US firms upping 22 April 20 23:23

News online is that Cravath and Milbank have upped to $200k from 190k in the US, and others are following. They should have listened to the RoF comments clearly.

Sleazy 23 April 20 09:42

Haven’t read that but if you know anything about US firms you’d know they are a PR machine. Upping by 10K when you’ve gotten rid of several associates all on 190K doesn’t sound extraordinary to me, on the contrary, it is yet another sleazy tactic to give the market a false impression as to how “well” they’re doing. 

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