75% of associates surveyed say job security and pay cuts are top worry; who got hit this week?
Image from Shutterstock.com.
As reports build of pay cuts, furloughs and layoffs at law firms, it’s understandable that associates are concerned.
Now, a new survey of 1,335 associates quantifies the extent of their worries, report Law360, Bloomberg Law and a press release.
Fifty-two percent of 1,335 associates surveyed say they are most concerned about job security during the COVID-19 pandemic, while 23% were most worried about pay cuts or furloughs. The third highest concern, reported by 10%, was mental health.
The survey was taken from April 13 to April 21. The results were released Thursday by legal recruiting firm Major, Lindsey & Africa and the blog Above the Law. Most of those surveyed worked in the United States, and a majority were from firms of more than 500 lawyers, although the survey reached associates from firms of all sizes.
Thirty-nine percent of the surveyed associates reported that their workload had decreased, while 21% reported more work. Among those with decreased workloads, real-estate associates were most affected, with about 58% reporting less work, followed by about 43% of intellectual property associates, about 42% of tax associates and about 40% of corporate associates.
On the bright side, about 77% said communication within their firm had increased because of the COVID-19 crisis. A majority also think there will be more permanent changes in the legal industry.
The associates thought the most likely changes would be to remote working policies (about 95%), law firm technology resources (82.5%) and physical office space (about 57%).
Of course, associates aren’t the only ones worried about their futures. Professional staff members have also been affected by law firm cuts, leading to concerns that law firms will rethink long-term needs for nonlawyer staff members, Law360 reports.
So who is getting hit with pay cuts, layoffs and furloughs? In the week since the ABA Journal last reported on cost-cutting measures, at least 10 more larger firms have announced temporary steps.
The firms are:
• BakerHostetler, which is cutting annual compensation for partners by 15% to 20%, and annualized pay for associates and staff members by 10%. Compensation won’t be reduced to less than $70,000 or $80,000, with the amount varying based on the market. Staff members will have the option of working a reduced amount rather than take the 10% cut. (Law.com, Law360, Above the Law)
• Eversheds Sutherland, which is cutting total compensation for U.S. lawyers and staff, on average, by 10%. The firm is also furloughing about 40 staff members. Equity partners will also see reduced compensation. People making $50,000 or less won’t see a pay cut. (Law.com, Law360, Above the Law)
• Faegre Drinker Biddle & Reath, which has cut pay by 15% for all lawyers except equity partners, who already saw a one-third deferral in distributions. Pay for professional consultants and staff making at least $50,000 will be cut by varying amounts, up to a maximum of 15%. The firm has also furloughed about 1.5% of its staff members and laid off about 1.5% of staff whose positions were redundant after the merger of Faegre Baker Daniels and Drinker Biddle & Reath. (Above the Law, Law.com)
• Finnegan, Henderson, Farabow, Garrett & Dunner, which is cutting pay by 10% for those making between $75,000 and $100,000, by 15% for those making between $100,000 and $150,000, and by 20% for those making $150,000 or more. Share partners “will shoulder much of the resulting financial effects.” (Above the Law)
• Freshfields Bruckhaus Deringer, which has suspended partner distributions, frozen lawyer pay and delayed bonus decisions. (Law.com, Law360, Above the Law)
• Holland & Knight, which has cut partner draws by an average of 25%; cut salaries for associates, counsels and senior professionals by 17.5%; and cut pay for other staff members by 10% to 15%. Staff members making less than $75,000 won’t be affected. The firm has also furloughed some workers. (Law.com, Above the Law, Law360)
• Pepper Hamilton, which has reduced partner distributions, cut salaries for other lawyers by less than 12% on an annualized basis, and cut salaries for staff members making at least $60,000 on an annualized scale ranging from 3% to 9%. The firm is still planning to merge with Troutman Sanders on July 1. (Above the Law, Law360, Law.com)
• Perkins Coie, which has delayed some partner payouts, cut pay by 15% for nonpartner lawyers, and cut pay by 10% to 15% for staff members making at least $125,000. (Law.com, Above the Law)
• Quinn Emanuel Urquhart & Sullivan, which has delayed partner distributions and adjusted partner draws. (Law.com, Law360, Above the Law)
• Ropes & Gray, which is offering buyouts to employees on its U.S. business support teams. With approval, the buyout offers one week of severance pay for each year of service, plus four weeks of pay. The minimum any employee will receive is 12 weeks of severance pay, and the maximum is 30 weeks. (Above the Law)
