The legal profession has been put through the wringer in 2020 thanks to the pandemic. Now that the fall is almost upon us, dozens of firms that cut salaries to combat the economic turmoil that COVID-19 brought with it have now either partially or fully rolled back those reductions. At other firms, the news is a little less celebratory: attorneys are being laid off.
This may come as a shock to some, but Baker McKenzie is conducting layoffs. The Biglaw behemoth has over 6,000 attorneys worldwide and was recently ranked by Am Law as the fourth highest-grossing firm in the country with $2.92 billion in revenue in 2019. If you recall, back in April, coronavirus cuts came to the firm, with salaries slashed by 15 percent for all U.S. attorneys and business professionals making over $100,000, while those in Canada sustained a 10 percent reduction to their salaries.
Yesterday afternoon, sources let us know that cuts were underway at the firm, and that midlevel and senior associates were the subject of layoffs across several offices. We reached out to Baker McKenzie for confirmation, and received this statement:
As a global firm, Baker McKenzie has felt the impact of increased market and business disruption around the world. Over the past seven months, we’ve been quick to maneuver and adapt by staying close to our clients as we realign to meet their changing needs.
As such, we can confirm that we are reducing the size of our workforce in the U.S., Canada, and Mexico. This reduction includes lawyers, other timekeepers and business professionals.
To say this was a hard decision is a massive understatement. We are deeply aware of the human impact of these decisions, and are treating our people fairly and with dignity. But having considered the full array of options, we are confident that this is the best path forward.
It is unknown at this time how many people lost their jobs at Baker McKenzie, what their severance packages look like, or what other kinds of assistance the firm will offer to those who now find themselves without employment.
On the bright side, the firm’s salary cuts will be a thing of the past in 2021. “Looking to the future,” a firm spokesperson said, “we can also confirm that the current salary reductions announced earlier this year in the U.S. and Canada will end on December 31, 2020.” Coupled with the layoffs announced in the very same statement, these salary cut rollbacks now seem like they’re some sort of a consolation prize.
If something like this is happening at an elite firm like Baker McKenzie, it must be worrisome for other firms that weren’t as financially well off in the first place. Best of luck to all those who are affected by the layoffs at Baker McKenzie.
If your firm or organization is slashing salaries, closing its doors, or reducing the ranks of its lawyers or staff, whether through open layoffs, stealth layoffs, or voluntary buyouts, please don’t hesitate to let us know. Our vast network of tipsters is part of what makes Above the Law thrive. You can email us or text us (646-820-8477).
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Staci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.