Legal Law

Am Legislation 100 Agency Rolls Again Its COVID-19 Wage Cuts

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August is almost over, and thanks to the coronavirus crisis, Biglaw firms have had their fair share of summertime sadness over the austerity measures put in place to combat the economic downturn caused by COVID-19. After enduring salary cuts, furloughs, and layoffs, associates and staff at many Biglaw firms have been waiting for the day when their lives would return to normal. Months have passed, and some firms are now walking back their cuts.

About four months ago, Sheppard Mullin — a firm that placed 54th on the latest Am Law 100 ranking — conducted two rounds of austerity measures, first furloughing staff and later putting all of its employees’ salaries on the chopping block. If you recall, those cuts were 12 percent for associates, special counsel, and staff attorneys, while staff members making more than $90,000 had cuts of 10 percent and staff members making between $70,000 and $90,000 saw their salaries cut by 5 percent. The firm said the partner cuts would be at a “meaningfully greater percentage.”

Now, employees at Sheppard Mullin are finally receiving some good news on the salary front. Here’s an excerpt from a memo that was sent out earlier this week (available in full on the next page):

Because of our strong performance the Executive Committee is reducing by half the COVID-related compensation adjustments for Associates, Special Counsel, Staff Attorneys, and Staff that began in May.  The 5% and 10% reductions absorbed by some of our staff will become 2½% and 5%, and the 12% reductions incurred by our Associates and most of our Staff Attorneys and Special Counsel will be reduced to 6%.  The changes will all be effective the payroll period starting August 31, 2020, paid on September 18, 2020.

The new percentage reductions are scheduled to stay in effect through the end of 2020.  The Executive Committee will continue to monitor our performance each month, and depending on results and our view of the pandemic’s impact on the future, sooner adjustments may be possible. As stated at the time of the reductions, our Partners have pledged to take the greatest burden on compensation during this COVID-affected business cycle.

We’re sure those impacted by the salary news at the firm must be thrilled –and wondering when their salaries will be fully restored. (On the flip side, all of the firm’s secretaries, except in Chicago and Washington, DC, will remain on its workshare program until the end of the year, and only two of the 51 employees who were furloughed have returned to work.)

Let’s hope more firms are able to roll back COVID-19 austerity measures.

(Flip to the next page to read the memo in full).

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).

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.

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