COVID-19 did more than just rock our healthcare system. It also caused great financial upheaval, and the legal industry — even those at elite Biglaw firms — was far from immune from the impacts. For months, Above the Law reported on the layoffs, furloughs, and associate salary cuts that were rocking the profession. But now it’s clear that, at least for some firms, the worst seems to be behind them.
Lowenstein Sandler had cut back on partner distributions, but there’ve been signs the firm’s financial condition is pretty solid. Indeed, firm chairman and managing partner Gary Wingens told Law.com that after halting partner distributions from February through April, the firm was able to pay higher than usual distributions in May and June.
“Clients and practices are far more resilient than we had feared heading into the recession, and even the practices that had a pretty severe demand shock in April are reversing and had come back pretty fast by June,” said Wingens.
The firm’s rebound has been buoyed largely by its bankruptcy and capital markets practices, but even its mergers & acquisitions practice is back to form:
“In our M&A practice, demand dropped by 35% year over year in April, but by the middle of June, demand was only off 5%,” Wingens said. “Not only did we see a lot of deals that went on hold in March and April come back, but we’re now seeing clients willing to do new M&A deals, even if they’re not physically getting together.”
Cozen O’Connor was working to avoid layoffs and associate salary cuts during the worst of the economic uncertainty caused by COVID, but they also put partner distributions on hold and furloughed some administrative staff members. Firm executive chairman and CEO Michael Heller confirmed that, as of July 1, partners’ pay checks were back to normal. However, no word yet on what’s happened to the furloughed employees.
At Bryan Cave Leighton Paisner, salaries (for anyone making over $40,000) were cut by 15 percent back in April and the firm announced layoffs earlier this month. Though the firm is not back to pre-COVID shape, they did decide to roll back the severity of the salary cuts, going from 15 percent cuts to 7.5 percent.
“After exceeding performance expectations during the first half of this extraordinary year, we’re pleased to begin rolling back salary reductions necessitated during the worst of the pandemic conditions,” BCLP co-chairs Lisa Mayhew and Steve Baumer said in a statement at the time of the recent changes.
Things are looking up in Texas too. In May, Munck Wilson Mandela reduced compensation for partners, associates, exempt directors, and managers, while some partners voluntarily deferred the entirety of their compensation for three months and some staff were furloughed or had their hours reduced. As of July 1, the firm has confirmed that all employees were back to their standard compensation.
Let’s hope more firms are able to roll back COVID-19 austerity measures — and soon.
If your firm or organization is slashing salaries, bringing folks back to pre-COVID 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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Kathryn Rubino is a Senior Editor at Above the Law, and host of The Jabot podcast. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).