In the new era of COVID-invoked recession law firms are developing new strategies to cope with a downturn in work and revenues. Beyond furloughs, pay cuts and layoffs (disclosed or undisclosed), the firms are preparing for their own lockdowns in terms of staffing at both incoming and outgoing lawyer levels.
Ropes & Gray have announced a voluntary associate deferral program. The Boston-based firm that listed at no. 13 on the Am Law 100 rankings and with revenues of almost $2 billion last year, is the first of the Big Law firms to provide the deferral program but suggests there will many others to follow suit.
Ropes & Gray has kicked off a voluntary one-year deferral program for its incoming first-years, who are due to start in January, and its current associates. The program means that incoming associates can either take a fellowship year or a sabbatical year and join the class of 2021. The firm emphasizes that the programs are entirely voluntary.
Decision time is October 1, which puts the pressure on associates.
Those who choose the sabbatical can do anything except work for another law firm and will receive a stipend of 20 per cent of their base pay at the firm or $38,000. Those who take the deferral can also receive health insurance and there are also firm loan facilities available.
For those who choose a fellowship year they need to find another job at a public interest organization or at an approved government entity, and will receive a stipend of $80,000 (pre-tax).
A memo from the firm’s hiring partner, Peter Erichsen and quoted in AbovetheLaw said –
This year has truly been one like no other, and we certainly would understand if its developments has prompted a temporary rethinking of your professional priorities. Perhaps you are looking for ways to contribute your knowledge, talent and time to public service work in a variety of areas—fighting racial injustice, addressing housing crises and other needs arising out of the COVID pandemic, or supporting political causes important to you, to name just a few. Alternatively, some of you may have been personally affected by the pandemic in ways you did not anticipate, and could benefit from taking some time off before launching your career.
Rollbacks at Dentons
Dentons also announced rollbacks to staffing levels in a lengthy memo to staff last week. The self-proclaimed largest firm in the world said that staff and business professionals who will be 62 years old by the end of the year and have worked at the firm for 15 or more years will be offered voluntary retirement package by the firm.
Dentons had already announced sweeping cost cutting measures earlier in the year, such as at its Paris office, but continues to retrench and cut its wage bill with the measures although the firm had partially removed some of the belt-tightening measures it had taken earlier in the year in light of its performance during the first eight months of the year.
A Dentons spokeswoman was not able to confirm whether Dentons is offering specific incentives to encourage the employees to participate in the program, according to Law360.
“Strong fee collections coupled with the expense discipline and the benefits of the resiliency program has resulted in positive financial performance and the solid position for our business that we have collectively worked to secure,” Dentons’ CEO Mike McNamara wrote.
Dentons announced in April that it would reduce pay for all U.S. lawyers and staff earning more than $60,000. Partners would see reductions in draws of 20 per cent, with the most highly compensated partners experiencing higher cuts, the firm said at the time.
All other attorneys and staff would see cuts of up to 20 per cent, with those earning $60,000 or less not seeing a reduction, according to Dentons at the time.
Big Law Bites
The retrenchment of Big Law firms is set to continue as the pandemic itself continues to affect economies globally. The moves made by the major law firms to date are only going to continue observers believe as they await announcements from other major firms’ and their response to a tougher market and slowing economies.
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Este ano foi realmente um ano como nenhum outro, e certo que entenderíamos se seus desenvolvimentos levassem a um repensar temporário de suas prioridades profissionais.