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Law360 (March 30, 2020, 5:23 PM EDT ) Reed Smith LLP has slowed partner cash distributions as it takes a "fiscally conservative" approach to managing the potential economic impacts of the COVID-19 pandemic, a firm spokesperson said on Monday.
While some law firms in the United States have cut staff in response to the crisis, a spokesperson for Reed Smith reported that it is looking to its partners to help weather the precarious economic situation the world now faces as businesses close to slow the spread of the novel coronavirus.
The spokesperson reported that the global law firm is performing as planned through the first three months of 2020 and many of its practices are "exceptionally busy."
But "at the same time, we know businesses around the world are bracing for the short-term and potential long-term economic impacts of COVID-19, and we are taking a fiscally conservative yet responsible approach," the spokesperson said in a statement. "Our leadership ... has made the decision to slow partner cash distributions in the near term as a precaution."
Also on Monday, Marshall Dennehey Warner Coleman & Goggin CEO G. Mark Thompson sent a firmwide email to attorneys and staff announcing that the firm will be suspending its 4% employer match to employee 401(k) contributions from May 1 through the end of the year in response to the economic fallout from the pandemic.
"This is a sobering and regrettable development necessitated by sobering and regrettable circumstances beyond the firm's control. It is, however, expected to be temporary," Thompson's letter said. "This pandemic will unfortunately continue to present complex issues and problems and be of consequence to our economy, profession and firm. Moving forward, it's important we not act out of fear or desperation but that our decision making remain calm, reasoned and practical. That is what we strived for here and believe we attained."
Last week, two New York-based law firms confirmed that they have cut back on staff.
At Buffalo-based Goldberg Segalla LLP, management has "activated the firm's business continuity plan and made the difficult decision to make a limited reduction to our workforce, largely with respect to those whose responsibilities would be unessential or moot in the current work environment," managing partner Rick Cohen told Law360.
Meanwhile, Belkin Burden Goldman LLP has also reduced its support staff. The firm underscored in a statement that no attorneys have been laid off, saying it's continuing to provide the same legal service and guidance to its real estate clients as always.
In the U.S., more than 2,500 deaths have been linked to COVID-19, and there are more than 140,000 cases across 50 states, Washington, D.C., and the American territories.
Many states have issued stay-at-home orders prohibiting many businesses from operating as usual, aimed at slowing the spread of the disease. The ensuing economic turmoil has had a major impact on the U.S. economy.
On Friday, President Donald Trump signed a $2 trillion package of relief measures aimed at supporting jobless Americans, boosting business activity and providing resources for health care workers struggling to treat COVID-19.
--Additional reporting by Michele Gorman and Stephen Cooper. Editing by Nicole Bleier.
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