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Law360 (April 14, 2020, 10:28 PM EDT ) Kelley Drye & Warren LLP on Tuesday warned its attorneys that pay cuts are on deck amid the coronavirus pandemic, unveiling a salary reduction for all employees making more than $100,000 annually as well as cuts to equity partner compensation.
As a result of the novel coronavirus, lawyers and other staffers making more than $100,000 annually will see a 10% pay cut starting May 15, James Carr, the chair of Kelley Drye's executive committee, said in a firmwide memo, a copy of which was obtained by Law360. Those who make less than $100,000 won't see any pay cuts.
Additionally, equity partners' draws will be reduced by as much as 20% beginning at the end of April, and raises for administrative staff that were planned for July 1 will be postponed, Carr said in the memo.
The firm is facing "unprecedented challenges" from the pandemic, the economic impact of which is just beginning, Carr said, noting that the firm's clients are focusing on business needs and invoice payment has slowed.
Kelley Drye had already shortened its summer associate program, delayed the start dates of its first-year associate class, postponed nonessential hires and suspended services from "non-essential consultants," according to the memo.
"These actions will provide added financial stability while we continue to serve our clients' needs during this period of disruption," Carr said.
He said promotions of new partners and special counsel will "occur in the normal course" and will not be affected. Travel expenses as well as costs associated with firm events, seminars, recruiting expenses, overtime and client development activities have already gone down because of stay-at-home orders, he said.
"We hope to be in the position to revisit and possibly restore salaries to pre-COVID levels at some point in the future, once the crisis abates and our practice returns to its normal rhythm," Carr said.
Kelley Drye joins a growing list of firms that have implemented furloughs, layoffs, pay cuts and other cost-saving measures to reduce the financial impact of the COVID-19 pandemic.
On Monday, Baker McKenzie said it will temporarily reduce salaries for attorneys and business professionals in the U.S. by 15% and for those in Canada by 10%. Also that day, Sheppard Mullin Richter & Hampton LLP furloughed 33 staff members.
Kilpatrick Townsend & Stockton LLP has reduced pay for attorneys and staff, saying the firm was taking a proactive approach. And Goodwin Procter LLP said Friday that it was trimming its global operations team by laying off "a limited number" of nonattorney staff.
--Additional reporting by Xiumei Dong and Emma Cueto. Editing by Alanna Weissman.
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