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Law360 (April 30, 2020, 9:05 PM EDT ) Saul Ewing Arnstein & Lehr LLP and Katten Muchin Rosenman LLP became the latest law firms to confirm staff furloughs and pay cuts Thursday as the economic effects of the COVID-19 pandemic continue to reverberate throughout the legal industry.
Saul Ewing said it will cut salaries for those who make more than $50,000 annually, institute furloughs and lay off an unspecified number of employees. The firm opted to move forward with the "austerity measures" after reductions in partner draws and discretionary spending and the postponement of large capital projects were insufficient to ensure that the firm would be in the best possible position once the effects of the pandemic began to wane, managing partner Barry F. Levin said in a statement Thursday.
"We opted to make these difficult changes now, with the goal of avoiding the need for further measures down the road," Levin said. "More optimistically, we will also be prepared to roll back the added precautions when warranted. We believe this shared sacrifice across all constituencies is the most fair solution at this challenging time."
A spokesperson for Saul Ewing on Thursday was unable to confirm the length of the furloughs, the extent of the salary reductions, the number of employees who will be laid off, and which types of employees will be laid off.
Katten will cut draws for equity partners in April and May, reduce salaries by up to 20% for attorneys and business professionals who make more than $100,000 and institute furloughs for some business professionals and attorneys, the firm confirmed on Thursday.
Katten will set a floor of $100,000 for the salary cuts, meaning that while those who earn larger salaries will see the full 20% cut in their paychecks, those who earn $110,000, for example, would see their salary drop by $10,000, according to the firm. The salaries of employees who earn less than $100,000 will not be affected, according to Katten. The firm intends to reevaluate the cuts each month to determine whether they should continue.
Firm officials could not confirm the anticipated length of the furloughs, which will primarily affect business professionals who cannot work remotely or whose work has slowed significantly. Katten has set up a fund to supplement the incomes of those who are on furlough.
"The proactive measures Katten has put in place are meant to safeguard the firm and our people so we are well-positioned to continue serving our clients over the long term," the firm said in a statement on Thursday. "Our actions are designed to share the burden of our cash-saving measures across the firm and lessen the impact felt by everyone."
Earlier this week, Littler Mendelson PC and Davis Wright Tremaine LLP also announced similar cuts to weather the financial fallout of the COVID-19 pandemic.
--Additional reporting by Emma Cueto. Editing by Alanna Weissman.
Correction: A previous version of this article included incorrect information on the duration of Katten's furloughs. The error has been corrected.
For a reprint of this article, please contact reprints@law360.com.
