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Law360 (June 1, 2020, 5:15 PM EDT ) Reed Smith LLP, which already announced a series of salary reductions earlier in the year, confirmed Monday that it would be making another round of cost-cutting measures to weather the financial impact of COVID-19, including extended pay cuts, furloughs and layoffs.
Among its cost-cutting measures, Reed Smith said it would extend previously announced salary cuts to the end of the year, furlough some employees and move some to a four-day workweek. (Annie Pancak | Law360)
The salary cuts for the lawyers will also be implemented on an annualized basis, Thomas said, listing a 14% reduction for non-equity partners, 12.5% for counsel and 12% for associates.
"As a result of the prolonged economic uncertainty caused by COVID-19, we have made the difficult decision to take further actions to ensure our business emerges from the pandemic in a position of strength," Thomas said the statement.
The Pittsburgh-based firm had already made the decision in March to defer other partner distributions and in April to reduce base pay for counsel by 10% for three months.
Reed Smith previously confirmed that it was deferring decisions on merit increases and discretionary bonus payments for professional staff and reducing associates' pay by 15% for four months, starting in May.
The firm's equity partners in late April also agreed to receive half of their bonus amounts at their regularly scheduled time, with the remaining balance to be paid three months later. Meanwhile, bonuses for fixed-share partners, associates and counsel would be paid in full and on time.
"Reed Smith's owners, rightly, continue to bear the largest share of the financial burden of the firm's actions," Thomas said in Monday's statement.
In addition to reducing attorneys' paychecks, Thomas said that most of the firm's professional assistants and "select professional staff" will move to a four-day workweek, with corresponding pay cuts, and "a small number" of employees will be furloughed on a temporary basis.
Professional staff who earn more than $100,000 annually, who are not subject to other employment actions, will have their salary reduced nearly 6% on an annualized basis, Thomas added.
And in London, the firm's largest office — which listed 342 attorneys and staff on its website — will initiate a "targeted redundancy process" that will impact about 20 lawyers and 10 staff.
Meanwhile, in Asia, similar measures were already taken earlier this year, affecting a small percentage of lawyers and professional staff, Thomas said.
"Like all well-run businesses, during the normal course of managing the firm we continually evaluate the size and shape of our global organization to ensure that it matches the needs of our clients," he said. "This practice is as important as ever during the pandemic."
The firm expects the measures to be temporary, Thomas said. During this time, health care and other benefits will remain intact for all lawyers and staff, he added.
--Additional reporting by Kevin Penton. Editing by Emily Kokoll.
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