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Law360 (October 23, 2020, 10:17 PM EDT ) Hogan Lovells said Friday that it laid off about 4% of its business services staff based in the U.S. and Mexico, making it the latest BigLaw firm to cut its head count after rolling back some austerity measures caused by the coronavirus pandemic.
A total of 43 employees were affected by the move, which was coupled with the launch of a voluntary redundancy program for business services and secretarial staff in the United Kingdom, the firm told Law360. Attorneys were not affected by the decision.
"We have performed well over the past few months and ahead of where we were this time last year in terms of revenues, and we have also done well in ensuring that our discretionary costs have been kept to a minimum," Hogan Lovells CEO Miguel Zaldivar said in a statement. "However, we see continuing uncertainties in the market for 2021 and need to be well-positioned to weather what could be a more challenging period."
"Even without the pandemic we would have been making some changes to the structure of our business services teams," Zaldivar added.
Hogan Lovells said it has no plans for more layoffs in the U.S. or a compulsory redundancy program in the U.K. in 2020.
A raft of law firms instituted pay cuts and other austerity measures in the spring in wake of the economic downturn caused by the coronavirus pandemic. But while several major firms, including Hogan Lovells, have in recent months rolled back some salary reductions to prepandemic levels, many have coupled those moves with layoffs at the staff level.
Friday's announcement from Hogan Lovells comes weeks after the firm in September reversed 10% salary cuts for certain associates, counsel, specialists and knowledge lawyers. Pay cuts for non-equity partners and senior counsel will be reviewed in December, the firm said at the time. Equity partners will continue to see reduced draws for the remainder of the year.
Baker McKenzie, Baker Botts LLP, Seyfarth Shaw LLP, Davis Wright Tremaine LLP and Nixon Peabody LLP are among the large law firms taking similar steps.
Baker Botts, which was one of the first firms to partially walk back salary cuts, in early October laid off about 50 staffers, citing the "fundamental workplace shift created by the pandemic." Davis Wright in September announced it would lay off some furloughed staff while also rolling back salary cuts and increasing partner draws.
The moves have engendered questions about the future of some staff roles in an environment where economic uncertainty and remote work are the norm. Legal industry experts told Law360 in September that the shift to virtual operations would cause "permanent changes" to staffing structures in some cases.
Attorneys have not been immune to layoffs, either. Baker McKenzie — the 60th largest law firm in the U.S. in 2019, per Law360's 400 report — on Sept. 1 announced it would cut an undisclosed number of lawyers and staff positions.
--Additional reporting by Xiumei Dong, Kevin Penton and Emma Cueto. Editing by Alanna Weissman.
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