Biglaw

Another Am Law 50 Firm Has Salaries On The Chopping Block

Another member of the billion-dollar club cuts salaries.

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From: Segerdahl, James
Sent: Thursday, April 16, 2020 2:37 PM
To: KLGATESALL &lt
Subject: Covid-19 Impacts
Importance: High

 

To:  K&L Gates Colleagues

 

I hope that this finds you and your family safe and healthy during this unusual time.  I am writing to outline some steps our Firm is taking to deal with the unprecedented economic and social disruption caused by Covid-19.  Our goal is to implement measures that allow our Firm to emerge from this crisis strong and vital.  This is of great importance to the thousands of families that rely on the Firm for their livelihood, and the tens of thousands of clients relying on the Firm to counsel them through their most difficult challenges.

 

Our Firm enters these uncertain times in a strong position — coming off a solid first quarter, without bank debt, well-capitalized, technologically equipped to work remotely, fueled by an extraordinary culture, and a remarkable platform positioned to offer clients broad-based and diversified practices that match well with client needs in these uncertain times and into the future.

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COVID-19, however, has brought with it not only personally wrenching health concerns but also a severe hit to the economy on a global scale.  Businesses, including ours, must be prepared. Many clients have seen significant impacts already. Revenue levels going forward will be impacted, at least for a time.  We will all be working very hard to maximize and expand opportunities to service clients.  Nevertheless, it is not realistic to assume we can navigate this pandemic as a Firm without any negative impacts on anyone.

 

As a result, we have endeavored to fashion an approach that takes into account the realities of the current situation, the interests of the Firm, our stakeholders (our people, our most valued resource), and our clients, as well as to position us to come out strong on the other side of this situation.  To that end, we must take some difficult short-term actions:

 

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  1. In April and subject to review each month going forward, our Equity Partners, owners of the business, will see a 20% reduction in their scheduled advances (the manner in which Equity Partners are paid during the course of the year), with our leaders taking larger reductions than this.
  2. We have also taken a variety of other expense mitigation measures, including cancelling or deferring as much discretionary spending as feasible, implementing a presumptive hiring freeze, and a number of other cost-saving initiatives.
  3. Personnel across the Firm (Income Partners, Associates and Allied Professionals/Staff) will, going forward, take a 15% reduction in their salary (as permitted by and in accordance with local laws and necessary procedures where required) to the extent they have an annualized salary at or above a pre-determined floor (US$75,000 in the US; there will be some regional variations).  Salaries near $75,000 will not be decreased below the floor.  The reduction will be effective beginning on May 1. This reduction will be revisited on a regular basis as the year progresses with the goal of mitigating or eliminating it as circumstances warrant.  All personnel will be considered for discretionary bonuses for extraordinary performances or contributions, as many are working very hard through this period.

 

There are no easy answers or solutions; we have chosen to approach the issues in this way to preserve jobs, outstanding client service, and a strong future. We will be working as hard as we possibly can, as I know you will, to stay on that track and to reverse or mitigate salary reductions as soon as is feasible.

 

I know these measures will not be easy for many to absorb in an already stressful time.  But the K&L Gates global community, with its culture of collaboration and teamwork, outstanding people, our pride in our work and in each other, and our determination to succeed, gives us every confidence that we will weather these challenges.

 

Thank you for all you are doing, and, above all, please keep yourselves and those close to you safe and healthy.

 

Jim and Mike

James R. Segerdahl

Global Managing Partner

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