Biglaw

Orrick Rolls Out Salary Cuts Paired With 'Make Whole' Cash Rewards

No other firm has announced a program like this to 'repay' its employees.

By  
on

(Image via Getty)

The coronavirus crisis has taken a calamitous toll on the legal profession as we know it, and over time, we’ve seen more and more firms take cost-cutting measures — ranging from salary reductions to furloughs to layoffs — in an effort to proactively manage their finances ahead of the difficult months to come. Sometimes, even Biglaw firms that are known for their kindness and generosity must tighten their belts in order to brace for the tough times that are ahread.

Sources tell us that Orrick, which is currently ranked No. 32 in the Am Law 100 and No. 34 in the Vault 100, has announced a handful of initiatives meant to save cash on hand now to spare jobs and benefits in the future, should it come to that. For the remainder of 2020, the firm will be reducing salaries for all employees on a graduated scale. We’ve been told that these are the specifics for lawyers:

  • Career associates: 5 percent salary cut
  • Associates: 10 percent salary cut
  • Managing/senior associates and most of counsel: 15 percent salary cut
  • Partners, of counsel, executive staff: “deeper” cuts

On the staff side of things, we’ve heard that more junior employees will see a salary cut of just 1 percent, while more senior staff members could see up to a 15 percent salary cut. Starting on May 1, some staff members at the firm whose roles depend on more in-office activity will be asked to work on reduced schedules. On top of that, the firm’s secretaries will be asked to work four-day schedules. In all, the annual salary reduction for these staff members will range from 7 percent to 17 percent.

We reached out to Orrick for confirmation of these measures and received this statement from Mitch Zuklie, Orrick’s chairman and chief executive officer:

We are navigating a hundred year event that is putting extraordinary stress on our clients, our communities, our people, and our profession. We have not yet felt the full impact of this crisis, nor do we know how soon the global economy will recover. So, it is prudent to take actions now designed to give our firm the flexibility to protect jobs and provide our people with health benefits for themselves and their families. Our program is structured to retain our extraordinary team so we can serve our clients and innovate — now and in the future. And, as a demonstration that we are in this together as one team, our most senior team members will make the greatest sacrifices. Of course, we sincerely hope that this global health crisis ends soon and the economy rebounds, and we will continue to monitor and adjust the program as necessary.

Sponsored

As we noted earlier, this firm is known for its kindness, so of course, they’re trying to match the bad with some good. Sources say that Orrick will be offering special “make whole” awards to top contributors, no matter their role, and that this money will be separate from the firm’s annual bonuses. To our knowledge, Orrick is the only firm that is doing something like this. In addition, Orrick, which has consistently been recognized as a family-friendly firm, is offering all lawyers and staff the ability to work a reduced full-time equivalent schedule if need be to tackle the responsibilities of work and family during the pandemic. Last, but certainly not least, anyone at the firm who earned an “Unplug on Us” $15,000 vacation bonus in 2019 will be able to defer their trips to 2021 due to the current unavailability of vacation and travel options.

As for Orrick’s summer associates, in an effort to limit travel during the coronavirus crisis, the entire program will be virtual and will be shortened to five weeks in time. In exchange, all 1L summer associates will receive offers to return to the firm next year, and all 2L summer associates will receive offers to return to the firm as associates after graduation. That’s certainly something worth celebrating. To ensure the dangers associated with COVID-19 have passed and to work around delayed bar exams, the firm will postpone the start of its 2020 associate class to January 2021.

We wish all those affected by the salary cuts at Orrick the best of luck as the firm attempts to weather the coronavirus storm.

If your firm or organization is slashing salaries, closing its doors, or reducing the ranks of its lawyers or staff, whether through open layoffs, stealth layoffs, or voluntary buyouts, please don’t hesitate to let us know. Our vast network of tipsters is part of what makes Above the Law thrive. You can email us or text us (646-820-8477).

If you’d like to sign up for ATL’s Layoff Alerts, please scroll down and enter your email address in the box below this post. If you previously signed up for the layoff alerts, you don’t need to do anything. You’ll receive an email notification within minutes of each layoff, salary cut, or furlough announcement that we publish.

Sponsored

Staci ZaretskyStaci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.

Scissors Cut Money

Enter your email address to sign up for ATL's Layoff Alerts.

Topics

, , , , ,