Biglaw

Biglaw Firm With Over A Billion In Revenue Cuts Associate Salaries (And More!)

Associates seem pretty bummed about the austerity measures.

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Another top law firm has instituted cost-cutting measures amid the COVID-19 pandemic. In 2019 Holland & Knight had gross revenue of $1,026,809,000, making it number 38 on the Am Law 100, but big revenue numbers in the past aren’t always enough to insulate Biglaw firms from the lurking economic uncertainty caused by coronavirus.

In a firmwide email (available in full on the next page), Managing Partner Steven Sonberg announced staff furloughs and salary cuts for partners, associates, and staff. Cuts to partner draws average 25 percent at the firm, and are done on a progressive scale. Associates, counsel, and senior professionals will see compensation cut by 17.5 percent. Staff making $75,000-$150,000 will have a 10 percent pay cut and staff making $150,000+ get a 15 percent reduction.

One tipster at the firm said of the cuts, “This is particularly discouraging as Holland & Knight is known for paying below market compensation even though they are billion dollar revenue firm.” Another said simply, “aw shucks.”

A spokesperson for the firm provided the following statement on the austerity measures:

Holland & Knight announced today adjustments to the firm’s U.S. operations in response to the COVID-19 crisis. The plan includes temporary reductions in both partner draws and compensation for associates, counsel, senior professionals, and staff, as well as the furlough of some staff members.

Partner draws have been reduced on average by approximately 25% under a progressive scale that requires more highly compensated partners to absorb a higher percentage reduction. The firm will generally reduce the compensation of associates, counsel, and senior professionals by 17.5%. In addition, staff who earn more than $75,000 but less than $150,000 will have their compensation reduced by 10%, while staff who earn more than $150,000 will see a 15% reduction. Staff earning less than $75,000 will not be impacted.

The principal consideration in selecting staff for furlough was whether the current environment precluded or limited the firm from utilizing the staff members. Those furloughed will continue to receive their benefits during the furlough. All of these measures will remain in effect for the next 60 days, during which time the firm will evaluate the advisability of continuing, eliminating, or altering them.

In 2019, Holland & Knight’s revenue and net income increased for the tenth straight year. According to Steven Sonberg, the firm’s Managing Partner, “The firm entered the current crisis in a strong financial position. Nevertheless, it is not immune from the effects of the economic downturn. In order to meet the challenges we face, we are asking all members of Holland & Knight to sacrifice in some way as the firm continues to evaluate its operations. Our proactive, but measured, approach to management has served the firm well during the past and we are confident it will do so during this crisis.”

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.

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headshotKathryn Rubino is a Senior Editor at Above the Law, and host of The Jabot podcast. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).

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