Biglaw

Am Law 100 Firm's Furloughs Have Turned Into Layoffs

Sorry, Biglaw, but the layoffs are coming.

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The U.S. government may have claimed victory over the coronavirus, but the public health crisis is far from over. Biglaw firms that announced austerity measures are now rethinking them, and one firm has decide to pull the plug on legal professionals whose careers were on life support.

Two months ago, Katten Muchin — a firm that was recently ranked #63 on the Am Law 100 with a 5.5 percent increase in revenue to $669,709,000 and a 10 percent increase in profits per partner to more than $1.8 million — put all of its employees’ salaries on the chopping block while furloughing others, including business administration professionals and staff attorneys. According to a Katten spokesperson, some of those furloughs will now become permanent, but none of the layoffs, slated to begin August 1, will affect attorneys at any level across the firm.

Why does the firm see the need for layoffs now? Because of the success of its remote work environment. Here’s a statement from Katten:

Given this [the success of remote working on workflow] and the realization that our administrative needs are fully supported through new approaches we’ve taken that better fit the remote work model, we have determined that it is in the best interest of the firm to permanently separate from some of our currently furloughed employees as of the end of July. We deeply appreciate the dedication and contributions of these members of the Katten community. This was not an easy decision, but it was necessary in light of the ongoing crisis and our current and anticipated staffing needs.

The firm will be offering those impacted by the layoffs one week of pay for each year they’ve been at the firm, with a minimum payout of eight weeks, and those payments will be structured to “maximize earning potential” on top of the unemployment insurance they’re already receiving. Those who are about to be laid off will also have health insurance coverage made available to them through the end of the year, at no additional cost. Last, but not least, the firm will offer their soon-to-be-former staff members employment search assistance at no cost.

As for other employees at the firm, there’s no end in sight for the salary cuts that were announced on April 29. If you recall, those cuts were up to 20 percent for both business professionals and attorneys who make over $100,000. Equity partners who suspended their monthly draws in April and May received a payout in June, but at a 25 percent reduction from previous levels.

Will this be the last round of austerity measures we’ll see from Katten? A firm spokesperson said commenting on that would be “premature.”

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Best of luck to all those who are affected by the layoffs at Katten Muchin.

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).

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Earlier: Am Law 100 Firm Slashes Salaries, Furloughs Staff Lawyers And Staff

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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.

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