Biglaw

Am Law 100 Firm's Furloughs Have Turned Into Layoffs

But at least the firm is rolling back its salary cuts.

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Biglaw firms are reversing their austerity measures in droves, and salary cut reductions now definitely trending among Biglaw firms. (We’ve been tracking the actions of those firms here.) Unfortunately, another thing that’s now trending is the good news/bad news announcement in relation to salary cut reversals. This one follows in the wake of Baker McKenzie’s surprise news on salaries and layoffs.

Back in April, Davis Wright Tremaine — a firm that came in 92nd place in the most recent Am Law 100 rankings, with $414,144,000 in gross revenue in 2019 — announced across-the-board salary cuts and employee furloughs. These cost-cutting measures ranged from from reduced partner distributions and salary cuts for associates and staff to furloughs and reduced schedules for staff. Now, thanks to a better than expected financial performance, many of those cuts are being dialed back.

Jeff Gray, Davis Wright’s managing partner, released the details in statement:

Despite the challenges of the past six months, our financial performance to date has exceeded expectations. Due to our focus on serving clients, developing new work, and managing billing and collections, we expect to finish the year better than we had previously modeled. As a result, effective today, we will be bringing back a number of our furloughed staff members and restoring 50% of the salary reductions we made in May. In addition, for equity partners, we will increase the third quarter distribution and are optimistic we’ll be able to do the same for the fourth quarter.

But wait, before you get too excited, Gray’s statement has a much more depressing second paragraph. This is where he mentions that people are about to lose their jobs:

However, we also have made the difficult decision to lay off some of the staff who had been furloughed, not knowing when, if ever, their previous work will return. This is the result of a fundamental shift in how we expect to operate and support our clients and lawyers going forward and not a cost-cutting measure. Those impacted will receive separation packages beyond what we normally provide, including increased severance payments, additional outplacement and coaching support, continued access to our Employee Disaster Relief Fund, and coverage of medical premiums through the end of the year for those on our plan.

If you recall, DWT’s Employee Disaster Relief Fund provides monetary relief to staff members who have suffered financial hardship as a result of the pandemic. These staff members will definitely be suffering after having been laid off, so at least the firm is offering them this last act of kindness as they’re forced out the door.

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Best of luck to all those who are affected by the layoffs at Davis Wright Tremaine.

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.

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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