Biglaw

Billion-Dollar Biglaw Firm Will Completely Eliminate Its COVID Cuts, Restore Full Pay

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The coronavirus crisis really threw the legal profession for a loop in 2020. Now that the new year is just around the corner, there finally seems to be a light at the end of the tunnel when it comes to the austerity measures that were instituted due COVID-19’s economic upheaval. Now, one of the wealthiest firms to cut salaries is doing a complete about face when it comes to compensation.

Since March, Reed Smith — which raked in $1,246,926,000 in 2019 gross revenue, making it 26th on the Am Law 100 ranking — has announced not one, not two, not three, but FOUR rounds of salary reductions for partners, associates, and staff. First, the firm announced that partner cash distributions would be slowed as a “precaution” to “brac[e] for the short-term and potential long-term economic impacts of COVID-19. A short time later, in mid April, the firm came for associate salaries, announcing 15 percent cuts that would last from May through the end of August. About two weeks later, the firm announced that partner bonuses were being deferred and split into separate payments (and the same would happen for staff discretionary bonuses). Then, on June 1, the firm announced that its salary cuts for associates would not only last through the end of the year, but they’d increase to 20 percent. On top of that, staff earning more than $100,000 would take a 10 percent salary hit while other professionals would see reduced workweeks, reduced salaries, and furloughs.

Back in August, Reed Smith walked back its salary cuts for some — but not all — those affected, as of September 1. On October 1, the firm further reduced those cuts for attorneys and eliminated them entirely for staff earning more than $100,000. Now, the firm has decided to do something that’s sure to make all of its associates, counsel, and partners as happy as can be.

Sandy Thomas, Reed Smith’s global managing partner, has just announced that all salaries at the firm will be fully restored as of November 1. Here’s a statement:

Throughout the pandemic, the firm has been dedicated to protecting the health and safety of our people and supporting our clients around the globe. Because of the incredibly hard work, shared sacrifice and commitment of our people, we are pleased to announce that we are fully restoring compensation to the 100% level for all of our lawyers and professional staff.

This is exciting news for everyone at the firm. “As we move into 2021, we will continue to be vigilant in protecting the health and safety of our people, conducting our business prudently and providing exemplary service to our clients,” Thomas said.

If your firm or organization is slashing salaries or restoring previous cuts, 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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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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