Am Law 100 Firm Slashing Salaries And Furloughing Staff
Revenue shortfalls are no joke.
The COVID-19 austerity measures continue to spread through Biglaw. The uncertainty of dealing with the global pandemic has impacted nearly every facet of our society, and the legal profession has been far from immune.
Nelson Mullins, the Biglaw firm that captured the #68 spot on the 2020 Am Law 100 ranking, is the latest firm that has implemented cost-cutting measures. According to multiple tipsters, the firm is anticipating revenue shortfalls. Though they worked on reducing expenses, the firm still needed additional measures.
Ultimately, Nelson Mullins settled on a salary cut system that might result in an associate being “made whole” by the end of the year. A tipster described the salary cut scheme (the firm email on the subject is available on the next page):
Law Firm Business Development Is More Than Relationship Building
Nelson Mullins (2019’s fastest growing AmLaw 100 firm) associates will have a temporary 9% salary reduction per annum (ie ~13.5% gross reduction per remaining paycheck) starting with May 15 paycheck and going through December. Good news is that associates who meet collections goal will “earn” their reduction (aka “holdback”) back within a month of meeting their collection goal. (Nelson Mullins has long had a collections goal in addition to an hours goal. Collection and hours goals must be met by Nov. 30th.) Further, this is separate from bonuses that are given annually for meeting collections and hours goals. Thus, if I meet all my goals, I could get two large paychecks in December.
But, you know, associates have virtually no able to influence collections, so associates can’t really do much more than bill and cross their fingers that clients pay:
On the other hand, in this climate, fewer associates will be able to meet their collection goals even if they bill like crazy–clients are just going to take longer to pay. And associates have little to no agency re collections.
Plus staff has been told they will be furloughed for a week of their choosing between June 1 and September 30. (Firmwide email on staff furloughs available on the next page.)
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We reached out to the firm for comment, but have yet to hear back.
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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Kathryn 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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