Biglaw

Billion-Dollar Biglaw Firm Kills Its COVID Salary Cuts

Plus, bonuses are still on the horizon for 'extraordinary' performance.

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Just because some Biglaw firms are handing out COVID-19 bonus money hand over fist, we mustn’t forget there are still some firms that are dealing with COVID-19 austerity measures, from slashed salary to furloughs to layoffs. Today, those cuts end at one of America’s most profitable firms.

The latest firm to completely roll back its salary reductions is K&L Gates, another member of the billion-dollar club that placed 39th in the Am Law 100, with $1,026,626,000 in 2019 gross revenue.

Back in April, the firm reduced salaries across the board, with equity partners seeing a 20 percent reduction in scheduled advances, and firm leaders taking even larger reductions. Income partners, associates, and allied professionals and staff were subject to a 15 percent reduction in their salary provided their income didn’t fall below a $75,000 floor. In late August, the firm walked back those reductions, with equity partners due to see a 15 percent cut to their advances at the end of September, while all other employees would sustain a 10 percent pay cut starting at the beginning of September (with the income floor shifting to $100,000 for no pay cuts).

Now, thanks to further review of its austerity measures, K&L Gates will be doing away with its salary cuts entirely. Here’s a relevant excerpt from a memo (available in full on the next page) sent by Jim Segerdahl, the firm’s global managing partner:

We are pleased to confirm on behalf of the Management Committee that it is now time to discontinue the Covid-19 salary reduction initiative entirely on a going forward basis, and that we are doing so for all affected allied professionals, associates and income partners effective October 16th (there may be some timing variations in certain markets).  Thus, salaries that were reduced as a result of the special Covid-19 initiative will return to pre-reduction levels on a going forward basis at that point in time.  The special Covid-19 related reductions in the provisional advances made to equity partners will cease on a going forward basis with the advances scheduled for the end of October.

In this memo, Segerdahl once again reminded everyone that K&L Gates is holding open the door for bonuses for those who have made “extraordinary contributions” during the pandemic. (Alas, the firm made no mention of fall appreciation bonuses.)

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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