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Major law firms are taking actions to prepare for a cash crunch, including conducting layoffs, furloughs and pay cuts, sources tell Business Insider.Pryor Cashman in New York, which lists more than 180 lawyers on its website, confirmed it had furloughed some associates, though declined to specify how many. John Alessio, the managing partner of the San Diego-based Procopio, which staffs more than 180 lawyers firm-wide, confirmed to Business Insider the firm had conducted layoffs of attorneys and staff. The coronavirus crisis is also causing firms to take a look at their long-term needs when it comes to tech, real estate, and associate recruiting. Click here for more BI Prime stories.
Major law firms throughout the United States are conducting layoffs, furloughs, and pay cuts to prepare for a cash crunch as the novel coronavirus hits billings, sources tell Business Insider. And while these moved are aimed at shoring up firms in the short term, insiders that we talked to said the coronavirus crisis could also have a longer-term effect on what the workplace of the legal industry looks like in the future. When it comes to pay and job cuts, firms this week sprung into action. “The real goal is to build a financial war chest to carry them though what is hopefully a short period of time,” said Brad Hildebrandt, a consultant to law firms. “Each firm is approaching that in a different manner.”
The international law firm of Reed Smith is slowing the distribution of pay to partners, it said in a statement, while New York-based Cadwalader Wickersham & Taft told partners not to expect any pay distributions during the peak months of the crisis and is temporarily reducing pay for employees — by 25% for those who earn more than $100,000, and 10% for those who earn less.”Despite how busy some of us are with urgent client needs at this moment, even the most benign reasonable projections make clear that Firm revenues and billable hours are likely to be reduced during this crisis,” said Pat Quinn, Cadwalader’s managing partner, in an email to employees on Tuesday. “The longer we wait to take action in response to the virus, the more difficult it will be for us to avoid much more drastic measures later on,” he said, noting that the firm is putting a “high priority” on protecting the jobs of legal and non-legal staff. That comment strikes at the tension facing many law firms in the coronavirus downturn, according to more than two dozen attorneys, consultants and recruiters Business Insider has spoken with about how firms are responding to the crisis, as corporate clients experience a dropoff in revenue.The management decisions law firms make during the crisis are important because they affect how law students and other practicing attorneys perceive the firm as a place to work, legal experts said.
During the financial crisis in 2009, for instance, Latham & Watkins laid off 190 associates and 250 staff members in an event that has been seared into the memories of lawyers. Other firms, such as Wachtell Lipton, did not conduct these kinds of layoffs.Some firms conduct layoffs, furloughsThis time around, some haven’t been able to avoid it, though they have mostly been mid-sized firms so far. Out in California, John Alessio, the managing partner of the San Diego-based law firm Procopio, which staffs more than 180 lawyers firm-wide, confirmed to Business Insider that it had conducted layo
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