Hogan Lovells and Mayer Brown are the latest Big Law firms to cut attorney pay in response to coronavirus impacts.
Hogan is cutting pay for U.S.-based attorneys by at least 10% while Mayer Brown is implementing a 15% percentage salary reduction for each of its lawyers other than its equity partners, as well as business services staffers who earn more than $200,000.
Both firms announced the pay cuts on Wednesday.
“Our approach is to share the burden to protect both the business and our people so that we are well-positioned to meet our clients’ needs when the economy bounces back,” Hogan CEO Stephen Immelt said in a statement. “We can always revisit and unwind some of these measures if the economy rebounds faster than expected.” Otherwise, he said the firm plans to revisit these measures by the end of 2020.
Mayer Brown said the measures were necessary to preserve jobs and to promote continued “seamless” client service.
Big Law has adopted a range of cost-cutting and other measures with the pandemic upending the U.S. economy and altering operations at a number of firms.
Partners Reduce Drawdowns
U.S. equity partners at Hogan will reduce their monthly draws by between 15% and 25%, according to a firm statement. At the same time, they will defer half of any profits for the first quarter of the year normally paid in August until November. All other attorneys at the firm making more than $100,000 also are facing cuts.
The news comes three weeks after Hogan took a range of cost-cutting moves—and as many other Big Law firms have engaged in reductions as they gauge the economic fallout of the pandemic, and try to avoid the harshest responses like layoffs.
Non-equity partners will see their base compensation reduced 15% as of June 1, Hogan announced, the equivalent of cuts of about 8.75% to their annual compensation. Pay for the firm’s associates, as well as most counsel and specialized attorneys, will be cut by 10% starting on that date—though the firm said it will not cut the salaries of lawyers earning less than $100,000.
Despite the necessity of cuts, the firm’s overall position is “very solid,” Immelt said. The firm continues to see an “uptick” of work in the technology and life sciences sectors, he said, and its restructuring practice is very active.
On April 16, Hogan said in a separate statement that bonuses and profit distributions that had been scheduled for May for its equity and non-equity partners would instead be spread out over the coming months. At the same time, salary reviews and discretionary bonus payments for lawyers in the firm’s United Kingdom and Asia Pacific region offices, which had been due at the start at the beginning of May, will be postponed until later in the year.
In March, Mayer Brown declared that the firm’s equity partners had agreed to a 20 percent reduction in monthly draws, as well as a suspension of their distributions for the first half of 2020.