IP Boutique Finnegan Cuts Pay, Preps for Coronavirus Fallout

Intellectual property boutique Finnegan, Henderson, Farabow, Garrett & Dunner will reduce lawyer and staff pay starting June 1 in anticipation of a downturn caused by the Covid-19 pandemic.

The firm’s share partners will “shoulder much of the resulting financial effects” of the downturn, managing partner Anand Sharma and chairman Mark Sweet said in a statement. Personnel who earn less than $75,000 annually will not be impacted by the cuts, and the remaining cuts will be tiered so higher earners see larger reductions.

The leaders said the firm’s incoming work remains “steady” and the practice is “financially sound.”

Law firms across the country have been enacting salary reductions, changes to partner draws, and furloughs to respond to largely stalled economy. In somewhat rare language for these types of announcements, Finnegan’s leaders said the firm would be “offsetting” the pay reductions if Covid-19’s impact turned out to be minimal.

Based in Washington, Finnegan in 2018 brought in about $310 million in revenue, making it the 108th largest U.S. firm by revenue, according to the latest AmLaw 200 rankings. The nearly 300-lawyer firm’s financial metrics outperform its size. Its revenue per lawyer, often considered the best metric to judge a firm’s financial health, was the 46th highest among U.S. firms in 2018 at $1.09 million, according to AmLaw data.

Its 88 equity partners in 2018 earned on average nearly $1.3 million.

Employees earning $150,000 or more will see a 20% reduction. Those earning between $100,000 and $150,000 will see a 15% reduction, and those earning between $75,000 and less than $100,000 will see a 10% reduction, the firm said in a statement.

“We are proud of the work the Finnegan team is doing to serve our clients and appreciate their patience, compassion, teamwork, and continued resilience during this difficult time,” Sharma and Sweet said in the statement.

“Incoming work remains steady, we are financially sound, but given everything we are seeing across the economy, we feel these changes will protect the long-term success of our team members and protect those most vulnerable to the risks we now face,” they added.