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Reed Smith to Stay Remote Through End of the Year (1)

Aug. 31, 2020, 3:23 PM; Updated: Aug. 31, 2020, 4:46 PM

Reed Smith said on Monday that it would keep its U.S. personnel working remotely until at least early next year due to Covid-19, as many Big Law firms grapple with the question of when to reopen their physical offices.

Reed Smith, like most major U.S. firms, shifted its lawyers and staff to remote work in March as the coronavirus pandemic forced the shuttering of offices and businesses across the nation.

A Reed Smith spokesperson said that the firm is extending its remote-work period for its U.S. lawyers and staff until at least January 2021. More than 90% of the firm’s lawyers and staff work remotely each week.

“We are serving our clients well without skipping a beat and will continue to do that remotely into 2021 in light of the extraordinary circumstances of the pandemic,” the firm’s spokesperson said.

In some of Reed Smith’s U.S. locations , lawyers can request to work from an office, but under strict guidelines, the spokesperson said. In Europe, Middle East and Africa, some of its offices have partially returned to work.

Reed Smith announced earlier this month that it would walk back some of the pay cuts it implemented earlier this year as firm grappled with the economic impact of Covid-19.

The 20% cuts in compensation for fixed-share partners and counsel will be reduced to 15% on Sept. 1. For staff making more than $100,000, their 10% cuts will be reduced to 5%, while associates’ 15% cuts will remain at that level.

The firm has also said it would wait until January 2021 to welcome first-year associates who would normally join Reed Smith in the fall, but provide health insurance, a stipend, and coverage of certain costs in the meantime.

Staying Remote

Reed Smith appears to be one of the few Big Law firms to publicly announce its intention to keep its doors in the U.S. closed through 2020. But the decision
is very much in line with what other firms are planning in light of health and safety risks stemming from Covid-19, said Kent Zimmermann, a consultant with the Zeughauser Group.

“I’ve heard from many chairs that either they’ve decided or are close to deciding to tell their people that they don’t need to be back in the office until next year, January at the earliest,” he said, noting that firms will then reassess their office situations in the New Year.

“I think that it’s a major relief to people who aren’t comfortable coming back in or prefer to be where they are,” Zimmermann said.

There is a smaller group of people who would like to get back to the office and some firms are allowing them to come in but keeping numbers low to mitigate the risk, he said.

Real estate is the second largest cost for most law firms after attorney and staff compensation. Prior to the pandemic, many firms were looking to reduce real estate costs, said Zimmermann, so the pandemic could be “a bridge to the future.”

According to a recent Bloomberg Law survey, 86% of law firm respondents expect working from home to continue to be an option after the pandemic, and 88% want it to be an option. In another survey from Cushman Wakefield, 90% of respondents said that they expect more than 10% of attorneys will work from home regularly in the future.

Zimmermann said while there are downsides to being out of the office, such as lack of training for younger attorneys, and more challenges with recruitment,remote-working has provided upsides for some. Those who may benefit, he said, include women who may have previously been sidelined from engaging in traditional business development.

Everyone is on Zoom now and they can do Zoom drinks at 5pm, rather than late business dinners or golf outings, he said.

(Added comments from Zimmermann throughout. )

To contact the reporter on this story: Meghan Tribe in New York at mtribe@bloomberglaw.com

To contact the editors responsible for this story: Rebekah Mintzer at rmintzer@bloomberglaw.com; Tom P. Taylor at ttaylor@bloomberglaw.com

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