Seyfarth Shaw has reduced its monthly payments to partners by 20% and it is furloughing 10% of its U.S. employees for 90 days, the firm said in a statement on Friday.
The Chicago-founded firm is reducing pay for all lawyers and the majority of staff starting May 1, using a tiered system to reduce pay the most for its highest-paid employees. The cuts will be evaluated at year end, “or sooner,” the firm said.
The firm will pay the full cost of health care for the furloughed workers, it said, most of whom are staff. A “smaller percent of attorneys” are also impacted.
Big Law firms have introduced a mix of partner pay reductions, associate salary cuts, and layoffs to preserve cash as they prepare for an expected downturn caused by the spread of Covid-19 and the ensuing idling of the global economy.
Seyfarth Chairman and Managing Partner Pete Miller said the cost-saving measures were made after assessing the pandemic’s impact on clients and “the challenges they foretell for the rest of the year.”
“Seyfarth has elected to take prudent steps to protect our firm’s long-term success,” Miller said. “While difficult, we believe these actions will see us through this unprecedented event and safeguard our firm’s future.”
The firm has also joined other Big Law firms, like Reed Smith and Orrick Herrington & Sutcliffe, in pushing back summer associate and first-year associate hiring.
Seyfarth canceled its summer associate program for this year, but it will provide an unspecified stipend to those soon-to-be third-year law students and offer them the option to join the firm as associates in fall 2021 session. First-year associates scheduled to join the firm this fall will be pushed to January.
Seyfarth said its U.S. non-equity attorneys would see pay reductions of 10%.
Salary cuts for U.S. staff will be stepped, with the first $60,000 for all employees not affected. Wages between $60,000 and $150,000 would be reduced 5%, and earnings over $150,000 would be reduced by 10%.
The firm said it intends to follow a consistent approach for lawyers in international offices.
“Our firm has already been tested by the pandemic in extraordinary ways, and I am inspired every day by the many ways that our team members are supporting our clients and each other in this challenging time,” Miller said. “That includes doing everything we can to keep the firm headed in the right direction and to protect its future.”