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Wake Up Call: Law Firms Mull Pay Cuts, Layoffs in Covid-19 ‘Right Sizing’

March 25, 2020, 12:06 PM

In today’s column, as talk swirls of new safety equipment, tests, and treatment for coronavirus Covid-19, Winston & Strawn hired a three partner health care team in Washington to advise companies in the sector. The pandemic has hit M&A firms in the wallet, but divorce attorneys seem to be getting more business; the top lawyer at Discover Financial Services last year earned more than the company’s CEO; and Jones Day topped a U.S. brand index for the fourth-straight year.

  • Leading off, with M&A and other billing in free fall, some Big Law firms are considering pay cuts for partners, lay-offs of associates and staff, and other measures that could become necessary in a “right sizing for the new world” wrought by the pandemic of novel coronavirus Covid-19, according to a report. (BusinessInsider.com)

  • With most civil litigation in New York on hold, three medium-size New York firms have already laid off staff and/or cut salaries, reports say. (New York Law Journal) (Above The Law)

  • In the U.K., stock-market-listed law firm Gateley dropped a planned interim dividend payout in order to “maximize liquidity” as the Covid-19 pandemic saps its activity. (Global Legal Post)

  • Meanwhile, some litigation finance firms are telling investors that virus-related court delays could boost returns. However, others in the industry see new potential for disputes. (BLAW)

  • SixFifty, the technology and automation branch of Silicon Valley firm Wilson Sonsini, is offering free digital tools to help companies draft Covid-19 related employment policies. (BLAW)

  • One group getting a lot of clients’ questions during the pandemic are lawyers that represent the health care industry. In that context, Winston & Strawn hired three health care partners in Washington, including two laterals from McDermott Will & Emery and former Bristol-Myers Squibb compliance counsel Winston S. Kirton. The team includes former U.S. Department of Justice civil trial attorney T. Reed Stephens, who was partner-in-charge of McDermott’s 30-attorney health industry advisory practice group in Washington. Litigator Aman Sidhu, who represents health systems, specialized and innovative physician practice groups, and pharmaceutical manufacturers, also joins from McDermott. (BLAW) Arnold & Porter made a big hire in the sector earlier this week. (BLAW)

  • Divorce lawyers, it turns out, are also seeing an upside to the crisis, as couples forced into confinement decide they’ve had enough of each other. (CNBC.com)

  • California Chief Justice Tani Cantil-Sakauye suspended all jury trials across the state for 60 days. (The Recorder) California and Texas were among several states that postponed attorney discipline case hearings because of the pandemic. (ABAJournal.com)

  • Among law firms offering Covid-19 resources: Thomson Coburn has a post on challenges for cannabis-related businesses. (ThomsonCoburn.com) DLA Piper has a post on stock repurchase considerations and guidance amid market disruption sparked by the pandemic. (DLA Piper) McDermott has a post with recommendations on dealing with disruption to the supply chain for wind, solar and energy storage, as well as the project finance market. (MWE.com) Stroock has one on practical steps for landlords and tenants. (Stroock) And Bryan Cave Leighton Paisner has a post on employee assistance through interest-free loans. (BCLPlaw.com)

  • The International Bar Association postponed by a year the annual international mergers & acquisition conference it had scheduled for this June in New York. (IBANet.org)

Lawyers, Law Firms

  • Jones Day topped Acritas’ U.S. law firm brand rankings for the fourth-straight year. (American Lawyer)

  • The new top lawyer for Discover Financial Services, Wanji Walcott, got over $10.4 million in total compensation in 2019. That was more than the company’s CEO got last year. Walcott previously spent almost four years as general counsel for PayPal Holdings Inc. (BLAW)

  • Avis Budget Group Inc., hit by Covid-19 related revenue losses, is saying goodbye to its top lawyer of almost 10 years, Michael Tucker, in a cost-cutting move and upper-management shakeup. As general counsel and executive vice president, Tucker, 62, was getting about $1.2 million in total compensation. His replacement is corporate secretary Jean Sera, who joined Avis in 2006. (Corporate Counsel)

  • A Lowenstein Sandler M&A partner and her family finally made it home to New Jersey after getting stranded in Gautemala as borders closed. (American Lawyer)

  • In Canada, Dentons, DLA Piper, Gowling WLG, Norton Rose Fulbright, are among firms going remote and/or restricting office access. (CanadianLawyerMag.com)

  • Fashion retail industry lawyers say their clients are worried about finances, lease payments, and dealing with layoffs because of Covid-19. (WWD.com)

  • The ousted general counsel of Cinereach Ltd. has to arbitrate her job bias and retaliation claims against the company, a New York federal court ruled. (BLAW)

  • Former Trump lawyer Michael Cohen lost his bid to get out of jail early. (NYT)

  • A Pennsylvania estates lawyer was charged in a $1.4 million ponzi scheme. (BLAW)

Laterals, Moves

  • Gibson Dunn & Crutcher’s New York office added Paul Hastings private equity and M&A partner Stefan dePozsgay. (BLAW)

  • Simpson Thacher & Bartlett’s Houston office added energy and infrastructure lawyer Ravi Purohit as a partner. He arrives from The Blackstone Group, where he was a managing director. (STBLaw.com)

  • K&L Gates’ Melbourne, Australia, office added transactional corporate partner Harry Kingsley, a former top lawyer at rail freight company Pacific National. He arrives most recently from Holding Redlich, with a team including including special counsel Kaveh Zegrati and lawyer Alex Garfinkel. (KLGates.com)

  • Cooley’s London office added Jones Day M&A lawyer Ben Shribman as a partner. He was earlier a senior associate at Allen & Overy. (Cooley.com)

  • Blank Rome added real estate lawyer Jared N. Klein as of counsel in Philadelphia. He joins from Orphanides & Toner. (BlankRome.com)

Technology

  • The Covid-19 crisis will accelerate shifts by law firms and businesses toward using more legal tech, virtual work, and automation of contract management, among other changes, said KPMG’s global head of legal services. Law.com International via Legaltech News)

  • Covid-19 is creating a potential legal minefield for bosses who want to use technology to keep tabs on teleworking employees. (BLAW)

  • GravityStack, Reed Smith’s tech arm, expanded its contract analysis product to include searching for force majeure clauses, which having been getting more use during the Covid-19 crisis. (ArtificialLawyer.com)

  • Legal Intelligencer’s new special section on eDiscovery, among other things, includes a look at eDiscovery lessons from the Trump impeachment proceedings. (Legal Intelligencer)

Legal Education

  • With the LSAT up in the air for now, law school candidates might, as an alternative, want to consider taking the Graduate Record Examination, which is now accepted by over 30 law schools for admission and, for a limited time, can be taken online at home. (AboveTheLaw.com)

To contact the correspondent on this story: Rick Mitchell in Paris at rMitchell@correspondent.bloomberglaw.com

To contact the editors responsible for this story: Rebekah Mintzer at rmintzer@bloomberglaw.com; Darren Bowman at dbowman@bloomberglaw.com

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