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Baker Botts Reduces Lawyer and Staff Salaries Amid Pandemic

April 27, 2020, 4:54 PM

Baker Botts has announced salary reductions for its lawyers and staff and a delayed start date for new associates as the legal industry reels from the economic impact of the coronavirus pandemic.

In order to avoid layoffs and preserve its employees’ income, lawyers and staff at the firm will see temporary salary reductions starting May 1, Baker Botts chairman John Martin said in an internal email to the firm obtained by Bloomberg Law.

Partners at the firm agreed to take compensation reductions to “absorb the bulk of the financial impact expected from the pandemic,” Martin’s message said.

Counsel at the firm will receive a 20% to 30% cut, based on salary level, according to the email. Associates will receive a 20% cut, while staff will see cuts ranging from 0% to 25%, based on their salary level.

The email said the firm will not be reducing salaries for employees making less than $70,000 a year.

“The unprecedented financial stress on clients and the global economy due to the pandemic has prompted us to make the difficult but necessary decision to reduce salaries temporarily, with greater reductions at higher levels, to protect our firm, retain our extraordinarily talented team, and preserve the income of our most vulnerable employees,” Martin said in a statement provided to Bloomberg Law.

The temporary cuts will remain in place until July 31, after which the firm will reevaluate its strategy going forward. In the meantime, however, the firm will evaluate and potentially award interim bonuses to “exceptional contributors,” based on performance and economic and firm conditions, the email said.

Martin’s message also noted that the firm will delay the start of its incoming fall associate class to 2021, mirroring a decision made by several other law firms including Orrick, Herrington & Sutcliffe and Seyfarth Shaw.

As of last week, more than 60 law firms have announced some combination of layoffs, furloughs, and pay cuts as a way to mitigate the financial impact of the pandemic.

Among the most recent firms to reveal a change is Reed Smith, which says it will defer equity partner distributions, in addition to other previously announced measures. McDermott Will & Emery recently announced that it would be laying off professional staff and furloughing others.

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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