Cadwalader Wickersham & Taft has temporarily reduced legal and senior administrative staff pay by 25% and frozen distribution of partner payouts in an effort to avoid layoffs during the coronavirus crisis.
Starting April 1, senior administrative staff and members of the firm’s legal staff will take a cut for the length of the crisis, and administrative staff making less than $100,000 will get a 10% cut for the same period, according to a memo from managing partner Patrick T. Quinn to the firm obtained by Bloomberg Law. The memo dated Tuesday said Cadwalader expects the length of the crisis to be the next four months.
The memo said that partners at the firm will not receive their capital distributions during the “peak months” of the crisis.
“The longer we wait to take action in response to the virus, the more difficult it will be for us to avoid much more drastic measures later on,” Quinn wrote. “Our first priority during this difficult time is to do our best to avoid any layoffs.”
Although some of the firm’s lawyers and staff have been busier attending to urgent client needs related to the coronavirus pandemic, Quinn wrote he expects that overall revenues and billable hours will drop because of the crisis.
“The massive and unprecedented effect of the virus on the economy and the shuttering of businesses have immeasurably changed the landscape of the work we have been doing,” he wrote.
Big Law firms have begun to announce pay cuts they say will minimize the damage caused by the crisis. Reed Smith and Womble Bond Dickinson have both announced changes to their compensation practices thus far.