Trans-Atlantic law firm Womble Bond Dickinson has furloughed and laid off members of its workforce and reduced compensation for some attorneys and staff in response to the coronavirus outbreak, but sources say the firm had faced financial headwinds entering 2020.
The firm of about 550 lawyers said Monday in a statement it had made the moves in response to the economic disruption brought on by the coronavirus pandemic. The cuts were first reported by Above the Law.
It has furloughed some selected employees for 60 days and let go another small group, it said, though the firm declined to comment on the specific number.
The firm also temporarily reduced compensation for “remaining staff and attorneys in this group.” Those making over $100,000 received a 10% pay cut, those making $100,000 to $50,000 got a 7.5% cut, and those making below $50,000 got a 5% reduction.
“Decisions like these are never easy, but we believe taking these steps now will curb the negative economic impact of the COVID-19 pandemic and keep our firm strong and well-positioned to continue serving our clients at the highest level,” the firm said.
However, several sources close to the firm say that Womble Bond Dickinson entered 2020 already on its back foot, significantly missing its 2019 budget.
Bloomberg Law spoke with multiple sources with knowledge of the firm’s recent yearly financials. Sources declined to be named in order to preserve relationships within the firm.
Coming off of a successful 2018, sources said Womble Bond Dickinson felt bullish about its future and over-projected its budget for the following year, which played a role in its budget shortfall.
However, sources claim there were other reasons for the miss. Matters dried up through settlement or resolution, and offices underperformed, including its Houston outpost, which it opened in January 2019. They also cited an overall lack of strategic direction by the firm’s management.
As a result of that fiscal 2019 miss, most of its equity partners took a pay cut, which some sources noted was 10%.
“The firm experienced its highest revenue year in firm history in 2019,” a spokesperson for Womble Bond Dickinson said in a statement to Bloomberg Law.
“Although the firm fell short of an aggressive revenue budget that was premised on 2017-2018 growth, we can confirm that a majority of our partners did not receive a 10 percent pay cut,” the spokesperson added.
The firm did not elaborate on reasons behind the budget shortfall or provide further information on the pay cuts.
Womble Bond Dickinson was officially formed in November 2017 through the merger of the UK-based Bond Dickinson and the North Carolina-founded Womble Carlyle Sandridge & Rice. Though unified by a single name, the firm operates as two non-profit-sharing partnerships with their own independent boards.
The firm is one of a growing number that has announced changes to staffing and compensation amid the coronavirus outbreak. Reed Smith, for instance, said Monday it would slow its cash distribution to partners as a “precaution.”