Allen & Overy Holds Capital Call, Cuts Partner Payouts and Freezes Associate Pay
The Magic Circle firm has also delayed some bonus payments and deferred some recruitment as it takes steps to deal with the pandemic disruption.
March 31, 2020 at 04:41 AM
3 minute read
The original version of this story was published on Law.com International
Allen & Overy has called for partners to contribute capital as it becomes the latest firm to take measures to protect itself financially in light of the disruption caused by the coronavirus pandemic.
The Magic Circle firm is holding a cash call and is gradually reducing its partner profit distributions, it confirmed on Tuesday. It has also frozen its associate and support staff pay, meaning it will not undertake annual salary reviews due to take place in the first quarter of the forthcoming financial year.
Meanwhile bonuses due to be paid to fee-earners and senior support staff in July will be split into two payments. Half will be paid in July, while the remaining half will be paid in October.
The firm, which has no debt, has also deferred certain recruitment and cancelled several events, a spokesperson said in a statement.
"The COVID-19 global crisis is an unprecedented situation for us and our clients," Allen & Overy said in the statement. "The firm is in a very strong financial position but given the unknown nature of the evolving challenges, and their long term impact on our markets, it is sensible to introduce some prudent management measures as part of our ongoing scenario planning.
"A&O retains good diversification across practices and one of the broadest international offerings among the global elite firms, so we are confident in our resilience if economic conditions worsen."
Various firms are taking action to ensure they remain financially secure. Reed Smith is reducing partner distributions while Linklaters, Pinsent Masons and Fieldfisher are all considering a reduction or a delay to the distribution of profits to partners.
The impact of the crisis on bonuses and redundancies are high on lawyers' agendas, according to research undertaken by Law.com International's U.K. arm Legal Week in March.
The majority of respondents to the poll said that they expect bonuses either to be much smaller for the coming year, or to not be paid at all across any level of seniority.
Meanwhile the majority of lawyers said that they expect redundancies. Almost half of respondents said that they expect firms to review support functions and look to "trim excess fat" while another 30% added that they predict firms will undergo a "dramatic restructuring of their practices."
Several U.K. listed firms have taken measures to hedge themselves against the financial impact of the crisis.
The Ince Group cancelled an interim dividend that was due to shareholders by April 16, 2020. It has also decided to delay the announcement of its full year results from March 31 to 'early July.' according to a statement on the London Stock Exchange.
Meanwhile, Knights will reduce its board member salaries by 30%, and slash the salaries of "all staff whose salaries are £30,000 or more" by 10%, from April 1, it announced earlier in March.
Simon Lock contributed to this report.
Read More:
Lawyers Fear Billing Delays, Bonus Drops and Job Cuts Amid Virus Panic
Reed Smith Will 'Slow' Partner Pay In Response To COVID-19 Pressures
Big Four Legal Arm Head Says COVID-19 Will Change the Way Law is Practiced
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllSo You Want to Be a Tech Lawyer? Consider Product Counseling
Jones Day Client Seeks Indemnification for $7.2M Privacy Settlement, Plus Defense Costs
Law Firms Mentioned
Trending Stories
- 1Judge Denies Sean Combs Third Bail Bid, Citing Community Safety
- 2Republican FTC Commissioner: 'The Time for Rulemaking by the Biden-Harris FTC Is Over'
- 3NY Appellate Panel Cites Student's Disciplinary History While Sending Negligence Claim Against School District to Trial
- 4A Meta DIG and Its Nvidia Implications
- 5Deception or Coercion? California Supreme Court Grants Review in Jailhouse Confession Case
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250