Seyfarth Shaw on Friday announced it was reducing equity partner draws, cutting salaries and furloughing 10% of its U.S. workforce, even as labor and employment practices are reportedly seeing more work due to the COVID-19 pandemic.

Starting May 1, all of Seyfarth's non-equity lawyers in the U.S. will see their pay reduced by 10%. The firm is cutting salaries for staffers—the first $60,000 won't be affected, but earnings between $60,000 and $150,000 will be cut by 5%. Anything a staffer makes past $150,000 will be cut by 10%. Equity partners, meanwhile, have seen their monthly draws reduced by 20% starting April 1.

"We already have taken numerous steps to reduce costs that did not impact jobs. And while our financial foundation remains strong, we are implementing these new measures now out of caution," said Seyfarth chair and managing partner Peter Miller.

The 1,900-person firm is also furloughing 10% of its U.S. workforce for 90 days, but Seyfarth will pick up the tab for that group's health coverage. The furloughs will affect staff and a "smaller percent of attorneys."

The firm is also canceling its summer fellow program, but it plans to provide stipends and extend offers for those 2020 summer fellows to join the firm as senior fellows in the fall of 2021. Senior fellows who were supposed to start working at Seyfarth this fall will now start in January 2021.

Despite these cuts, Seyfarth has also established a fund to help support employees and their families who have been impacted by the pandemic. Paul Hastings launched a similar program earlier this month.

The cuts Seyfarth is implementing comes after the firm had a "very strong" financial performance in 2019, something Miller acknowledged in his statement. Last year, the firm bolstered its lawyer head count and was planning to make inroads in Seattle this year, and then Dallas. Asked Friday about the status of those earlier expansion plans, a spokesperson said, "We are evaluating everything and continuing to build for the future."

"The last two years were among our best ever, and our Q1 financial results were also strong," Miller said in Friday's statement. "But after pragmatically assessing the pandemic's impact on our clients and the broader world economy—and the challenges they foretell for the rest of the year—we had to make several additional tough decisions this week."

Managing partners and legal consultants have said that law firms with labor and employment practices were poised to benefit from the work generated by the COVID-19 pandemic. Miller credited the 7.2% increase in revenue the Chicago-founded law firm saw last year to its diversified set of clients that are spread out among its core areas, including labor and employment.

Miller indicated that more cuts could be coming, noting that while these measures mostly affect the firm's U.S. employees, "we intend to follow a consistent approach across our international operations."

"Our hope and goal is to return to normal operations as soon as possible, and our first priority is to bring our people back to work," Miller said.

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