A Husch Blackwell office.

Just days after making a return to the Am Law 100 on the heels of a successful 2019, Husch Blackwell has implemented additional measures to respond to the COVID-19 economic downturn, including laying off lawyers and staff.

The Kansas City, Missouri-based firm said Thursday that it will use a combination of  terminations, furloughs and pay cuts of attorneys and staff, and a 10% holdback of fixed income partner compensation beginning on May 1. The latest moves follow a decision in March to increase equity partner holdbacks as well.

To "align its head count with the downturn in the nation's economy," the Husch Blackwell is implementing a combination of job terminations, furloughs, salary reductions, transition to part-time status, early retirements and deferrals, the firm said.

In the statement, Husch Blackwell chairman Greg Smith said the firm "made every effort" to avoid these actions, but they are necessary because the economic crisis is "more prolonged and extensive than early estimates indicated."

According to the firm's statement, both lawyers and staff were affected by some or all of the measures, but the total number impacted "represents less than 10% of the firm." Smith said many of the impacted employees are on furlough simply because there is little for them to do while the firm is in "work-from-home mode."

Additionally, the firm will modify its 2020 summer associates program by splitting the incoming class into two groups that will participate in one of two consecutive five-week programs set to begin in mid-June.

Paul Eberle, Husch Blackwell's chief executive, said in the statement that the actions are "necessary to maintaining the health of the firm."

"We feel our plan strikes the right balance between maintaining our financial wherewithal and maintaining ample resources to provide excellent client service and to continue growing our business," Eberle said.

The newly announced cost-cutting measures come after the firm's C-level staff took pay cuts and equity partners cut monthly draws by an additional 15% of base compensation, increasing  the equity partner holdback to 35% from 20%. Those earlier cuts enabled the firm to commit to paying all employees for 60 days after it transitioned the workforce to working remotely on March 18, the statement explained.

The firm posted strong financials for 2019, capturing the 100th spot on the Am Law 100 ranking. Gross revenue hit $380.3 million, up 7.6% from 2018, on lawyer head count growth of 3.3%. And revenue per lawyer came in at $611,000, an improvement of 4.1% from the  prior year.

Profits per equity partner were $650,000, up 9.6% from 2018, as the number of equity partners declined by 4.3% from 2018. Net income was $100.8 million, up 5% from 2018, making for a profit margin of 27%.

Earlier this month, the firm's partners elected Catherine Hanaway, a partner in St. Louis, as chair-elect. She will succeed current chairman Greg Smith on April 1, 2021. Hanaway will not only be the first woman to lead the firm, but she brings a background in government and politics to a job typically held by a Big Law veteran.

Husch Blackwell has cut jobs before. In 2017, the firm, which has 18 offices, cut about 40 partners and of counsel—then roughly about 4% of its head count—in a mixture of retirements and "year-end transitions."

During the last economic downturn, the firm reduced its associate and nonequity partner ranks by about 20 in 2010, and cut about 20 associates in 2009.

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