Reed Smith to Lay Off London Lawyers, Extend Salary Cuts and Trim Workweeks
Among new COVID-19-related measures announced Monday, the firm's 350-attorney London office will see "targeted redundancies" of both lawyers and professional staff.
June 01, 2020 at 02:23 PM
3 minute read
Reed Smith announced a new round of measures Monday to shore up its finances in the face of the COVID-19 crisis, including an extension of previously announced salary reductions, truncated workweeks for personal assistants, and the elimination of fewer than 20 lawyer positions in London.
The firm said London—its largest office, with over 350 attorneys—would see a "targeted redundancy process" that would impact less than 20 attorneys and 10 professional staffers. The firm appears to be the first major firm with a significant presence in London to lay off fee earners there.
Across the firm, professional assistants and an undisclosed number of additional professional staff will move to a four-day workweek, with corresponding pay cuts. A small number of employees will be furloughed on a temporary basis. And professionals earning over $100,000 who haven't been otherwise affected by reductions will take 6% salary cuts.
"Since the beginning of the COVID-19 pandemic, our priorities have always been to protect the health and wellbeing of our people, to safeguard jobs wherever possible, to provide the highest quality service to our clients, and to manage the firm prudently," global managing partner Sandy Thomas said in a statement. "As a result of the prolonged economic uncertainty caused by COVID-19, we have made the difficult decision to take further actions to ensure our business emerges from the pandemic in a position of strength."
Thomas emphasized that Reed Smith's equity partners would continue to bear the largest share of the financial burden of the firm's action. The firm first took moves to slow partner draws in late March by 40% for equity partners and 15% for nonequity partners. It then announced a cut to associate compensation in mid-April. Now the pay reductions will be extended through the end of 2020, with "fixed share" partners seeing a 14% cut on an annualized basis, while counsel will see a 12.5% reduction and associates will take a 12% hit.
The firm said that it expects the measures to be temporary, and health care and benefits will remain untouched. It added that similar actions were already taken in Asia, where the firm has four offices.
"Like all well-run businesses, during the normal course of managing the firm we continually evaluate the size and shape of our global organization to ensure that it matches the needs of our clients," Thomas added. "This practice is as important as ever during the pandemic."
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