Am Law 100 firms Baker Botts and Cadwalader, Wickersham & Taft are restoring pay after they imposed cuts a few months ago as the economy turned south due to the COVID-19 pandemic.

The managing partners of both firms said in letters to colleagues that the austerity measures implemented months ago put their firms in a position to restore pay, even as uncertainty in the economy continues.

"As the pandemic continues and parts of the U.S. experience a substantial increase in COVID-19 cases, it does not feel as though we are 'out of the woods' with respect to this health and economic crisis, nor is it even clear that we have seen its peak impact," Cadwalader managing partner Patrick Quinn wrote Wednesday.

But Quinn wrote that "although the crisis is not over," the salary reductions, along with other cost-containment measures, put the firm in a position to withstand its effects.

While the pandemic is still affecting some areas of New York-based Cadwalader, Quinn wrote, many lawyers are busier than projected before the virus.

Also on Wednesday, Baker Botts managing partner John Martin wrote in an internal email that  "despite the unprecedented environment we have been operating in during the pandemic, through the hard work of many and as a result of the measures we have implemented across the firm, we have exceeded our post-COVID financial performance forecast to date."

Martin announced that effective Sept. 1, Baker Botts will restore 50% of the compensation reductions put into effect May 1.

In May, Baker Botts, based in Houston, imposed salary cuts on associates and staff making more than $70,000.

In addition to restoring half of the pay cuts, Martin wrote that Baker Botts will pay interim bonuses for non-partner timekeepers who have made "exceptional contributions" for the May 1 to July 31 period. More than 200 lawyers are expected to receive the bonus in August.

Recognizing the challenges of working from home, the firm also will pay a $1,000 stipend to all non-partner timekeepers and staff who use the firm's technology systems "to enhance your working from home set-ups" and continue to provide good client service.

When announcing the temporary pay reductions three months ago, Martin wrote in an email to the firm that partners had agreed to compensation reductions "to absorb the bulk of the financial impact." He did not address partner compensation in the Wednesday communication, and a spokesman declined to discuss it.

Cadwalader will reverse temporary compensation reductions ranging from 10% to 25% for attorneys and staff, effective Aug. 1. The firm had said when announcing the pay cuts that it hoped to reinstate normal compensation after four months.

However, Quinn noted that this continues to be a difficult period for clients and the firm.

"We will continue to monitor the impact of the crisis and make decisions in the weeks and months to come that are in the best interests of our firm, our people and our clients," he wrote.

In April, Cadwalader cut associate salaries by 25% and imposed pay cuts of 10% to 25% on staff in response to the coronavirus, in addition to halting partner pay.

The firm confirmed Thursday that partner distributions will also return to normal.

A number of other large and midsize firms also recently announced they would restore at least some of their compensation cuts, including Lowenstein Sandler, Cozen O'Connor, Bryan Cave Leighton Paisner and Munck Wilson Mandala, with some of the firms also citing higher than expected demand and financial performance.

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