Steve Forte, Smith Gambrell & Russell, Atlanta. (Photo: John Disney/ALM)

After a strong 2019 fiscal year and first quarter, Smith Gambrell & Russell said it will not make furloughs or layoffs, but the firm has temporarily reduced partner and staff pay "as prudent management" amid the economic turmoil from the coronavirus pandemic.

The Am Law 200 firm is deferring partner draws by 20% and cutting pay for all employees, including associates, by 10%, said Smith Gambrell's chairman, Stephen Forte, in an exclusive email to the Daily Report on Friday. He said the firm's decision was informed by "our approach of self-sacrifice by all as a means of compassionately preserving the jobs for all in the firm."

The pay cuts took effect April 1, Forte said, adding that "swift, even-handed action is best rather than having our people in a state of paralysis as they wait for the other shoe to drop." 

He added that the firm has "committed to equitably restore lost compensation due to the adjustment when we see our way clear of the effects of this crisis."

The Atlanta-based firm has about 240 lawyers, including 148 partners, in 10 offices. 

Smith Gambrell's partnership and executive committee elected not to make any furloughs or layoffs, Forte said, even though some employees' jobs "do not mesh with a total work-from-home environment." 

The firm's ethos is "we are in this together," Forte explained. "We want the team fully intact when the curtain comes down on the virus." 

"Prudent management in the face of this approaching tsunami-pandemic motivated us to get ahead of the curve, while we are all working hard to flatten it," Forte said. He added that one of his favorite quotes, which he's been repeating to Smith Gambrell's lawyers and staff, is: "Disasters remind us that we depend on each other." 

Smith Gambrell reported record revenue and profit in 2019, and Forte said that for the first quarter, "we are well ahead of last year's record performance." That gives the firm a financial buffer as the pandemic's economic toll continues. 

The firm posted a record 17% revenue increase last year to $133.4 million and a 32.4% increase in net income to $49.7 million. That boosted profits per equity partner by 27.5% to $903,000.

Smith Gambrell has not yet made a decision on how to handle the summer associate program, Forte said. It is considering either a shorter four-to-six week program starting in June or early July–or a virtual program, he said, "although that seems less desirable given a remote work setting."