HSF Latest to Reduce Partner Profits, Suspend Salary Reviews
The firm has also changed how its bonuses will be distributed this year, as it joins others in dealing with the effects of the COVID-19 pandemic.
April 07, 2020 at 06:25 AM
2 minute read
Herbert Smith Freehills has joined a growing number of firms taking steps to financially protect itself in response to the COVID-19 crisis.
From May, the international firm will reduce its partner profit distributions and also slow the pace of when they are paid out to partners.
It has also frozen salaries at the firm and pushed back pay reviews until October.
The firm will also defer 50% of bonuses, usually due in July, until later in the year. 50% of bonuses will be paid in July while the remainder will be paid "by the end of the financial year", according to a firm statement.
All changes are effective globally.
A statement from a firm spokesperson said: "This is a global and evolving crisis, with major human and economic impact. We cannot predict how long it will last, or how deep it will be. Like all businesses, we have carefully considered the prudent measures we need to take to protect the firm and our people.
"No business is immune to the effects of Covid-19 and keeping our business strong for the future remains our priority."
The statement added that the firm had undertaken a capital call during the last 18 months, and is in "a strong financial position" following that.
Last year, HSF reduced its debts by more than £80 million after an aggressive push to tighten up its financial discipline.
Other firms have taken similar action in light of the virus. Freshfields Bruckhaus Deringer confirmed on Monday it has suspended profit distributions, while at the end of March A&O asked partners to contribute capital to the business and is gradually reducing its partner profit distributions.
Cadwalader Wickersham & Taft, Reed Smith and Norton Rose Fulbright have all said they will be taking steps including lowering or deferring partner pay outs.
|Read More:
Five Financing Options for Law Firms in Challenging Times
Pay Cuts, Layoffs, and More: How Law Firms Are Managing the Pandemic
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