GVC's Leadbeater said that firms looking to use the U.K. government's furlough scheme "makes sense"GVC Legal Head Warns Firms Against Cutting Staff to Protect Partners
He said that while it makes sense to furlough certain staff members, "offloading the risk and the price of this crisis onto less senior people is really bad form."
April 08, 2020 at 07:36 AM
2 minute read
The legal head of top betting conglomerate GVC Holdings has criticised the concept of top law firms protecting partner drawings at the expense of their junior staff.
Michael Leadbeater said that GVC would reconsider its relationships with firms if partners were found to be "offloading the risk and the price" of the COVID-19 outbreak onto its more junior lawyers and non-fee-earning colleagues via furlough schemes or redundancies.
He said: ""If firms are going to effectively make their junior people pay the price for this, I think that's morally repugnant."
He added that it "makes sense for certain people, for example those in office support and admin roles, to be furloughed" and make use of the U.K. government's underwriting scheme which would cover 80% of employees' monthly salaries in a bid to avoid redundancies.
"I think it's really a matter of cultural alignment, which was put front-and-centre of our key requirements when we formed our recent panel. If firms use the government scheme, that's one thing, and makes sense. GVC is working to protect every single job through this crisis," he added.
His sentiment echoes that of other leading in-house lawyers that are placing more importance on the cultural values of the law firms they work with, particularly regarding diversity efforts and on issues like work-life balance.
Pinsent Masons furloughed staff on Monday and cut partner pay in response to the effects of the COVID-19 pandemic, joining several other firms in taking steps to better hedge their businesses against the impact.
Herbert Smith Freehills announced yesterday that it would be reducing partner profit distributions from the start of May, as well as slowing the pace of when they are paid out to partners.
Other firms to have introduced cash-saving measures include Freshfields Bruckhaus Deringer which confirmed on Monday it has suspended profit distributions, and fellow Magic Circle firm Allen & Overy, which asked partners to contribute capital to the business and is gradually reducing its partner profit distributions.
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