(Photo: Andrey_Popov/Shutterstock.com) Why More Firms Should Cut Salaries Sooner Rather Than Later
As we approach the end of April, firms are running out of time to materially reduce 2020 costs, Hugh A. Simons writes. Salary cuts have appeal not just because compensation comprises about two-thirds of total cost, but also because they deliver immediate savings.
April 27, 2020 at 03:36 PM
6 minute read
The original version of this story was published on The American Lawyer
The consensus estimate for 2020 revenue is a decline of 15 to 20 percent from last year. And yet, as of April 26, less than a quarter of the Am Law 200 have reduced salaries or laid off personnel. This feels like a sluggish response given what the partner profit implications might be. A simple analysis supports this intuition.
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