Bracing for Turbulence, Lowenstein Sandler Holds Back Some Partner Pay
Despite the move, the firm's executive board said it was "pleased" with the current level of client activity during the coronavirus pandemic.
April 08, 2020 at 07:18 PM
3 minute read
Lowenstein Sandler building, Roseland, New Jersey. (Courtesy photo)
Lowenstein Sandler confirmed Wednesday it was temporarily holding back some compensation for equity partners, joining a slew of Am Law 200 firms that have responded to the financial uncertainty raised by the coronavirus pandemic with pay cuts, layoffs and furloughs.
The 300-lawyer firm, based in New Jersey, said that although it was doing well financially—it said March 2020 was its second-strongest financial month in the last two years—it had decided to pause a portion of planned distributions for equity partners. Above the Law first reported the cuts.
"Given our strong performance in the first quarter of 2020, we were in a position to make a substantial additional distribution to our partners at the end of March; however, to ensure our firm's continued financial strength in the face of the uncertainty posed by the coronavirus, our executive board determined that prudence dictated we hold back those funds until we know more," a firm representative said in a statement.
The firm had healthy growth in 2019 that may soften the financial blow of the coronavirus pandemic, at least for now: The firm took in more than $343 million in gross revenue last year, an 11% jump from 2018, while revenue per lawyer increased to $1,116,000.
The firm has 50 equity partners that will be affected by its latest move, according to ALM data. Lowenstein Sandler also clarified that base draws received by all partners would stay the same, meaning the firm's 59 nonequity partners would be unaffected by the cut.
"We want to clarify that the firm has not reduced partner draw, but is holding additional distributions that would otherwise be available to its equity partners in order to further strengthen its very solid financial position," the firm said. "Our executive board continues to closely monitor performance at every level, and we are pleased by the level of client activity that we are seeing across our practice groups through the first week of April."
Read More
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