RollOnFriday has been calling on firms in the UK to guarantee full pay and job security for their staff for at least a month to help employees during the coronavirus lockdown.
Those which do are anointed Lockdown Champions. Firms which won't go that far, but confirm they have no plans to do so, get to be Good Eggs. Firms which cut staff pay or introduce redundancies in the first weeks of this crisis are tarred with the title of Virus Villains.
Burges Salmon is our star of the week and joins RPC as a Lockdown Champion. The Bristol firm has taken RollOnFriday's one month pledge and confirmed it “will not be cutting salaries or jobs as a result of COVID-19 before the end of April". Kudos to it.
Also deserving of a cape is Woodfords. The firm has just emailed all staff to confirm that they will be paid in full this month and the position will be reassessed in May.
Clean pants for all.
Other firms have emerged in the middle category of Good Eggs. They weren't quite prepared to pledge anything, but made the right noises while preserving their position. “We have made no plans to cut our employees’ salaries or introduce redundancies," said a Pinsent Masons spokeswoman. "Like very many organisations we are looking at how we can be helped in that by accessing the benefits of the UK’s job retention scheme and similar schemes in other jurisdictions."
DLA Piper also gained Good Egg status. A spokeswoman told RollOnFriday, "we can confirm that have not put in place any measures which cut jobs of our employees nor have we put in place any measures to reduce their current salary levels, and have no plans to do so at present."
Macfarlanes is in the Good Egg basket. “The firm is financially robust," said a spokesperson. "We will support our people and our clients through the uncertainties of the months ahead".
Clifford Chance is an undercover Good Egg. Although it declined to comment, insiders tell us that the Magic Circle firm has no plans for either redundancy programmes or salary reductions at present.
Norton Rose Fulbright is adopting the same approach as it did in the financial crisis. It is asking staff to volunteer for the possibility of getting their pay cut by 20% for the next year, with a commensurate reduction in their working hours.
The sign-up process will take place during the next two weeks, and a spokeswoman said that "if the requisite percentage of 75% is reached to make it economically viable", the programme will begin on 20 April.
The firm is also cancelling all bonuses, salary rises and deferring April's payment of partner distributions. In addition, "All non-business critical spend will be reduced or deferred for the foreseeable future".
EMEA Managing Partner Peter Scott said, “In this current crisis, we believe it is prudent to take pre-emptive action to protect our people and our business. The key for us is to ensure that we can respond rapidly to any future changes in levels and types of work at an unprecedented time for the global economy".
“We know this is a challenging time for all of our people and we want to safeguard jobs as far as possible". He added that the scheme, called 'Flex' rather than 'The Lost Fifth', "worked exceptionally well for us a decade ago, which is why we are proposing a similar flexible working strategy aimed at keeping our workforce intact".
Those boxes aren't to clear desks into.
Watson Farley Williams is furloughing “some” roles "based on reduced activity and/or reduced need for certain roles resulting from a switch to remote working", but it is topping up "virtually all salaries" with "a focus on alleviating financial hardship for those on the lowest pay." He added "we are not planning any redundancies". Critics have asked whether firms should be using taxpayer cash at this early stage rather than their own resources, and it’s unclear why not all staff are having their pay topped up.
Some firms have not cut pay but are freezing salaries. Fair enough in the circumstances, no one can really expect a raise at the moment... Allen & Overy confirmed it had cancelled its upcoming annual salary reviews, and was deferring half the bonus due to staff until October. But A&O's partners are also being required to tighten their belts. The firm is cutting their profit distributions and increasing their capital levels. A&O said it was also "deferring" investments and recruitment.
Offshore firm Mourant denied it was freezing salaries. "We are pausing non-essential recruitment, deferring our salary review process until July (we have not frozen salaries) and paying bonuses for last year in two instalments rather than one", said a spokesman. Which sounds very much like salaries are being frozen. A source complained to RollOnFriday that splitting the bonus could result in them not receiving the second part if they are made redundant later in the year.
Elsewhere, other firms are already wielding the knife with indecent haste.
Regional firm Ashtons Legal confirmed that it was putting just over 25% of its staff on furlough, including reception and administrative office positions, and it was cutting pay. All staff earning £35,000 or more "are being asked to accept a pay cut which ranges from 15% for the majority of staff up to 30% for the highest paid staff for the two months of April and May," said a spokeswoman. At least the partners are also taking a hit. Equity partners' drawings are to being reduced by 30% for the same two month period.
Ed O’Rourke, Ashton Legal's CEO, told RollOnFriday, “the sooner we can all get back to normal the better but until we see how the situation develops, and how our marketplaces are affected, we are taking prudent steps."
US firm Cadwalader, Wickersham & Taft is cutting pay for legal staff and senior administrative staff by up to 25% for an estimated period of four months, according to a report by Above The Law. Other administrative staff with salaries under $100,000 will have their salary cut by 10% for the same period. The firm, which has an office in London, will also pause the distribution of partner payouts.
A firm reveals its true self to staff
Firms willing to make the One Month Pledge should email us at [email protected] If you're an employee, let us know where your firm stands. Are they a Good Egg or a Virus Villain?