Osborne Clarke is cutting pay by 7%, while Slaughter and May is reducing the salaries of its newly qualified solicitors to £87,000.
Last month Slaughter and May deferred annual salary reviews which would have occurred in May, and decided not to move lawyers through their salary scales. In order to further mitigate against the expected downturn caused by the coronavirus, it has now decreased NQ salary for lawyers qualifying in September to £87,000, RollOnFriday understands.
Given that each cost-saving measure has spread like wildfire through the market, expect other top firms which haven't already imposed pay cuts at that level to follow suit. And just when they had all bumped up NQ pay packages to six figures, too.
The virus was actually cooked up in an HR lab.
Meanwhile, Osborne Clarke has taken the "unfortunate but prudent decision" to reduce staff pay by 7%, it confirmed to RollOnFriday.
"While there are encouraging signs that the pandemic is abating in the UK and in some of our international markets, normal economic and business activity is expected to remain subdued at best, throughout 2020, and possibly beyond", said a spokesperson.
Cuts of 20% have become standard as firms seek to preserve a war chest, so 7% seems pretty reasonable by comparison. The cut will apply from 1st June for 11 months, but only to staff earning £30,000 or more, and no-one will have their pay cut below £30,000. And Osborne Clarke has said that if it reaches its new financial target for 2020/21, it will pay everyone back.
The cut forms part of a number of measures employed by the Bristol-based firm, which is one of the happiest law firms in the UK, to address the impact of the virus. OC is also offering employees voluntary options including part-paid sabbaticals, early retirement, a reduction in hours or moving to a job share.
At the top of the firm, its UK partners are deferring 75% of their special drawings while proceeding with “long-planned additional capital contributions". And, from 1st June, they will also be subject to a 10% cut in their monthly draws (essentially their salary) for 11 months.
"While we are in a relatively strong cash position, and introduced more stringent cost control a few months ago, the partnership has agreed that further measures are prudent", said a spokesperson.
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Doesn’t sound very healthy over at Slaughters.
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Slaughters will still be taking in more than pretty much every other City firm. They’re just extremely cautious. Expect this to be overturned within a few weeks.
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The OC deal sounds like a close replica of the Weightmans scheme.
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Prudence is a virtue. They ought to be praised.
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Meanwhile at SPB, where the axe fell down at 15% even on the admin assistants earning £20,000 p.a.
Shows you the difference between the sensible chaps at OC and the fetid swivel-eyed gremlins at SPB.
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Everyone knew Slaughters weren’t going to be able to keep up the new NQ salary. The Magic Circle firms reluctantly brought it up to 90ishk with so called bonuses that brought it up to 100k - they’re using the current economic uncertainty as an excuse to drop the salaries they didn’t want to raise in the first place.
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OC scheme sounds like Winckworth Sherwoods. Only WS went a bit more for the jugular with 15% cut.
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Annie, are you ok? Are you ok, Annie?
Not quoting MJ, just think you are terribly wrong.
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Hopefully Slaughters at the very least keep retention rates high after shafting soon-to-be NQs. This really isn’t a good look for the firm.
That being said, the outlook at Lovells and NRF (among other firms) is much, much, worse... Any chance ROF could report on what they’ve told current fourth seat trainees?
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Back in the real world, nurses and care workers on a lot less than £87k are exposed in the front line and some are dying. Lawyers complaining about being paid large sums is unedifying. I think the sheltered little NQ darlings can cope with earning only £87k for being in many cases glorified trainees. They won’t have much work to do anyway at this rate.
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A cursory look at Slaughters‘ recent work will tell you they are doing just fine at the moment. Some really great deals.
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Just the start expect the big players in consumer law to make announcements soon.
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Will not be surprised if other magic circle players follow suit but disguise the damage with a performance bonus inclusive figure.
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Nobody driving cars or at work so no accidents for the ambulance chasers which means no work for the defendant anti ambulance chaser factions either. The CFA revenues will dry up for the £130 per hour for a partner and a fiver for a paralegal work. That will hurt over the next 2 years if they can survive it which is unlikely.
No corporate deals or property deals of note for 18 months.
Law firms already going bust. More will go bust.
There will be more pay cuts and more redundancies. The redundancy delay scheme aka Furlough will end and the farce will be exposed and unemployment in the services sector will increase ten fold.
7%, 10% or 20% cuts will seem like a blessing once you realise where this is heading.
Like lemmings over the cliff they go, bitching and whining about pay cuts right up to when they realise this is serious and they’ve all lost their jobs.
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Dunno about you but we have several chunky deals happening and in the pipeline
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Top firms are still busy - the crisis is clients not being able to pay or are asking to pay later. They think firms are banks.
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@wotnowork? I didn't take from this article that any of the lawyers were complaining (or "bitching and whining" rather) about the pay cuts...
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Better a reduced salary than being laid off by stealth dismissals like a notorious US firm is doing to cut costs.
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Are they going to keep the wage cuts under review incase the market picks up before June 2021?
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Graduates only pick slaughters because of some misplaces notion of ‘prestige’. Ultimately in this life cash is king- go US or go go home (not K&E though theyll send you home without asking)
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Employment dudes out there - how does this work?
If my firm unilaterally cuts everyone's pay by 20%, can I tell them to get stuffed?
Asking for a friend.
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Well said Anonymous @ 13:41
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Can we all take a moment to remember the unfortunate staff at this difficult time...
Namely those staff at Slater & Gordon whose LoveBoat party on The Thames has been cancelled this Summer.
This is especially disappointing for those paralegals looking to mingle & move up the organisation.
Thank you for your time everyone.
Please remain on the ball at all times.
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I’d like to correct some falsehoods I have seen posted. I’m at K &E and can confirm that no one at the London office has been furloughed or laid off as a result of Covid-19.
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@ Joe 15:24 -
Hi Joe, how’s the HR Department doing? All okay?
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TBF the OC cuts seems very reasonable! Lots of other firms imposed biggers cuts, with no promise to pay back and / or are keeping quite like cowards. 7% aint so bad, good on OC once again
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@15.23 - still bitter ?
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@15.23.
Look, it was either the boat party or the adverts, and we f*cking love the adverts. Nothing says "prestigious law firm" like an advert. Our viewing figures on Dave routinely hit 35. This is a strategic, long-term decision.
Slater and Gordon Management
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Peggy 22 May 17.32 - Good luck with Jarvis, Alinia and Mr Motivator I'm sure with these leaders everything will be just great.
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Can somebody explain where all the K&E rumours are coming from? I am at K&E and genuinely haven’t seen a single person laid off and the firm has taken a deliberate decision not to furlough people, so all support staff are still employed and working on full pay.
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@ Confused 23:51
No need for the obvious to be explained to you. There’s no smoke without a fire. Not what I’ve heard either...
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Same. It must be embittered ex-associates with too much time on their hands.
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@ Confused - I’m not agreeing with you mate.
just cos you haven’t seen them doesn’t mean they ain’t happening
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"mate." "'cos." "ain't."
You don't work at K&E.
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@ 21:00 23 May
They might. Whenever Hoolie is losing an argument she resorts to a "whatever dude" to pretend to be dismissive.
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I’m at K&E as well and haven’t seen or heard of anyone getting laid off.
Can anyone actually point to which practice or support team people are supposed be getting laid off from?
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Shoosmiths has gone about it the nasty way - having little back-room "it isn't working out for you here, is it?" discussions backed-up by low performance ratings and demands for agreed pay cuts. One of my senior associate colleagues from my intake is getting this kind of pressure from his line manager via Jabber and so am I - and we can't be the only ones. I fucking hate this shop so much...
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Looks like Joe from HR is back.
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@23.10
Likewise.
It's all well and good "down voting" people that say this (me included), but some firm evidence would be nice. Perhaps those tho have been let go were just a shit?