How mid-tiers are reacting to COVID-19
The full impacts of the coronavirus pandemic are yet to unfold, and while numerous firms have implemented cuts in different areas, some are hopeful they can hold the line.
Over the last fortnight, there have been a number of global and national firms across Australia to implement measures to ensure their viability in the wake of the global pandemic.
Among the BigLaw firms, Herbert Smith Freehills made cuts to partner profit distributions and has cancelled salary reviews, Gilbert + Tobin has cut back on 50 per cent of partner draws, Norton Rose Fulbright has temporarily stood down three per cent of its staff and asked the remaining employees to work reduced hours. A wrap-up of actions taken by other BigLaw firms can be found here.
Elsewhere, national firms have also had to make tough decisions. Hall & Wilcox confirmed impacts upon partner profits and distribution, Macpherson Kelley has requested temporary reductions in salaries, and both Holding Redlich and Maddocks have seen partners take a reduction in draws.
The NewLaw space appears to be bucking the trend at present, with a handful of big players in the space noting that not only are they avoiding cuts but are looking to grow.
Lawyers Weekly spoke to a number of mid-tier law firms to see how they are faring amidst the pandemic and determine what actions, if any, they are looking to take.
DWF, McCabe Curwood, Slater and Gordon, Thomson Geer and Wotton + Kearney were also approached but had not responded by the time of filing this story. Colin Biggers & Paisley, McDonald Murholme, Piper Alderman and Squire Patton Boggs opted not to comment.
Johnson Winter & Slattery
JWS managing partner Peter Slattery told Lawyers Weekly that the firm has not yet had to make any cuts to partner profits, with the firm’s business activity levels having “held up reasonably well” to the end of March.
“Like all businesses we are modelling various scenarios and will take steps to address business expenses and the firm’s cash flow as changes in circumstances warrant that action,” he said.
When asked if the firm was anticipating any cuts in the coming weeks, the answer was “no”, noting that the firm is not making predictions about how the pandemic will impact upon it, either in terms of severity or duration.
Nor, Mr Slattery said, has the firm made any decisions that will affect the more junior members of staff. The firm has, however, implemented a hiring freeze.
“We are taking a considered approach and will be doing everything we can to avoid decisions that will have a significant impact on our people,” he said.
“There is no doubt that the coronavirus will impact some areas of law over the next few months, but there are also a number of practice areas where we are seeing a significant increase in work. We have a flexible resourcing structure, which means our associates are not tied to specific practice areas and can be redirected to areas that need more support.”
A spokesperson for the national plaintiff firm said that it had not yet taken steps, similar to those taken by some global and national players, with respect of its workforce, nor is the firm intending to take such steps in the coming weeks.
“Indeed, our work across all of our practice areas continues. We have put a hold on hiring any new staff for the foreseeable future,” the spokesperson said.
Maurice Blackburn has been able to put in place “sustainable and scalable solutions to the pandemic’s disruption of normal business”, the statement continued.
“We have staff continuing to work in all areas across our firm, with the majority of this now being done remotely. The scale and speed with which we made that transition to ensure our clients were not disadvantaged [are] a true credit to our staff,” the spokesperson noted.
“This means our firm can continue to focus on our top priority of progressing our clients’ matters. More than ever, they need access to the compensation they are owed for injuries and wrongs that are not their fault or were sustained in the course of trying to earn a living.”
In comments provided to Lawyers Weekly, MR managing partner Kristen Podagiel said that the legal industry is “of course not impervious” to the economic impacts of COVID-19, which is presenting significant challenges to firms across the globe.
“We acknowledge this challenge will mean some tough decisions and significant changes in the way we operate and service our clients,” she mused.
“We are still working through the full extent of these challenges as a unified partnership and taking a very considered approach to impacts [pn] our people, firm and clients.”
In conversation with Lawyers Weekly, Mills CEO John Nerurker said the firm doesn’t have any plans for a major restructuring.
“We note that client demand was still steady throughout March. However, there is no doubt that the world has changed very rapidly since then and we are keeping a close eye on client activity and will gauge our response accordingly,” he said.
“There has been some reduction in our casual workforce and a reduction in hours in some transactional teams, but not the across-the-board measures adopted in other firms.”
Looking ahead, the firm is keen to keep pursuing projects it had in the pipeline before the pandemic hit, including its new Innovation Masterclass and its strategy of investing in and partnering with legal tech start-ups.
“The current COVID-19 crisis has confirmed that the strategic goals we have set over the past five years, such as providing innovative solutions for clients, moving up the value chain and deepening industry relationships, are critical to the firm’s longer term viability,” Mr Nerurker said.
Shine COO Jodie Willey said that the firm has been “incredibly agile” in the challenging circumstances caused by the pandemic.
It has not reduced staff or staffing hours, she said, and will be looking to progress business outcomes and priorities remotely.
The national plaintiff firm has not, Ms Willey said, put a hold on hiring new staff.
“We are still hiring new staff at both legal and support staff levels. We are looking at the current challenges as being on the way, and not in the way of our success,” she said.
This said, it is still “early days” of the pandemic, she added, and the firm has plenty of work ahead of it.
“We do expect demand in some practice areas to rise, and anticipate potential decreases in other areas. We have scale and capability to manage and mobilise staff where the work demands it,” Ms Willey proclaimed.
“Essentially, what we have learnt as a business is that we need to think differently and work more creatively to solve problems, use technology, work with stakeholders without losing our core priority, which is a focus on outcomes. We’ve given people the tools and the options to work from home to remain committed to outcomes that serve our clients.”
Mary Digiglio, who is the managing partner of Sydney-based mid-tier firm Swaab, said her firm has not yet made “any major decisions or cuts” that will affect its people. Swaab's decisions to date impact the firm's equity partners only.
“This is not to suggest that other decisions or cuts impacting our people won’t be needed. We are assessing our position on a daily basis. The situation is very fluid. It is important to us that any decision is made based on data (to the extent possible). There are many considerations,” she said.
For the time being, discretionary spending has been frozen, and recruitment is on hold for Swaab, Ms Digiglio said.
“Our position is that, except for lateral partner hires or exceptional circumstances, we will not be hiring any new staff until the COVID-19 crisis is resolved and working patterns return to what we have known to be normal.”
Any decision about cuts to jobs or salaries, she mused, will be influenced by a range of factors, including the wellbeing of staff, which is “already being challenged in an unprecedented way”.
“Ensuring our people are relevant, included and kept busy is important for their wellbeing. We're conscious of this. These are challenging times for everyone – this keeps me awake at night,” Ms Digiglio concluded.