"Major Lindsey did a .. flash survey in November to account for the fact that law firms were 'faring far better than anyone expected.' Two-thirds of the 134 respondents said they did not expect their compensation to be cut ... About 43% of November respondents said their firm had fully reversed pay cuts, while 41% said their firm partially rolled back cuts." - Dylan Jackson, Law.com, December 22, 2020.
Initially, as COVID-19 became a reality, law partners feared compensation reductions.
For some, there were temporary ones, which usually were later restored, fully or partially. For others there was no hit.
Law.com provides the probable reasons for that financial stability.
One, law firms did course correction quickly. Cost-efficiency kicked in early. Yes, the law-firm niche had learned plenty from the ineffective moves during the Great Recession. Remember the knee-jerk reaction of all the layoffs.
Two, there was no reluctance to weed out unproductive partners. They were either not billing enough hours or not bringing in sufficient new business. That eased the pressure on overall pool of profits for partners.
Three, myriad law firms received PPP funds. Those were a lifeline in the worst of time.
And, four, there was a rapid recovery.
What will 2021 bring? There is speculation of "cleaning house" at all levels of lawyering. Simultaneously, the financial types are predicting an economic boom next year.
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