Law firms
Hughes Hubbard fires lawyers and staff after receiving paycheck protection loan
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Hughes Hubbard & Reed laid off some associates and staff after receiving a paycheck protection loan from the federal government.
Law firm confirmed layoffs of “some lawyers and staff” in a statement above the law. The statement did not provide details.
Hughes Hubbard provided this statement to the ABA Journal: “We made a decision early in the pandemic to keep our entire team intact for as long as possible, in the hope of a quick economic recovery. We were one of more than 100 companies who decided at the start of the pandemic to ask for the [paycheck protection program] and have been approved on the basis of [Small Business Administration] Criteria. This money was used for its intended purpose, to save jobs at the height of the crisis.
“Now, more than three months after the start of the pandemic, the profound impact of court closures and a slowdown in business activity have given us a more informed idea of how the pandemic has changed the way we do business. Like other companies, we have made tough staffing decisions to cope with today’s environment. We regret the difficulties these steps cause as we and the industry evolve to cope with this changing environment. We are confident that the actions we take today will allow us to serve our customers, be competitive at the highest level and deploy our people effectively.
Hughes Hubbard isn’t the only law firm laying off employees despite obtaining a payroll protection loan.
Bremer Whyte Brown & O’Meara said above the law in April that 15% of its lawyers were put on leave or dismissed and 20% of staff were temporarily put on leave. Law360 reported that the company received a paycheck protection loan.
Schiff Hardin laid off a small number of staff after receiving a loan. This too reduce wages up to 50% for 6% of its lawyers and 15% salary for other lawyers and staff earning more than $ 100,000.
Law firms were eligible to participate in the Paycheck Protection Program if they had fewer than 500 employees, Law.com reports.
Other companies taking employment measures that are participating in the paycheque protection program includes:
• Curtis, Mallet-Prevost, Colt & Mosle, who would have cut salaries of associates by 25%.
• Day Pitney, who would have cut pay 15% for lawyers and staff and also reduce hours for some employees working from home.
• Ice cream maker, who put on leave “35 professionals and timekeepers” and reduce wages on a sliding scale for those who earn more than $ 50,000 per year.
• Kelley Drye & Warren, who reduce wages 10% for lawyers and other employees earning more than $ 100,000 per year.
• Pryor Cashman, who put on leave some associates.
• Smith, Gambrell & Russell, who reduce wages 10% for partners and other employees.
• Stroock & Stroock & Lavan, which reduce wages 15% for lawyers and staff, although salaries will not be reduced to less than $ 75,000.
• Sullivan and Worcester, who put on leave some employees and cut the salaries of associates and those earning more than $ 66,000 a year by 5%.
Paul Hastings associate Christopher Austin told Law.com that loan forgiveness is reduced when companies “made a bunch of layoffs.”
Companies will have to repay part of the money if their workforce is less than the number declared when the loan was granted. The initial headcount could be based on numbers from early 2019 or 2020, which allowed companies to pick the lower number.
Loan cancellation is also reduced if companies cut wages by more than 25% for people earning less than $ 100,000.
Updated July 8 at 9:38 a.m. to add Schiff Hardin to the list and include information from Law.com.
See also:
ABAJournal.com: “Many law firms that have applied for paycheck protection loans are still waiting; A Texan lawyer files a complaint “