Signs you’re in a failing firm? Asking for a friend. He works at a firm that just cut two attorneys and three staff and imposed major across the board salary cuts as soon as Covid hit. All bonuses on hold. No end date provided. Firm ostensibly successful for many years prior.

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Definitely hard times. Cost cutting measures like that make sure the equity partners are bringing home what they need to pay their bills. Not fair for the associates but that’s how it works until you bring in the business by yourself.

Hard to say whether it’s a “failing” firm or not - they are just impacted by the pandemic. Wouldn’t necessarily mean they have a bad reputation and that business won’t pick back up with the economy.

Just because a firm is being conservative does not mean it’s failing. Our firm is holding its own, but we are being cautious - number one priority is to avoid having to lay a single member of our team off. As a shareholder we have put bonuses on hold for everyone across the board, even shareholders, to ensure the firm is successful as a whole, not just an individual. Attorneys all voluntarily cut their draws by 20%, which have now been restored in full with business back to normal. We have not laid anyone off and everyone will get their bonuses year end (we usually distribute quarterly up to 75% productivity). We are transparent with all staff and they are aware of why we are doing. As a shareholder of a C Corp, I will also contribute towards the $400,000 that gets loaned back to the firm from YE shareholder distributions to make sure we have a cushion to start the year out.

Right. But in my post, people WERE laid off and NOTHING has been restored even though business is back to near normal. Attorney draws were drastically cut involuntarily without notice. I appreciate your story. Your firm sounds like a tremendous place to work. But while yours sounds conservative, this one sounds like it’s in trouble.

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