Norton Rose Fulbright Cuts Australian Lawyer Pay as PwC Reduces Hours and Local Partner Drawdowns

Norton Rose Fulbright is reducing the hours and pay of most of its Australian staff by as much as 20% to match the lower volume of work required and cutting partner drawdowns.

The news comes as PwC Australia also reduces its partner drawdowns, with the Big Four firm yesterday saying most employees will work a four-day week, including those at PwC Law.

DLA Piper, meanwhile, joined the ranks of firms including Clayton Utz and Baker McKenzie in Australia in not cutting hours or salaries.

Norton Rose said is it is not immune from the business impacts of the COVID-19 pandemic and expects work in some practice area to reduce in the coming months.

The London-headquartered firm is adopting a system of ‘flex’ work in Australia, which will reduce individual staff hours by up to 20% depending on the work required, with a corresponding drop in remuneration.

The firm last week took similar steps at its offices in Europe, Asia and the Middle East.

“The ability for our staff to flex will ensure that we are able to retain as many roles as possible during this crisis. The underlying philosophy behind our proposal is a simple one – we are asking our people to face this situation together and, by acting as one, to come through this stronger,” managing partner in Australia Wayne Spanner and managing partner-elect Alison Deitz said in a combined statement.

“Our partners are very proud of the way our people have responded to remote working so far, with nearly 1000 staff transitioning quickly and seamlessly to working from home without any disruption to client service.”

The firm is also standing down the 2 to 3% of its workforce who are unable to perform their duties under work-from-home arrangements.

Additionally, recruitment and salary reviews have been paused and partner draws will be temporarily reduced. The firm declined to say by how much.

“We believe the comprehensive steps we are taking are an appropriate and prudent response, but of course none of us can predict exactly how long and how severe the COVID-19 crisis will be,” the firm leaders said. “Coupled with our strong foundation and continued dedication to assist clients in areas of great demand, we are confident our business will emerge from this crisis in a strong position and ready to embrace an improving economy.”

It is the latest firm in Australia to cut staff pay or partner drawdowns.

The 700 partners and 8,000 strong workforce at PwC Australia, including its legal arm, will mostly work a four day week from May 1 at the latest, with a corresponding reduction in remunerations.

Partner income draws have been reduced by 20%, commencing from March 1 this year and the firm expects partner incomes for the 2020-21 financial year will be reduced in the range of 30 to 40%, with no bonuses.

“We have made a commitment to our people to do everything we can to protect jobs and not make people redundant as a result of Covid-19,” CEO elect Tom Seymour said in a statement. “Whilst we cannot underestimate the significant impact this health crisis is having on the economy, it will pass, and when it does, we need our skilled workforce ready to go and able to support our clients as the economy powers back up.”

DLA Piper said the firm is closely monitoring the impact of COVID-19 on its business in Australia and there has so far been no material downturn in business, but expects this will come.

“We are managing our costs carefully and have taken steps like deferring non-essential projects, pursuing only business-essential recruitment, deferring salary increases and other costs, where possible,” the firm said in a statement. “We have not proposed cuts to staff, reduced working hours or reduced partner drawings.”