TSMP Law Corporation joint managing partner Stefanie Yuen Thio commented in a Business Times article published on 11 August 2020 on law firms cutting pay due to the economic downturn.
She shared that TSMP’s partners would be taking a 25 per cent cut to “stand in solidarity” with clients. While the firm has not implemented any pay cuts firm-wide since then, it will be adjusting starting pay for newly qualified lawyers down by 8 per cent, for those getting called in August.
“If the situation worsens, however, the firm could take further action to restructure all our lawyers’ pay,” she told BT.
“We would try to make this a temporary cut, however, with an intention to reinstate pay levels in a year or two. The work will come back. Law firms just need to survive the cash flow crunch until that happens. That’s why we decided to do an early pay cut for the partners to manage our cash flow more prudently.”
She said that during past economic downturns, the legal sector saw hiring slow and pay increments moderated. Because the economic pain tended to be concentrated in certain geographical areas, lawyers could also find jobs in countries that were less impacted.
But Covid-19 has dealt a different hand.
“The virus has been agnostic about political leanings and geography, and with most business sectors badly affected, the law firms that support them have started to feel the pinch,” she said.