11 May 2020

McCann FitzGerald and William Fry cut pay as Covid-19 reverses Brexit optimism in Ireland

A view of the Four Courts building

The neoclassical Four Courts building in Dublin is currently under renovation

Dr David Cowan reports on how the Irish legal profession is responding to coronavirus

Top Irish law firms McCann FitzGerald and William Fry are cutting pay for their lawyers as the Covid-19 pandemic hits the Irish legal sector. 

They are among a number of firms stressing their priority is to protect jobs by instituting pay cuts as opposed to making redundancies, an approach that was trailblazed by Norton Rose Fulbright’s EMEA arm on 2 April when it revived the flex scheme it operated in the wake of the financial crisis.

McCann FitzGerald has implemented a 20% reduction in working hours and salary for most of its staff for a four-month period — employees earning less than €38,000 will not be affected. Staff holiday entitlements are also protected. 

In a statement, the firm said the interim measures have been introduced to “protect all jobs” as it was experiencing a “significant contraction in demand for some services”.

William Fry has made remuneration cuts for its highest earners of up to 20% as part of its temporary cost-cutting measures. 

Discretionary costs, earnings cuts and the deferral of profit distributions will all be introduced on a scale up to 20% for those on the highest fixed-income bands.

Arthur Cox is not cutting pay at this time but will not hand out bonuses this year and is making significant reductions to partner distributions. 

The firm has also let go some support staff on fixed-term contracts and introduced a voluntary scheme for staff who wish to apply for career breaks, reduced working weeks or term-time work.

The measures bring to an abrupt end a period of optimism about the prospects of the Irish legal market in the wake of the UK’s exit from the EU that saw number of international firms open offices in Dublin, most recently Dentons, which unveiled its plans for an office in January.

Over the last three years, Clyde & Co, Simmons & Simmons, Lewis Silkin and Pinsent Masons have all moved into Dublin while record numbers of UK-qualified solicitors have joined the Roll of Solicitors as a means of gaining access to the EU market.

Crisis support launched

The bandaged, iconic Four Courts — home  of the Supreme Court, the Court of Appeal, the High Court and the Dublin Circuit Court — has been under covers for restoration work for a couple of years already, but now appears to be a metaphor for a legal market at a crossroads. 

To support firms, the Law Society of Ireland has launched a new service, Crisis Practice Support. It aims to deliver practical support to help solicitors remain operational during lockdown, which remains in place until 18 May before a phased unwinding of the measures. 

The society’s president, Michele O’Boyle, said: “Ensuring the continuity of solicitors’ essential services will directly help other small businesses through this difficult time.

“The legal services provided by the solicitors’ profession are necessary to support other essential services, as well as vulnerable people in the community. Although legal firms across the country are physically closed to the public to maintain social distancing, they remain open for business while respecting necessary restrictions.”

Remote Courts

While law firms might be temporarily in reverse, the court system moved forward with its plans to develop remote courts.

The project went live on 20 April when both the Supreme Court and the Court of Appeal heard cases using a video streaming app called PEXIP, which parties can join from other services, including Skype or Zoom.

Supreme Court Chief Justice Mr Justice Frank Clarke said: “Remote hearings will be suitable for some types of proceedings in the High Court and a limited number of cases in the District and Circuit Courts. The court presidents and the courts Service are exploring ways in which to increase the number of cases which can be dealt with in physical hearings.”

Further reading on the Covid-19 pandemic

After Covid-19, client tensions that pre-existed the pandemic will become intolerable — Law firms banking on a return to the old way of doing business once the immediate crisis is over are doomed, argues Rob Millard

Under lockdown socialising between international colleagues has increased — Colin Passmore outlines the measures Simmons & Simmons has been taking to promote staff wellbeing during the Covid-19 crisis

After Covid-19 lockdown will virtual arbitrations become the new normal? — Michela D'Avino and Bahaa Ezzelarab argue that remote arbitration hearings should be carefully considered as an option to avoid costly delays

A question of timing: the different responses of US and UK elite law firms to Covid-19 — Looming decisions over associate pay and bonuses are a factor in the timing of UK law firm Coronavirus measures

Above all, this crisis too will pass — Rob Millard foresees large law firm mergers and accelerated digitisation in the wake of Covid-19

'It is about being proactive and decisive' — Norton Rose Fulbright EMEA managing partner Peter Scott on the thinking behind the firm's flexible working scheme

General counsel braced for six-month shock to their businesses, survey finds — MoFo poll of 110 GCs finds them making unprecedented decisions as HR issues dominate

'Now is the time for law firms to deliver on their stated values' — Consultant Tony Williams advises law firm leaders to avoid knee jerk decisions and go into communication overdrive during the Covid-19 crisis

Unprecedented response to Covid-19 is 'testament to legal profession's resilience — Stewart Salwin is impressed by how quickly the Arizona courts have adapted to the coronavirus crisis

Staff welfare, supply chain and privacy: the coronavirus-related issues keeping GCs awake at night  — Linklaters, Baker McKenzie and Ropes & Gray have published the most sought-after briefings, according to Lexology

'I have realised how powerful technology now is': an Italian lawyer's take on Covid-19 — The lockdown is forcing Italians to embrace digitisation - and that even includes its public officials, writes Gabriella Geatti

Coronavirus risk may be unprecedented, but the fundamental principles of crisis response still apply — Crisis PR specialist Bethaney Durkin advises law firms impacted by the coronavirus to act quickly while avoiding a kneejerk response

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