An Australian law firm has requested staff earning above $65,000 per year to accept a 20 per cent salary reduction and proportionately reduce working hours for a period of six months.
HopgoodGanim Lawyers, which has 41 partners and more than 280 staff working out of its Brisbane and Perth offices, will cut the salary of staff earning more than $65,000 by 20 per cent from 1 May to 31 October 2020.
The reductions equate to an annualised salary reduction of 3 per cent this financial year and 6.5 per cent next financial year.
HopgoodGanim managing partner Bruce Humphrys said in a letter to staff that the pay cuts were necessary to retain jobs and allow the firm to ride out the “storm” caused by the pandemic.
“I understand that the news will be difficult for many to absorb,” Mr Humphrys said.
“I am asking everyone at the firm to invest in our collective futures. While we cannot predict what the future holds nor how long the economic impacts of COVID-19 will last, preserving jobs remains the clear objective of the partners.”
He said the firm’s financial modelling had shown that if the shutdown lasted more than six months it was not likely to reach a level of fees and collections that were sustainable for any period of time without making significant changes to its cost structure.
“It is imperative that we focus further on cash flow,” he said, adding the firm was currently applying to the Federal Government’s JobKeeper program.
“Nobody really knows how long this virtual shutdown of the country will last, what long term damage it will do to the economy and how long that damage will need to be worked through,” Mr Humphrys said.
