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Hannah Gannagé-Stewart

Deputy Editor, Solicitors Journal

Three quarters of UK firms furlough staff

Three quarters of UK firms furlough staff


Research published this week has revealed that more than three quarters (77%) of law firms have been forced to furlough staff

Research published this week has revealed that more than three quarters (77%) of law firms
have been forced to furlough staff after the UK went into lockdown to limit the spread
of covid-19 in late March.

More than half of the firms that said they had furloughed staff also said they intended
to furlough no more than 40% of their total workforce, and only a small proportion
(7%) indicated that they planned to furlough more than 80%.

Of the 200 surveyed, 78% said they had either already reduced partner drawings (42%)
or were considering doing so (36%).

The survey of 200 firms was conducted in April by accountancy firm Safery Champness
with The Institute of Legal Finance & Management.
The majority (63%) of firms had not yet introduced a cut to pay. Of the firms that had,
most had made only moderate reductions of no more than 20%. Only 6% had started
redundancy negotiations with their staff members.

Most firms said they had not yet rescinded job offers. Of the 65% of firms that have
recently made job offers, 77% of have chosen not to withdraw them.

However, of the firms which had planned for promotions or pay rises to come into effect
in April, the majority (53%) of them had cancelled or deferred those plans.

Only 28% of firms that had capital expenditure plans in place for the coming year
indicated that they would be seeing those plans through, with a majority choosing to defer

The survey also revealed that Just under half (47%) of the respondents were predicting a
fee reduction of greater than 25% against original predictions for the financial year, while
only approximately 5% were expecting little or no impact on fee income.

Safery Champness director Ian Johnson said: “There is a real risk that without taking
swift precautionary steps that some firms may experience significant financial distress. Yet,
many firms also appear to be keeping one eye on the horizon, looking to ensure their long-
term position and competitiveness post-Coronavirus. In the immediate term though,
firms understandably are focused on business resilience, the welfare of their staff and
preserving client relationships”.

Johnson said Safery Champness would continue to update its data as the situation unfolds.