Legal eagle HopgoodGanim salaries take hit as firm cuts costs to survive coronavirus ‘storm’

One of Brisbane’s top law firms is feeling the heat from the coronavirus pandemic with savage salary cuts announced for most staff and some partners accepting a halving of their income.

ONE of Brisbane’s top law firms has announced savage salary cuts, with some partners accepting a halving of their income, as coronavirus hits legal fees.

HopgoodGanim, which has 41 partners and more than 280 staff working out of Brisbane and Perth offices, will cut the salary of staff earning more $65,000 by 20 per cent from next month for a period of six months. Equity partners will also take a 20 per cent cut following an earlier announced 30 per cent reduction in their income.

In a letter to staff, HopgoodGanim managing partner Bruce Humphrys said 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,” said Mr Humphrys. “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.”

Bruce Humphrys

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 Job Keeper 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.

He said that while partners would continue to work normal hours, other staff would have their hours reduced in line with the salary reductions.

In an official media statement, the firm confirmed the “decision to implement temporary salary reductions across the firm with a commensurate reduction in working hours.”

The reductions would be in place for up to six months from the beginning of May and equate to an annualised salary reduction of 3 per cent this financial year and 6.5 per cent next financial year. “This measure is about preserving the jobs of our people in these unprecedented times while also ensuring we continue to provide exceptional client service and outcomes to our clients,” the firm said.

It added there was no financial crisis affecting the firm at present and “our aim is to avoid one.”

“In the few hours since this measure was announced, we’ve had an overwhelming response to our request and our people are very supportive of the approach we’re taking,” the firm said.

“If circumstances prove these reductions were unnecessary they will be reversed at the earliest opportunity. Until then, like our peers and many other very successful and prudently-managed organisations, we will continue to anticipate realistic possibilities, and hope for the best outcomes, projected by Australia’s economic and scientific experts.”