Dorsey Law Firm Restores Full Pay for Employees

Dorsey Law Firm Restores Full Pay for Employees

Demand for its legal services has rebounded strongly since the coronavirus hit the United States in March.

Dorsey & Whitney, a prominent Minneapolis-based law firm, is experiencing a rapid recovery from the economic effects of the coronavirus.

The law firm, which is more than a century-old, implemented pay cuts in June in response to the economic upheaval caused by widespread lockdowns of businesses. Non-equity-partner attorneys saw annual cuts of 10 to 20 percent in their base pay. Staff making $150,000 or more saw similar cuts.

Dorsey’s leadership announced this week that those reductions are being lifted.

“The Firm has determined that the relatively strong demand for our legal services, together with the effect of cost-cutting measures in the face of the pandemic, allows us to restore full base pay sooner than originally anticipated,” Bill Stoeri, Dorsey’s managing partner, said in a written statement.

“There is a long way to go in managing through these unprecedented times, but it was our stated intention to restore pay reductions if the economics made it feasible,” Stoeri said. “We are fortunate to be in a position to do that.”

In 2018, Dorsey was ranked among the 100 largest law firms in the nation, with gross revenue of $368 million and 508 lawyers. Many big U.S. law firms cut compensation and jobs in the early weeks of the pandemic. But as business clients adapted their operations, demand for legal work resumed.

Large law firms, like Dorsey, are not among the economic casualties of the pandemic downturn. The Wall Street Journal reported in early October that many large firms are excelling financially and restoring salary levels they cut in the spring when the economy was being shocked by Covid-19.

“Firm leaders and consultants attribute the stability to lawyers’ ability to easily work from home, business that comes from a range of industries and practice areas, and a major reduction in travel expenses,” according to the Wall Street Journal story.

Dorsey’s attorneys are based in several cities across the United States and internationally. The vast majority of them are still working remotely. Dorsey’s headquarters is in downtown Minneapolis, where many offices in several business sectors are empty or sparsely populated.

There is some activity in Dorsey’s offices on Sixth Street. “Since mid-July, we have increased our number of people coming into the office for a business need,” said Jeri Longtin-Kloss, a Dorsey spokeswoman. “We now have approximately 30 to 40 people coming into the office on a given day for either a short visit to a half-day or a full-day.”

Before announcing the positive financial news this week, Dorsey instituted two cost-cutting waves in the spring. In April, it furloughed less than 4 percent of its workforce that was unable to work remotely. It also reduced the employer contribution to its 401(k) plan, and capped “monthly equity partner distributions.” By May, Dorsey leaders moved to reduce pay and lay off some staff. Law firm associates saw an effective annual pay cut of 5 percent, unless they met certain billable hour milestones.

Ultimately, Dorsey’s pay cuts were in effect for four months. “At this time, all attorneys and staff with pay reductions have been restored to their prior salary levels going forward,” Dorsey said in a Friday statement.

While Dorsey’s attorneys and staff made financial sacrifices, they might see a retroactive benefit on the horizon. “As financial results for the entire year continue to become more clear, the firm will consider paying previously reduced salary, in whole or in part, to all attorneys and staff affected by reductions,” the law firm said in its statement.