Fatcat lawyers are getting £142,000-a-year pay rises while taxpayers pick up bill for furloughed workers and junior staff get laid off
- Top lawyers have come under fire for getting pay rises of up to £142,00 a year
- Some firms laid of junior staff on grounds of Covid, an investigation revealed
- All but three of 33 top firms using the furlough scheme saw a rise in revenue
Top lawyers have come under fire for pocketing pay rises of up to £142,000 a year while leaving taxpayers to pick up the bill for furloughed workers.
An investigation shows some of them also even laid off junior staff on grounds of Covid cost-cutting.
Leading firms have been warned they risk creating ‘law’s biggest embarrassment’ unless they hand back furlough cash to the Treasury.
Justice minister Shailesh Vara said last night: ‘The idea that very well-paid lawyers are making even more money from the taxpayer at a time of national crisis will do little to enhance their reputation. I congratulate law firms who have volunteered to self-fund their furlough scheme and hope the rest will follow their lead.’
Top lawyers are under fire for getting pay rises of up to £142,000 a year. Justice minister Shailesh Vara praised law firms who have volunteered to self-fund furlough schemes
All but three of the 33 top law firms using the furlough scheme to bankroll staff saw an increase in their revenue in 2019-20, according to The Lawyer magazine. The income of nine soared by 10 per cent.
And 34 ‘profit per equity partners’ (PEPs) at law firm Withers saw payouts ‘skyrocket by 39.6 per cent from £359,000 to £501,000’, the magazine said.
Withers, which handles divorce and tax disputes for the super rich, is said to have had 54 junior employees on taxpayer furlough.
Forty British-based lawyers at Freeths, which specialises in insurance, saw their profit payments go up to £484,000, a £24,000 rise. Yet it put 206 staff on furlough, according to The Lawyer.
Freeths recently held a redundancy consultation that put 80 positions at risk and resulted in 13 roles being cut, the magazine said.
Firm income reportedly rose by more than 10 per cent for the second consecutive year giving it revenue of £102million last year.
The article also focuses on Weightmans, which is said to have given its top 36 partners profit payments of £272,000 despite furloughing 326 employees at the peak of the crisis.
Seven of the top 50 law firms have furloughed more than 100 members of staff, according to The Lawyer.
Other firms where profit payments have risen while furloughing staff include Eversheds and DLA Piper, the world’s biggest legal company.
The magazine says Weightmans partners had their pay package reduced in spring ‘but the firm didn’t cancel its bonus pot and when revenues went up 6.3 per cent to £103.4million at the end of the [financial] year, it resumed profit distributions and ditched the 11 per cent salary cut it introduced earlier in the year’.
Forty lawyers at Freeths (pictured, London offices), saw their profit payments go up to £484,000, a £24,000 rise. Yet it put 206 staff on furlough, according to The Lawyer
It urges firms that have used the furlough scheme while increasing profit payments to spare the profession’s blushes by refunding the Treasury.
It notes that of the £35billion spent on furlough payments so far throughout the economy, only £215million has been reimbursed by companies which said they did not need it.
The magazine praised law firms such as Hogan Lovells and Travers Smith which agreed to foot the bill for furlough payments for their staff and urged others to follow suit.
A spokesman for Freeths said profit payments were based on the previous year’s revenue. The firm has not paid the final instalment generated by 2018/19 income and has deferred later PEP payments until 2021.
The spokesman said board members and partners have had pay cuts, and Freeths had made ‘limited redundancies to reflect the drop in workload’ since the pandemic and adjust to ‘current economic conditions rather than maintain staff on furlough’.
Withers and Weightmans declined to comment.
The Government’s initial furlough scheme finishes at the end of this month.
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