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In order to reduce expenses and avoid further layoffs, Fraser Milner staff and associates in Toronto will be required to take six days of unpaid leave during the remainder of 2009. In a memo obtained by Precedent, the firm’s Toronto managing partner Chris Pinnington announced a series of cost-cutting strategies in response to difficult economic times. “We are generally encouraged by our performance in the year to date and FMC remains strong as we continue to attract new clients and mandates. Even so, we still confront, like all Canadian businesses including our clients and competitors, a challenging and unpredictable economic environment.” The dates for the unpaid leave are announced in the memo and fall around long weekends and holidays — the idea being that clients require less attention during those times. The firm will remain open with a skeleton crew on those days and staff required to be in the office to meet client needs will not be paid; they will instead be given “equivalent unpaid time.” In addition to mandatory unpaid days for associates and staff, Pinnington also gave staff three voluntary options: shortened work weeks, early retirement, and leaves of absence. The firm has been conducting “town hall” meetings to address the questions and concerns of staff and associates. These are not the first cost-cutting steps that FMC has instituted. In late 2008, the firm confirmed layoffs of a small percentage of its staff, including 10 lawyers. The firm is hopeful that this new initiative will keep further layoffs at bay. As Pinnington explains in the memo, “All of these initiatives are designed to keep our dedicated team intact while managing our expenses and providing flexibility.” FMC is not the only firm watching their bottom line in these uncertain economic times. Precedent has recently reported on the surreptitious layoffs taking place in many Bay Street offices. Update June 12: Precedent spoke to FMC’s Toronto managing partner Christopher Pinnington. Here are the highlights from our conversation: Why have you taken these steps?
"There are two dimensions to this, which converge quite neatly: a clear desire for more work-life balance and the current economic environment. And that’s why we approached this as we did."
Why do all of this and do all of it now?
“As a matter of fairness to everyone, if we’re going to implement initiatives we need to do it comprehensively and with as much notice as possible and that’s another reason why these initiatives were rolled out at once … We will continue to monitor closely the direction of the economy and respond as we need to. This economy will turn around and we will respond accordingly.”
Were more layoffs another consideration?
“I think we learned in the past recession that too quick a response by way of layoffs creates significant demographic gaps in practice areas --- We’re trying to take the long-term view and manage on a collective basis and that includes asking absolutely everyone, to a modest extent, to carry the burden.”
The net effect of the unpaid leave days is a pay cut for your associates. How do you justify that?
“Our objective has always been, and will continue to be, that we will always recognize and reward contributions that meet or exceed expectations. We do that every year, particularly at the end of the year, both in setting bonuses and setting compensation for the year going forward." Is there anything else you want to add?
“The overarching principle in all of this is that our commitment to client service is always paramount. Our clients get our full and undivided attention and the resources they need when they need them … We never take clients for granted. Client service is the absolute priority."
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