McGrigors cuts partner profits and staff salaries

McGrigors has announced a large-scale cost-cutting programme that will see partners taking a reduced share of the firm's profits, staff agreeing to unpaid leave, and a firmwide salary freeze.

The top Scots firm revealed today (8 May) that partners have agreed to take a 5% reduction in their annual base profit share, without receiving any additional leave to compensate for this.

The partners will take a 5% cut in their base annual compensation for the whole of the current financial year (1 October 2008 to 30 September 2009). The reduction will be taken from partners' drawings to be paid over the remainder of the current financial year and into the beginning of the next financial year. However, the 5% cut in compensation will not apply to payments relating to the 2009-10 financial year.

Outside of the partnership, the firm is asking all staff to take two weeks' unpaid leave at some point between June and the end of September - equating to a pay cut of around 5%. The firm is hoping that at least 85% will agree to the unpaid leave.

The firm has also frozen salaries for 2009 and is not planning to review remuneration again until October 2010. McGrigors said trainees will not be affected by the pay freeze and that the firm is not deferring training contract start dates, stating that it will meet its obligations to current and future trainees.

The firm is also making use of a flexi-working programme introduced in March that has so far seen the firm second 30 people to busier departments and offices.

McGrigors managing partner Richard Masters (pictured) said: "We sincerely regret having to implement these measures, but we think it is the right thing to do to protect jobs and the long-term health of our business. By taking a pragmatic approach and using the resource that we have where it is needed and saving costs where we can, we are maintaining resource at a level that allows us to react quickly to our clients' ever-changing needs.

"We have invested a lot in our people, we value them all and we will need them when the inevitable upturn comes. We hope that these measures will avoid the need for compulsory redundancies."

McGrigors' news comes six months after the firm overhauled its partnership and remuneration structure, which resulted in 10 partners being de-equitised.

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