Knights board members and staff earning more than £30,000 face pay cuts of at least 10% and some staff will be made redundant, while Ince has followed Gateley in slashing its interim dividend due to the impact of coronavirus.
The listed law firms today (26 March) provided trading updates to the London Stock Exchange, citing increased economic uncertainty brought by the Covid-19 pandemic and responding with measures ranging from pay cuts and redundancies to dividend cancellations and warnings around collecting fees.
Knights struck a relatively bullish tone in terms of the limited impact the firm says it has seen on its revenue and cash flows to date, but nevertheless introduced a raft of cost saving measures given the uncertain outlook.
These include reducing board members’ salaries by 30% and the salaries of staff earning £30,000 or more by 10% from 1 April, taking a ‘more prudent approach to resourcing’ that will involve some redundancies, halting non-essential capital expenditure and eliminating all discretionary spend, including marketing. The firm is in consultation on potential redundancies and declined to comment on how many staff could be affected.
Knights chief executive David Beech commented: ‘While we have traded in line with market expectations to date, we have decided to take a number of precautionary measures in response to the anticipated economic impact from the spread of the virus, to ensure maximum flexibility to respond to the changing market environment. The business is in a strong financial position and I am confident that the group’s strategy, supported by a talented team, will see Knights emerge from the near-term uncertainties in a strong position.’
Meanwhile, fellow listed firm Ince – formerly known as Gordon Dadds – has cancelled its interim dividend of 2p a share, worth around £1.4m, after the board concluded it was no longer confident of delivering results in line with expectations for both the six months and year to 31 March 2020. The board also cited the inevitable impact on cash flows and uncertainty around the collection of fees as a result of the pandemic.
Chief executive Adrian Biles commented: ‘These are unprecedented and challenging times and the welfare of our clients, staff and partners is paramount. We are doing everything we can to ensure that when the pandemic eases we will be well placed to move forward with our growth strategy. The underlying business of the group is robust and will survive the current turbulence.’