Some attorneys will work a four-day week and earn 85% of their normal pay.
The firm is also offering sabbaticals, or extended time off at 30% salary. Salaries have been frozen until 2010.
Addleshaw Goddard has also announced is is keeping on only 75% of its incoming associates, or 33 new lawyers.
Addleshaw Goddard LLP is a UK law firm, with almost 750 lawyers and 1,350 staff, based in Leeds, London and Manchester. It was formed in 2003 by the merger of Addleshaw Booth & Co with Theodore Goddard.