Firms' Layoffs of Part-Timers Is Shortsighted, Orrick Partner Says

The thinning of BigLaw’s ranks and firms’ focus on profits for partner even during these times has been well-documented.

And the layoffs particularly impacted the ranks of minorities and women—hitting women in part by firms’ “reducing virtually anyone working on a part-time schedule” in their downsizing, Orrick, Herrington & Sutcliffe partner Patricia Gillette writes in the Am Law Daily.

According to the National Association of Women Lawyers’ fourth annual survey (PDF) on retention and promotion of women in law firms, 95 percent of firms made cuts, and almost two-thirds laid off one or more part-time employees. “In the typical firm, 100 percent of part-time lawyer terminations were women,” the survey says.

Gillette says that the notion that a part-time lawyer is less valuable is not rational, but an “extension of the stigma and negative stereotype that traditionally has characterized part-time programs in law firms—if you aren’t billing 2,000+ hours (sometimes regardless of the quality), you are not committed and, therefore, you are not valuable.”

Part-time lawyers, contract lawyers and other not on the partnership track can be a cost-effective way to get legal work done for clients, Gillette writes. She also emphasizes that a firm’s culture is forever changed by a layoff, and “the wholesale termination of these attorneys based solely on their status ignores the mindset of many lawyers who are entering the legal profession today” that “the promised partnership pie is simply an illusion or not a prize at all,” and sends many bright legal minds a message that they have no future in large firms.

Gillette suggested some cost-cutting alternatives to making layoffs. Among them:

• Don’t focus on profits per partner, “a meaningless numbers game.” Base decisions on the success of the firm and its clients.

• Hire fewer new associates and pay them less.

• Shift your law firm model to a focus on efficiency and competency rather than billable hours. “That may mean that a firm keeps an 80-percent associate whose work is stellar over a full-time associate who bills 2,500 hours at a less productive and lower qualitative level,” she writes.

Orrick abandoned lockstep in July and announced a new associate pay structure in December in which associates are divided into three tracks—partner-track, career attorneys and custom-track—and advance within these tracks based on meeting certain performance criteria rather than the amount of time they have been with the firm.

Orrick laid off 100 attorneys and 200 staffers a year ago and deferred the start date of its hires from the class of 2008 to this year and set start dates for its class of 2010 hires for January 2012.

Hat Tip: Wall Street Journal Law Blog.

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