O’Melveny Says Cost-Cutting Drove Staff Cuts, but Not Associate Ousters

A review of costs at O’Melveny & Myers this year has resulted in staff layoffs, but ousted associates were fired for performance rather than cost-saving reasons, according to a firm spokeswoman.

The blog Above the Law has reported that five Los Angeles associates left the law firm this week. O’Melveny spokeswoman Sonja Steptoe told the National Law Journal that it would be wrong to characterize the move as a layoff.

“There have been no economic layoffs of associates at O’Melveny & Myers, and there are no plans to conduct such layoffs,” she said in a statement. “We are in the midst of our annual associate evaluation process, which began as scheduled in September, and some associates, as is always the case, are receiving less-than-satisfactory performance reviews. … Our lawyer headcount has not declined year over year.”

She did say the firm has laid off staff, but did not say how many were let go. “With respect to staff,” she said in the statement, “we have prudently been reviewing and reducing our cost structure for the past eight months, following two years in which our expenses have grown faster than our income. During this period we have reduced operating expenses, including staff.”

She said staff was cut because of “technology-driven efficiencies,” and staff-lawyer ratios now reflect competitive norms.

The National Law Journal story says profits per partner at the law firm have remained at an average of about $1.6 million in 2006 and 2007.

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