Stealth Layoffs: That Gentle Nudge to the Door

As some law firms respond to the nation's economic meltdown by downsizing and/or publicly laying off excess attorneys, other do so quietly, with a gentle nudge to the door, as far as lesser-performing lawyers or those in struggling practice areas are concerned.

Either by attrition or by encouraging attorneys to leave, a number of firms have removed lawyers this year without having to use the dreaded L-word, reports the Daily Business Review in an article reprinted by New York Lawyer (reg. req.).

Questions have been raised about whether such so-called stealth layoffs have occurred by a recent reduction in the attorney roster at Holland & Knight, which was down by 47 lawyers at the end of September from an earlier count of 1,141, according to the article. Meanwhile, "sources say Akerman Senterfitt let go of three Miami attorneys, at least one of whom was in the real estate department, and five staffers in recent weeks."

However, the management at Akerman Senterfitt says there have have been no layoffs over economic conditions, and H&K managing partner Steven Sonberg calls the firm's current headcount of 1,130 "virtually the same" as before.

Last month, the chairman of Dechert confirmed some performance-related firings, but denounced as "bull" rumors of 80 additional associate layoffs after the apparently economically related news earlier this year that 13 real estate and finance attorneys were being let go.

"In my view, layoffs are when you decide to cut head count," chairman Barton Winokur told the Legal Intelligencer last month. "It's not when you decide to replace people with better people."

Legal bloggers, however, have expressed skepticism about such explanations.

"A Dechert spokesperson says the rumors are garbage and that the firm is doing 'performance reviews' and acting on them. In October? In the midst of a financial industry meltdown? In the face of layoffs and office closings at other firms? Not likely," writes End of Esq. in an Oct. 22 post. "It seems to us that the spokesperson is on spin cycle and that associates are being displaced."

Related ABAJournal.com coverage:

Law Firms Should Disclose Attrition Data, Student Leader Says

"Despite Stealth Layoffs, Most BigLaw Attorneys are Hanging Onto Their Jobs"

"As Financial Crisis Continues, BigLaw Attorneys Seek Foreign Jobs"

"Law Firms Learn the Hard Way that Layoff News is Likely to Leak"