Layoffs
January’s Carnage: 1,487 Law Layoffs
Posted Jan 29, 2009 2:15 PM CST
By Martha Neil
So far, it hasn't been a happy new year for many lawyers working at well-known law firms throughout the country.
As 2009 began, so did news of a growing tsunami of attorney layoffs being made at many BigLaw firms—not to mention London's magic circle, in-house legal departments and midsize law partnerships.
The latest wave followed hundreds of lawyer layoffs announced last year, but the pace of the attorney axings seems to be picking up: It appears that at least 500 attorneys have been let go by major legal employers this month, according to news reports, and additional layoffs may have been made without attracting media attention.
This afternoon, the Law Shucks blog listed a total of 1,381 layoffs reportedly being pursued by law firms based in the U.S. and abroad during January, in a chart on its Layoff Tracker page. (This figure included both attorneys and staff.) By the end of the day, the layoffs total had been increased to 1,487, after Ropes & Gray announced that it is letting 106 staff members go.
"More firms are in a fragile condition than I've ever seen," legal consultant William Brennan of Altman Weil Inc. recently told the Wall Street Journal (sub. req.).
However, law firms making layoffs likely will be on a stronger financial footing as a result, and in layoff announcements they routinely say their financial condition is strong. Those at risk appear to be not law firms making layoffs but, as discussed in the newspaper article and an earlier ABAJournal.com post, law firms like the dissolving Heller Ehrman that lose a critical mass of partners who voluntarily depart for jobs elsewhere.
As several articles about lawyer layoffs also note, a number of law firms are naming new partners and hiring laterally, even as they ax attorneys in slow practice areas. The financial well-being of the firms that fired them, though, may be of little consolation to laid-off lawyers, as the Above the Law blog has frequently pointed out in its posts.
Among those on the ever-lengthening layoffs list are Cadwalader Wickersham & Taft (9 associates); Choate Hall & Stewart (15 lawyers and 23 staff); Clifford Chance (up to 80 London associates); Cooley Godward Kronish (52 attorneys and 62 staff); Foley Hoag (a total of 32 associates and staff); Kirkland & Ellis (about 15 lawyers, according to legal recruiters); Linklaters (at least 100 lawyers and 130 staff); Merrill Lynch (6 senior in-house counsel); Morrison & Foerster (53 attorneys and 148 staff); Parker Poe Adams & Bernstein (13 lawyers and 15 staff); Skadden Arps Slate Meagher & Flom (an unspecified number of staff attorneys apparently amounting to nearly half of the staff attorney group); Wildman Harrold Allen & Dixon (approximately 10 attorneys); and Wilson Sonsini Goodrich & Rosati (45 lawyers and 68 staff).
Other law firms have announced staff cuts, but have avoided lawyer layoffs, at least for now.
Related ABAJournal.com coverage:
Silver Lining in Law Firm Layoffs News: Many Partnerships are Better-Managed
Legal Services Industry Lost 7,000 Jobs Last Year
‘Accidental Laterals’ Spur Record Number of BigLaw Partner Moves
Updated at 7:45 p.m. to include latest layoffs total and link to ABAJournal.com post on Ropes & Gray.
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- Five Questions for Law Firms Abandoning Lockstep Compensation
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- Skadden Jumps on the Bonus Bandwagon
- ABA Executive Director Resigns
- Nasty Attitude to Co-Worker, Naughty Word in E-Mail Cost 2 Their Jobs
Should Supreme Court Justices Be Able to Review News Accounts Before Publication?
Comments
Allen Sheketovits
Jan 29, 2009 2:49 PM CST
This is NOT good news.
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B. McLeod
Jan 29, 2009 3:40 PM CST
Except for clients that like lower fees (for whom, it probably is good news).
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Timt
Jan 29, 2009 4:19 PM CST
Thankfully no one has lost their job under Obama presidency. Good thing we got rid of george bush.
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B. McLeod
Jan 29, 2009 7:00 PM CST
Although most of these layoffs indeed occurred under the Bush presidency, those in the last few days did not (although they were due to Bush policies). While I entertain some (probably vain) hope that President Obama may be able to think of something creative, I really believe we were already too close to disaster by 20 January for anyone to successfully steer away. Expect consistently bad economic news for at least the next year.
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greg
Jan 30, 2009 6:55 AM CST
Carnage? 1,300 layoffs is ‘carnage’? And what, exactly, do you call the layoffs at Sprint, Caterpiller, Home Depot and Circuit City, all of which involve a lot more than 1,300 people?
Get a grip. Illinois alone has nearly 90,000 lawyers. California has over 200,000. 1,300 is a drop in the bucket.
Of course, if your professional life revolves around working for BigLaw (as the ABA apparently believes), then I guess this is BigNews. But there are plenty of jobs out there. You just need to adjust expectations, and pay expectations especially. Too many people expect to earn $160K. Those jobs are few, and not for everyone.
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Beverly McGrath
Jan 30, 2009 6:55 AM CST
As a newly admitted attorney, Feb. 07 working in litigation - p.i. and med. mal. - I would like some information on which practice areas our growing while I can still easily make a course correction.
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Larry
Jan 30, 2009 7:20 AM CST
1,487 lawyers is a drop in the bucket when you consider the number of lawyers out there.
I know of lots of firms with under 50 lawyers who are hiring and super busy. Big Law is dying which is the real news. I don’t know a single lawyer at a small firm that has been laid off.
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Dan
Jan 30, 2009 7:30 AM CST
Maybe some of those laid off would like to take some of this mountain of work off my desk…
... that is, if they can lower themselves to working for a 50-attorney firm…
We’re hiring. Many small-mid firms in our market are. I agree with #7, the real news is that clients are waking up to the fact that they are paying for those lavish BigLaw perks.
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The Wonder Pets
Jan 30, 2009 7:50 AM CST
B. McLeod: could you please elaborate with specificity on what “Bush policies” caused all these layoffs. I didn’t know a “policy” could do that. Are you talking about Executive Orders Bush issued?
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Susan
Jan 30, 2009 8:01 AM CST
This IS bad news to those of us who have been laid off in the past few months. It’s a sign that firms are not hiring, making the job search even more difficult.
I am extremely flexible, willing to work in the private sector, government, or non-profit. I am not guided by salary alone. I’d like to know where there are “plenty” of jobs, because it’s certainly not where I live.
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B. McLeod
Jan 30, 2009 8:05 AM CST
Sponsorship of two unneccessary wars, tax cuts combined with uncontrolled spending, and a resulting massive debt load not payable in our lifetimes. Basically, I only fault two Bush policies: his foreign policy and his domestic policy.
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Steve
Jan 30, 2009 8:19 AM CST
7 and 8 are correct. I work for a smaller firm (under a 100) and I am swamped. We also have ads out for people with 3-5 years experience. No downturn for us. 2008 was my highest billable year and January will probally be my busiest month ever. In addition to our regular new clients, we are bringing on a lot of Big Law day to day work that they used to do.
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Woah, buddy
Jan 30, 2009 8:23 AM CST
McLeod, I’m no fan of Bush either, but if you do your homework you will find that our current economic crisis was brought about also by policies put in place under the administrations of Bush, Senior, as well as Clinton. You are retroactively giving G.W. far more credit than he deserves… Actually, you are giving him far more credit than any president deserves… Don’t forget, we’ve got Congress making laws, too…
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tim
Jan 30, 2009 8:24 AM CST
Susan,
In addition to recruiters, we have ads in various local bar and state bar journals. Just google X state bar association and pull their ads. There are jobs for those with experience.
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Mike
Jan 30, 2009 8:33 AM CST
Beverly . . . for so long as you confuse the word “our” with “are”, my guess is there are no growth areas that will be open to you.
As for the cause of recent layoffs and the economic decline in general, it’s called the market. When you have politicians that force lenders to make loans to borrowers who are no where near qualified in the name of “equality”, you artificially inflate house prices and creath paper-wealth. Continuing to pump money into that same market in a vain attempt to prop up those inflated prices will simply result in a greater fall in the future.
While it is sad for a family when they lose their house through foreclosure or otherwise, it also presents an opportunity for another family to purchase that same house at a more reasonable price—one that they can afford.
That same paper-wealth is largely to blame for the unprecedented run-up in associate salaries—and now the resulting decline in associate ranks. No matter how smart the politician, at some point, the market will correct. As Lady Thatcher said, “The problem with socialism is that eventually you run out of other people’s money.”
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The Wonder Pets
Jan 30, 2009 8:44 AM CST
B. McLeod: the last thing I want to do is turn this into a pointless political argument. But, as #13 so correctly pointed out, you seem to turn a blind eye to Congress. Democratic House and Senate members all joined in on the fun in the Bush administration. Try to remember there are 3 branches of government, and the roles they play. Try not to be so selective in your criticism of government, because there’s enough blame to go around to everyone in DC, regardless of party.
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Kim K
Jan 30, 2009 8:53 AM CST
I disagree with preivous posts stating that this is a “drop in the bucket.” 1,400 lawyer layoffs in JANUARY alone is significant. I recently read that 7,800 had been laid off in the months leading up to January. Combined, that’s a significant number of lawyer layoffs and not all of them at Big Law either.
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Breaker
Jan 30, 2009 9:06 AM CST
Not to pile on B. McLeod, but if your criticism of Bush includes uncontrolled spending and massive debt, then what say you of $800-$900 billion in spending that Congress is about to approve at Obama’s request? (The House approved in one hour more debt than it cost to fund those"unnecessary wars” in the seven year since 9/11). I guess if it’s Obama, it’s ok. By the way, how does all this relate to a few overpaid lawyers having to find work? Does anybody out there think that in addition to having to cut costs, these bloated firms might also be getting rid of some lawyers whom they’ve determined aren’t pulling their weight?
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B. McLeod
Jan 30, 2009 9:22 AM CST
Breaker, thank you for pointing that out. In my opinion, the Obama spending plan is just a variation of the same play Bush ran (which then-Senator Obama supported), and will not work. An economic correction of the magnitude now facing our country is akin to a force of nature, which cannot be turned aside. I believe the trillions in debt are root causes of our problems, and that we indeed cannot get to a solution by pouring more red ink behind the failing dam.
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P
Jan 30, 2009 9:33 AM CST
SUPER!
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B. McLeod
Jan 30, 2009 10:32 AM CST
Also, @ 13 and 15, please note that, if you had read the entire chain of posts, you would have seen that my policy comment began with a correction of the incorrect suggestion @ 3, to the effect that nobody had lost their job under the Obama Presidency. It was only fair to temper that correction with concurrent recognition that those layoffs which have occurred in the last ten days (“under the Obama Presidency”) must be carry-overs from prior policies, simply because the current administration has not yet passed any economic measures.
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Bob
Jan 30, 2009 10:58 AM CST
There are other big firms making layoffs that aren’t even mentioned (e.g., Andrews Kurth, Pillsbury Winthrop, etc.), so the number of attorney layoffs is likely much higher than the story describes.
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B. McLeod
Jan 30, 2009 11:15 AM CST
True. Also many less visible, smaller firms have cut staff, and not all firms making cuts acknowledge that they are layoffs. So, I think you could reasonably say that the real number is certainly much higher than the 1,487 number under discussion.
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Stone
Jan 30, 2009 11:16 AM CST
The failed model is blowing up. We’ve seen it coming, it started before the economic crash, and now it’s being accelerated.
The model broke, it needs to be reinvented. A lot of things need to change, the profession needs a middle class.
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Jason
Jan 30, 2009 11:19 AM CST
The model is NOT broke. The partners at Big Law got to greedy and tried to expand to fast, to many lawyers, to many new officers, to expensive of digs, to large of bonus, etc. and now don’t have the cash flow to make up for it.
They gambled and lost. A lot of Big Law that we know today will go under or merge by the end of 2009 but in 1-2 years from now Big Law will be just as strong.
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Bruuce80
Jan 30, 2009 12:28 PM CST
...7 & 8 are right on target. I am a partner at a small firm and we have been very busy…Big Law is dying out…the everyday small firm lawyer is still working.
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Jan Grossman
Jan 30, 2009 12:55 PM CST
Excuse me Jason @24, but the word is “too”.
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The Litigator
Jan 30, 2009 1:27 PM CST
There are more lawyers losing their jobs than are being reported. However, it is a carnage regardless of whether you think it’s a drop in the bucket or not. When one person loses their job, it is disastrous for the person, it is a carnage for the person’s family who now wonders how the mortgage is going to be paid, how the car notes are going to be paid, how the student loans are going to be paid, how the kids are going to fed etc.
Comments condemning big firms and its lawyers sounds like envious critism rather than constructive, reasonable comments. Why condemn someone who works in a big firm? Why should they apologize for being hired there? Why should they apologize for their salaries?
Even though, I work in a relatively small law firm, but I do not hold any envious sentiments against big law firms and their attorneys. My joy is in the fact that I get a chance to trash them with their arrogance, if any, in the court room.
As for No. 6. if you are doing PI litigation, whether for Plaintiff or defense, you need not worry because there will always be car accidents, product malfunction etc. Moreover, this is the boom time for this area of practice, bad economic climate begats more claims, which begats more work for PI attorneys on both sides.
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Carol Treasure
Jan 30, 2009 1:43 PM CST
Is the failure of the large firms (i.e. Heller, Thelan) and the layoffs simply because equity partners making over 500K simply refuse to redistribute the wealth/profits to others in order to keep the firm afloat? Is greed to blame? Surely there must have been creative solutions floated, such as tightening the belt at the top in order to prevent the whole ship from sinking. Perhaps the idea of redistribution is too socialist a concept, but look at the cost. Do we really need to pay the top dogs that much when the 2 million dollar house with the saab and bmw already parked in the driveway are already fully paid off?
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Jason
Jan 30, 2009 2:21 PM CST
I work at a small firm. I make $10k less than Big Law lawyers who I went to school with here in my city. I am not envious of Big Law. My firm pays well and we work hard. We are not hurting for clients.
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R
Jan 30, 2009 2:22 PM CST
Response to Beverly McGrath:
“As a newly admitted attorney, Feb. 07 working in litigation - p.i. and med. mal. - I would like some information on which practice areas [are] growing while I can still easily make a course correction.”
Bankruptcy law.
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Andres
Jan 30, 2009 6:06 PM CST
I have an interview on Monday for a law clerk position. Look at this headline, I will be competing with these folks for jobs…
DRE
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the bigpoodle
Jan 31, 2009 2:52 PM CST
I’m suprised that in all of the stories and comments, no one has suggested that all concerned take a little less recompence in order to keep as many as possible on the payroll - nobody seems to be willing to take a cut during hard times even if it means people, your partners and employees lose their jobs. That just doesn’t seem right.
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B. McLeod
Jan 31, 2009 6:33 PM CST
That’s how it is, bigpoodle. Abstract concepts of right and wrong have nothing to do with it.
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nurse and attorney
Feb 1, 2009 7:18 PM CST
I agree with #5. Carnage is hardly the appropriate word for 1,500 law lay offs. I am busy working 6-7 days a week on cases.
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Brian
Feb 4, 2009 3:24 PM CST
Hi #35, you may consider it to be carnage when you and #5 lose your jobs (hypothetically speaking of course).
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