Amidst Layoffs, Some Law Firms Prosper
Updated: Although some law firms are suffering as a result of the current turmoil in the U.S. economy, others are doing fine. One secret to their success: avoiding hot practice areas that now are not.
Buchanan Ingersoll & Rooney’s bankruptcy practice, for instance, wasn’t cut when the economy boomed and won’t be ramped up substantially now that companies’ financial woes are increasing work in the area, reports the Legal Intelligencer, in an article that is reprinted in New York Lawyer (reg. req.).
“Our firm has strategically avoided high ups and high downs—spikes—as a result of which perhaps we haven’t achieved record highs, but we also don’t suffer record lows,” says Howard Scher, co-managing shareholder of the firm’s Philadelphia office.
At Kirkpatrick & Lockhart Preston Gates Ellis, Chairman Peter Kalis predicts “a super year” because of his firm’s carefully coordinated balance of practice groups that are intended to complement each other regardless of economic conditions. The firm’s traditional practice of representing strategic buyers, rather than private equity shops, for example, meant less work during the recent boom but more work now that the economy has slowed significantly, he tells the Legal Intelligencer.
Also doing well in the current economy is alternative law firm Axiom Legal, which keeps its overhead low while providing skilled attorneys to work on-site among in-house lawyers in corporate counsel offices, as discussed in a recent ABA Journal article. As corporate clients focus on controlling costs, many are turning to Axiom to get the lawyers they need at the right price, Mehul Patel told ABAJournal.com via an e-mail from a public relations firm. He is executive vice president and general manager of Axiom’s San Francisco office.
“Our model—which emphasizes sophisticated lawyering and service without the immense overhead that traditional law firms carry—is proving to be an increasingly attractive alternative for many of the nation’s largest companies,” he said. “Axiom is projecting revenue growth in the 50 percent to 60 percent range for 2008, or $65 million, with aggressive projections for the next five years.”
Dechert confirmed last week that it planned to lay off 13 associates in its finance and real estate practice group, and as discussed in earlier ABAJournal.com posts, it is not the first—or in all likelihood, the last—law firm to do so.
However, at Clifford Chance, which laid off a handful of associates last year, another good year is expected by Mark Stewart, managing partner for London finance for the U.K.-based international megafirm, reports the London Times. Although a slowdown from last year’s banner profits is expected, due to the economy, “Stewart is confident that Clifford Chance will benefit from a flight to quality as the market contracts,” the newspaper writes.
ABAJournal.com: “More Law Firms May Be Considering Layoffs”
ABAJournal.com: “Law Firms: Layoffs a Possibility”
ABAJournal.com: “Laid-Off Cadwalader Lawyers Got Little Notice, But Months of Severance Pay”
ABAJournal.com: “Home Depot Lays Off an Estimated 17 In-House Legal Staff”
ABAJournal.com: “Thacher Proffitt Warns of Associate Layoffs”
ABAJournal.com: “Clifford Chance: Laid-Off 6 Akin to Contract Attorneys”
Updated at 4:35 p.m., central time, to add London Times coverage.