At these top law firms, profit boosts followed layoffs of lawyers and staff members
Image from Shutterstock.com.
Some of the nation’s top law firms posted substantial boosts in profits last year after laying off attorneys or staff members, according to an analysis by Law.com.
According to financial numbers reported to Law.com so far, at least 15 of the nation’s 200 highest-grossing firms posted revenue or profit increases of more than 5% last year, even after layoffs. Most were among the nation’s top 100 firms.
Some law firm leaders who spoke with Law.com said layoffs were needed to keep their firms healthy. Some said decisions were made before they saw an increase in demand for legal work later in the year. And some said layoffs were already planned, but the COVID-19 pandemic accelerated the timeline.
The Law.com article mentioned these firms and reported on their explanations for layoff decisions:
• Akerman, which saw revenue increase 6.5% after cutting its workforce by less than 5%. A spokesperson said decisions were made early in the pandemic “to confront the uncertainties facing the legal industry.” The spokesperson attributed the law firm’s successful year to its “phenomenal work,” as well as expense management.
• Davis Wright Tremaine, which increased revenue by 7.5% and profits per equity partner by 8.7%. The firm laid off 39 staff members. The firm’s managing partner said the layoffs were “due to a fundamental shift in how we expect to operate.”
• Dickinson Wright, which increased revenue by 2.9% and profits per partner by 14.9%. The firm reduced its workforce by 3% last spring. The firm’s CEO said the layoffs had been planned to address “underperformance and overcapacity issues.”
• Hogan Lovells, which reported increases of 30.8% in profits per equity partner and 2.8% in gross revenue. The firm laid off 43 staff members in the United States and Mexico. The firm’s CEO cited “continuing uncertainties” and the need to be well positioned for a challenging period.
• McDermott Will & Emery, which increased revenue by 17.9% and profits per equity partner by 25.6%. The firm laid off a number of staff members in April but didn’t say how many were affected. The firm’s chairman said the firm made decisions based on information available at the time.
• Procopio, Cory, Hargreaves & Savitch, which increased revenue by 7.6% and partner profits by 24.8%. The firm cut its workforce by 13%. The firm’s CEO said net income increased partly because of a paycheck protection loan that is likely to be forgiven.
• Reed Smith, which reported increases of 15.9% in profits per equity partner and 5.1% in revenue. The firm cut 19 jobs in its London office. The firm’s global managing partner told Law.com last month that the needs of the firm sometimes have to be reconciled “with where you are in any particular point in time.”
• Saul Ewing Arnstein & Lehr, which increased profits per partner by 14.4%. The firm laid off a limited number of lawyers and staff members, although some were rehired. The firm’s managing partner cited a “shift from the traditional lawyer-secretary-paralegal model.”