Partner Ousters Double or Triple the Pace of Two Years Ago, Consultant Says
Few U.S. law firms are acknowledging partner cuts, but they are happening and could gather steam if firm leaders foresee a long recession.
Consultants tell the Daily Journal (sub. req.) that partner terminations are on the upswing and, if the downturn continues, they will likely be made in a proportion that is at least half that of associate layoffs.
One law firm that has recently acknowledged partner ousters is White & Case, which has pledged to restructure its partnership, resulting in “a reduction in the number of partners.” Two other law firms—Holland & Knight and McDermott, Will & Emery—have also acknowledged laying off some partners, but did not provide specifics.
Legal consultant Blane Prescott of Hildebrandt International told the Daily Journal that partner terminations have “definitely increased.”
“I’d say the pace is easily twice the pace of two years ago. Maybe three times,” Prescott said.
Tony Williams of London-based Jomati Consultants told the publication that firms are likely considering partner cuts to preserve associate-to-partner ratios. A firm that has laid off 10 percent of its associates will consider cutting at least 5 percent of its partners—and probably more, he said.
Williams said firm leaders won’t cut partners unless they believe the downturn will persist into late 2010, since severance costs can equal a year’s salary for equity partners.
Several U.K. firms have also announced partner layoffs, the Daily Journal says. They include Allen & Overy, Linklaters, Ashurst and Addleshaw Goddard. U.S. firms making partner cuts in 2008 and prior years include Jenner & Block, Mayer Brown, Winston & Strawn, and Sonnenschein Nath & Rosenthal.
