Law Practice Management

Sonnenschein Layoffs Signal Sea Change in Law Firm PR Strategy

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An announcement that Sonnenschein, Nath & Rosenthal is laying off 37 lawyers and 87 staffers was noteworthy for the size of the reduction alone. But even more noteworthy, perhaps, is the fact that the more than 700-attorney Chicago-based international law firm took a highly nontraditional approach to the reduction in force, simply by not trying to conceal the situation from the profession and the general public.

Firm officials discussed it with legal blogs as soon as word of the layoffs began to circulate, rather than trying to send those who got the pink slip quietly out the door, or worse, from the standpoint of those concerned, saying that their job performance was subpar instead of admitting that the firm has less business in a bad economy. The layoffs were announced firmwide in an e-mail on Friday afternoon, after those affected were notified, Above the Law reported. The legal blog apparently broke the news story Tuesday evening after confirming it with Elliott Portnoy, Sonnenschein’s chairman.

“Most law firms hate to admit the need to downsize to avoid any sign of financial weakness in an intensely competitive industry, and a mass layoff such as Sonnenschein’s is even more out of the ordinary,” writes the Chicago Tribune’s legal reporter in a front-page article in today’s newspaper. “Firms that need to fire lawyers generally have done so quietly, a few at a time, to avoid headlines. But that practice now is coming under pressure as law firms confront a challenging economic climate that has stunted the financial deals that earn big fees for corporate law firms.”

Portnoy openly admits that the layoffs were driven by the desire for a stronger bottom line, including the kind of profits that will help it attract new partners, the Wall Street Journal Law Blog writes in a post late yesterday afternoon.

“This sort of frank talk still counts as novel in the legal biz,” Law Blog said. “Sure, firms are much more hard-nosed than in the bygone era: firings and demotions are common, as is the all-consuming fixation on average profits per partner. Yet, capitalistic machinations are not often put out in plain view.”

Six partners are reportedly among the 37 lawyers who are being let go at Sonnenschein with 60 days’ notice and transition assistance. The layoffs had the biggest impact on the firm’s real estate and litigation departments, which are Sonnenschein’s biggest practice areas.

Additional and related coverage: “Sonnenschein Acknowledges Layoffs of 37 Lawyers, 87 Staffers”

American Lawyer: “Sonnenschein Announces Layoffs – More Than 100 Legal, Nonlegal Jobs Cut”

Law and More: “Brand Rx - Necessary Losses, After Loss [e.g. Sonnenschein Layoffs]”

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