I would like to be the bearer of good news. But today, I would be remiss if I didn't tell you about last week. If you haven't heard by now, Valentine's Day weekend was not a happy occasion for over 1,000 attorneys, paralegals and staff. A handful of firms decided in one two-day bloodbath last Thursday and Friday to lay-off over 1,100 law firm professionals. And that was just from approximately 6 major firms. We don't have the statistics from smaller and mid-size firms or in-house legal departments.
According to an article in the Legal Times, law firms picked this weekend because they finally came to terms with the fact that huge layoffs will save them money and the forecast for 2009 is looking grim. Lay-offs can save firms at least $100,000 per year for each staff member. Never, in the history of law firms have so many people been laid off in one two-day period – even in the dot com bust some years ago.
The firms that announced cuts last week included: DLA Piper, which trimmed 80 lawyers and 100 staff; Bryan Cave, 58 lawyers, 76 staff; Dechert, 19 lawyers; Holland & Knight, 70 lawyers, 173 staff; Goodwin Procter, 38 associates, 36 staff; Cozen O'Connor, 61 staff; Luce Forward, 12 lawyers, 15 staff; Nixon Peabody, 20 lawyers, 36 staff; Epstein Becker & Green, 23 lawyers, 30 staff; and Faegre & Benson, 29 lawyers; and Hogan & Hartson with 149 staff in the DC office. Since major news publications tend to only track BigFirms, it is impossible to know immediately how many people in smaller firms were affected.
I can tell you that I have heard from many paralegals across the country from smaller firms who have either been let go or smell it in the air. One paralegal I spoke to a few weeks ago down in Florida seemed unaware of the thousands of lay-offs that happened in January. I spoke with her again over the weekend and she is sensing something afoot now in her firm. She anxiously awaits to see if she will be summoned to HR at 4:00 p.m.
Consultants predict this is only the beginning. The layoffs last week are "going to accelerate the decision by other law firms to lay people off," says Jerry Kowalski, a New York-based legal consultant.
Law firm leaders aren't going quite that far, but they aren't offering much encouragement, either. "I think every firm is just going to take it one month at a time," says Maureen Dwyer, Pillsbury Winthrop Shaw Pittman's D.C. managing partner. "Every firm is looking within its practice groups for places to trim." Steptoe & Johnson Chairman Roger Warin adds that layoffs have to be an option in this economy. "If that's what seems to be necessary in terms of right-sizing to the volume of our work, it's got to be a consideration," Warin says.
On the other hand, it appears that the smaller vendors are doing just fine. Smaller companies such as outsourcing, e-discovery and trial presentations tell me they have never been so busy. "All I do is take orders," says one CEO of a small litigation support company. "I can't keep up." "We're so busy," says one rep from a Seattle trial presentation company, "I haven't even had a chance to breathe."
So, there is work out there somewhere. It may look a little different than what we are used to. The trick is to find it and find it fast.