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Nationwide Layoff Watch: The Sky Is Not Falling
(Plus: A list of law firms that have done layoffs.)

Tuesday, August 12, 2008 5:03 PM - By David Lat

Will Work for Food 2 Above the Law blog.JPGIf you’re a regular reader of legal newspapers and blogs, you might get the sense that law firm layoffs are happening everywhere. At the current time, the ATL category tag for Layoffs contains about 90 posts (and counting). It’s a topic that we cover extensively — and many readers still clamor for more.

Here at ATL, a self-styled “legal tabloid,” inducing panic through sensationalism and scaremongering — layoffs! delayed start dates! cold offers! — is part of our job description. But are things really that bad?

With respect to lawyer layoffs, maybe not. Leigh Jones examines the topic in a very interesting article for the National Law Journal (subscription):

A look at the bigger picture shows a profession responding to the economic downturn rather adroitly — at least so far.

Since October, some 338 attorney layoffs have been confirmed and reported by various news organizations at 12 law firms among the NLJ 250, The National Law Journal’s annual survey of the nation’s largest law firms.

To be sure, unreported terminations could make the layoff totals much higher. But even if stealth layoffs are twice or even three times the reported amount, the number of attorneys ushered to the exits in the last 10 months is relatively small.

More good news — but also some bad news, namely, a list of large law firms that have laid off lawyers — after the jump.

Three hundred lawyers would be enough to staff a fairly sizable law firm. But in the context of Biglaw, the number may not be that big:

Attorney layoffs since October equal about 3.5 percent of the total number of attorneys at the 12 law firms confirming layoffs. Some 9,603 attorneys work at those firms, based on the latest NLJ 250 survey. October marked the first reporting of layoffs tied to the recent economic slowdown.

The total number of confirmed and reported layoffs was derived from The National Law Journal and its affiliates, in addition to Above the Law, the Wall Street Journal Law Blog and Adam Smith, Esq., a law blog.

The 3.5 percent is “small,” said James Leipold, executive director of NALP, formerly the National Association for Law Placement.

Even smaller are the number of layoffs compared with the total number of attorneys at NLJ 250 firms — 128,213 — and with the number of attorneys in the United States, about 900,000.

Of course, the percentage spikes higher at some firms. According to the NLJ, Cadwalader — America’s Firingest Law Firm™ — has laid off 131 lawyers, over 18 percent of its attorneys.

ATL gets a shout-out in the article:

For every confirmed layoff, there is at least one layoff that goes unreported, said David Lat, editor-in-chief of Above the Law. His blog has provided much coverage of attorney and staff layoffs. In addition, some firms have used performance reviews as opportunities to dump attorneys from unprofitable practice areas, he said.

Wall-to-wall coverage of attorney layoffs can give readers the sense that the sky is falling, Lat said. On the other hand, considering that law firms are notoriously tight-lipped, the picture may be much worse than the reported numbers reveal. He added that the ratio of stealth to confirmed layoffs could be as high as 2-to-1.

“It’s hard to bring transparency to it,” he said.

That doesn’t stop us from trying here at ATL. Of course, many of you say: TRY HARDER!

Unfortunately, we can’t make much headway if (1) affected attorneys keep quiet about their fates (as many do, because they don’t want to forfeit their severance, a la Shinyung Oh); and (2) management teams at law firms, who have the big-picture view of what’s going on at their shops, don’t share their global data with us (which they often don’t, preferring to go down the stealth route).

Finally, just in time for recruiting season, Leigh Jones and the NLJ have compiled this handy list of law firms that have conducted attorney layoffs. Here they are (in alphabetical order; find out more by scrolling through our Layoffs archives):

1. Blank Rome
2. Cadwalader, Wickersham & Taft
3. Dechert
4. DLA Piper
5. McKee Nelson
6. Patton Boggs
7. Pillsbury Winthrop Shaw Pittman
8. Powell Goldstein
9. Sonnenschein Nath & Rosenthal
10. Sutherland Asbill & Brennan
11. Thacher Proffitt & Wood
12. Thelen Reid Brown Raysman & Steiner

We’ve just given you excerpts from the NLJ article. You can read the full piece here (subscription), or download a copy by clicking here (PDF).

Correction: We’ve crossed McKee Nelson off the list based on a subsequent correction to the National Law Journal article. The NLJ piece now reads: “New York-based McKee Nelson was reported to have reduced its number of attorneys through buyouts and sabbaticals.”

Correction: To be added to the list: Edwards Angell Palmer & Dodge.

Do you actual knowledge of law firm layoffs that we have not yet covered? Please send us your tips, by email. Thanks.

About Those Law Firm Layoffs? It Isn’t That Bad [National Law Journal (subscription)]
Leona Lewis - Better in Time [YouTube]

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