associate layoffs cost money.jpgThis weekend, the New York Times explored the cascade of sadness left behind after massive layoffs. Aside from fear, the Times noted that there can be a productivity downgrade that shows up in real economic terms.

Too often, their anxious and overworked remaining employees become risk-averse and unproductive, or leave for other jobs. As companies hire new workers or turn to outside vendors to compensate, the short-term savings from layoffs can evaporate.

The National Law Journal also has some stern advice for layoff-happy firms. According to Bruce McEwen of Adam Smith Esq., “law firms that slash associate numbers in hopes of keeping profits-per-partner high may be headed for trouble.”
What else law firms can try, beyond going to $190K, after the jump.

Gauging associate demand for firm jobs is “somewhere on the spectrum between astrology and numerology,” according to Morrison & Foerster Chairman Keith Wetmore. Sometimes layoffs are used as a method of course correction.
But are law firms sufficiently taking associate morale into account in their business models? Or are they just creating a corps of dispirited employees who will leave as soon as a happier opportunity comes their way?
There are no easy answers, but USC professor Warren Bennis said that it comes down to one word: respect.

[Bennis] decried bureaucracies that “lay down edicts” about cutbacks and treat employees as if they were invisible or indistinguishable — the opposite, he said, of respecting them, which in essence means seeing them clearly and individually.

How much does respect cost nowadays?
After a Downsizing, How to Motivate? [New York Times]
Fast cuts could lead to regrets [National Law Journal]

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