In light of the possible trouble that may lie ahead for large law firms, it should come as no surprise that some of them are battening down the hatches. One way to prepare for a tough economic climate is to reduce one’s expenses. And one way to reduce expenses is to conduct layoffs, of attorneys or of staff.
But the work, the work that generates revenue for firms, still needs to get done. One way of reducing expenses while still getting all the work done is to outsource certain functions to an outside service provider. This effectively gets job positions “off the books” of the law firm, which no longer has to pay salaries or benefits for the lawyers or staffers in question; the law firm just has to pay the vendor. (This could be viewed as a form of financing; as you may recall, cash-strapped Dewey used vendors for many services — vendors who are now its creditors in bankruptcy.)
Let’s learn about the latest firm that is reducing the ranks of its staff in favor of relying on an outside company….
The firm in question is Foley & Lardner. As of this past Monday, October 1, the firm outsourced most of its records management functions to Williams Lea — a popular provider of law firm business outsourcing services, used by such firms as O’Melveny & Myers, Goodwin Procter, and yes, Dewey.
As a result, an unspecified number of employees in Foley’s Records Management department will be losing their employment with the firm. One source estimates the number of affected employees as “several dozen.”
This change was announced in August in a memo from Foley’s chairman and CEO, Jay Rothman (which we’ve reprinted on the next page). From Rothman’s memo:
We have informed the employees in our Records Management Department that, effective October 1, their positions will be outsourced to Williams Lea, a leader in law firm business process outsourcing. This change affects all Records Management employees assigned at the office level, including managers, supervisors, coordinators and records specialists. The members of our Records Management staff have contributed to the effectiveness of our records function over the years and have much to offer an organization like Williams Lea. All of our Records Management staff will have the opportunity to interview for a position with Williams Lea, and while we cannot offer absolute assurance, we expect that many of them will be offered jobs with that organization and will continue to work with us. We will, of course, offer severance to all departing staff members.
We reached out to Foley to see if they had anything to add to the Rothman memo; they did not get back to us. But here is a reaction from one former Foley employee:
On August 6, the memo from Jay Rothman (CEO of Foley) was received by all staff. We were, needless to say, stunned. What was truly stunning is that a visit to the Williams Lea website indicated that most of the Foley Records positions had been posted to the Williams Lea website “US positions” tab on July 16.
There wasn’t even an attempt to protect any current employee. To my mind, this “outsourcing” is just another term for stealth layoffs. The consensus of opinion among staff is that the outsourcing of the Records people is merely the tip of the cliched iceberg, as Williams Lea provides ALL levels of legal staffing.
What about the chance to work for Williams Lea? Our source, like McKayla Maroney, was not impressed:
The current Foley Records people had to apply to Williams Lea and be interviewed by Williams Lea for positions they had held for years. Many were offered positions by Williams Lea…. [but at least one was] told Williams Lea would match her Foley salary until January 1, then she would have a take a serious pay cut.
The callous disregard for the welfare of long-time Foley employees has made remaining staff… edgy.
Well, they’re not alone. In today’s world, everyone — staffers, associates, non-equity partners, and even equity partners (afraid of de-equitization) — is “edgy.” The best we can do is take
lots of Xanax some deep breaths, and hope for the best.
Good luck to all the Foley employees affected by the outsourcing. If you have similar news to report at your firm, please feel free to contact us. Thanks.
(If you’re interested — perhaps your firm is contemplating a similar move and would like a template for how to break the news? — flip ahead to the next page for Jay Rothman’s memo announcing the outsourcing.)