This year has seen a grim procession of law firm layoff news, which seemed to pick up momentum just yesterday with the Weil Gotshal lawyer layoffs and the Jones Day staff cuts. Are we looking at a 2008 redux, or is this just a bump in the road as the economy makes its slow recovery?
The Weil news was particularly stunning. If any firm seemed poised to thrive in the post-recession “new normal,” it was Weil, with its diversified practices and hegemonic restructuring group. Alas, with yesterday’s news of Weil’s decision to cut 7% of its associates and slash annual compensation for 10% of its partners by hundreds of thousands of dollars, it is clear that Biglaw job security is a thing of the past.
Let’s explore the reasons behind law firm layoffs, review a chronology of recent reductions, and obtain your views through a reader survey….
The reasons for law firm layoffs are legion and intertwined: the ever-increasing commoditization of legal services and the rise of LPOs, client demands for cost controls, the broken “up or out” system, and so on. And of course the law schools are hardly helping, as they continue to churn out new J.D.s without any regard for the current overcapacity or the fundamental structural changes to the profession. In an op-ed in today’s New York Times, Steven Harper blames greed and “intergenerational antagonism.”
Are yesterday’s announcements an anomaly or are they harbingers of things to come? As Lat noted yesterday, most of the year’s layoff news has concerned secretaries, paralegals, and other support staff. Weil might turn out to be an outlier when it comes to letting attorneys go. On the other hand, all those laid-off support staff might be canaries in the Biglaw coal mine. Weil’s move could inspire its peers to perform their own culls.
Here is a chronological look at all the 2013 major law firm layoffs of which we are aware. Obviously some layoffs are stealthier than others, and perfect information on this subject will never be available. If we missed any, let us know:
Obviously, we don’t know how the rest of the year will play out. Let’s hope this grim timeline above will not have to be frequently updated.
What do you predict on the law-firm layoff front? Please take our survey: