Nationwide Layoff Watch: 60 Positions Across 22 U.S. Offices
Have the associate pay raises led to staff layoffs throughout Biglaw?
Has the Great Associate Pay Raise of 2016 ushered in the Not-So-Great Staff Layoffs of 2017? It’s a tough question to answer, especially without inside information about the financials of different firms. But it is fair to say that there have been a significant number of staff layoffs since associate pay hikes spread throughout Biglaw last year, and it is also fair to say that some staffers think, accurately or not, that reductions in their numbers are tied to bump-ups in associate pay.
On Monday, approximately 60 staffers at Dentons were informed that today would be the last day at the firm. We heard from a number of the affected individuals, and some of them speculated that the layoffs were caused in part by the need to trim expenses in the wake of increased costs for associate compensation.
We reached out to Dentons about the layoffs, which provided this statement through a spokesperson:
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As part of regular business operations, Dentons has undertaken a review of its U.S. internal operations. The legal sector is rapidly evolving, and just like our clients it is important that we constantly explore ways to ensure our business is aligned to the needs of our Partners and clients to demonstrate continued value. Having completed one full year post-merger in the U.S., we now have a complete set of data on our combined operations, as well as continued integration of our US and global support teams. In many U.S. locations, we have concluded moving from two offices to one, and consolidated many systems, among other integration. As a result, earlier this week we implemented a realignment of our business services teams. Regrettably, this resulted in notifications of an overall reduction of approximately 60 positions in business services across our 22 U.S. offices. This process is complete.
While very unfortunate for the affected individuals, these cuts do not come as a total surprise. Back in November, after a similar analysis, Dentons made cuts to its international support staff. And it is certainly far from the only firm undertaking an efficiency-focused review of its operations.
A few additional points from our reporting (which the firm declined to comment on, resting on its prior statement):
1. The cuts appear to be centered on support staff. We have not heard of any lawyers being laid off as part of this reduction (but let us know if we’re wrong).
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2. Affected offices included Los Angeles and Atlanta (and the latter saw significant cuts as a former McKenna Long hub; McKenna Long was itself formed by a merger between two firms, the D.C.-based McKenna & Cuneo and the Atlanta-based Long Aldridge & Norman).
3. Employees are getting severance (one week for every year of service, at least according to the sources we’ve heard from).
4. Bonuses and raises were supposed happen on April 1 for staff, but those who were not let go have been told there will now be a delay with reviews and comp.
If you’re one of the surviving staffers, don’t be shocked if you hear the popular recessionary refrain: “Your bonus is your job.”
We fear that more cuts are coming in Biglaw. If your firm or organization is reducing the ranks of its lawyers or staff, whether through open layoffs, stealth layoffs, or voluntary buyouts, please don’t hesitate to let us know. You can email us or text us (646-820-8477). Thank you for helping us to bring transparency to an often opaque profession.
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David Lat is the founder and managing editor of Above the Law and the author of Supreme Ambitions: A Novel. He previously worked as a federal prosecutor in Newark, New Jersey; a litigation associate at Wachtell, Lipton, Rosen & Katz; and a law clerk to Judge Diarmuid F. O’Scannlain of the U.S. Court of Appeals for the Ninth Circuit. You can connect with David on Twitter (@DavidLat), LinkedIn, and Facebook, and you can reach him by email at [email protected].
