Biglaw, Layoffs

Seyfarth Layoffs: Confusion And Chaos Reign

Seyfarth says salary increases didn't spark layoffs.

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Unemployment or Downsizing ConceptWhen Seyfarth Shaw shocked the legal world with deep cuts to its workforce — upwards of 40 attorneys is the number tipsters consistently pass along — the most shocked of all might have been Seyfarth attorneys themselves. For every tipster passing along the story, there was another long-time source within the firm who hadn’t heard any inkling of layoffs hours after the firm started showing people the door.

One report we received zeroed in on the speculation that Seyfarth’s reticence to increase salaries last year played a role in this week’s announcement. Apparently, the firm had been telling everyone that the increases hadn’t hampered the financial outlook:

Everyone is caught off guard. Despite the Poor e-mail on salaries last year, the whole story had been that we are doing very well. Everyone here is shocked; even high level equity partners were/are surprised.

Another tipster put it more bluntly in the hours after Above the Law posted our initial story and the firm made a statement:

People freaking out.

Indeed. Ultimately, Seyfarth did issue a statement in the form of an email from Seyfarth chair and managing partner Pete Miller circulated internally:

Amid a shifting market for legal services, we have an obligation to continue managing our business as effectively as possible, while being responsive to the needs of our clients and the market at large. We’ve recently completed a careful review of our business to maximize performance and best serve our clients, while continuing to execute our growth plans.

To meet these objectives, we have made the difficult yet necessary decision that some individuals, both lawyers and staff, will be leaving the firm. We are grateful for the contributions of those impacted, appreciate their service and are working to ensure their transitions are as smooth as possible.

Looking ahead, the firm remains strong, focused, and growth-oriented as we approach the midpoint of the year.

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That’s an appropriately optimistic outlook, but the word on the street is that the firm had a lackluster Q1 and decided to jettison a number of folks who — for whatever reason — weren’t billing enough.

Low billers are out. Doesn’t depend on seniority. Cuts across firm.

Often low billing is a symptom of a specific practice group falling on hard times and — coincidentally or not — a couple of practice groups seem disproportionately hit:

Looks like mostly impacted were in corporate and real estate groups.

The firm held a meeting yesterday to discuss the layoffs and from what we’re hearing, they’re doubling down on the message that the remaining associates have nothing to fear but fear itself:

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Definitely somber in tone. They wouldn’t give us specific numbers other than to say it affected people across departments. Not at all related to salary increases according to them. They stressed that point. No hours increases or salary/pay reductions.

The salary boost may not have triggered these layoffs, but one has to believe that prior to last summer, a firm like Seyfarth could weather a down quarter without making wholesale cuts. If their finances were really as good as they said they were, a move this bold could have waited at least until after Q2 — or been handled stealthily by a slow trickle throughout the year.

Still, no hours increases or pay reductions suggests the firm isn’t worried about another down quarter pushing them to take further drastic steps.

At least for now.

Earlier: HUGE LAYOFF REPORT: Biglaw Firm Lays Off Associates, Staff, And Partners

HeadshotJoe Patrice is an editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news.

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