Staff Layoffs

In early July, we broke the news that Cooley Law School would stop accepting first-year students at its Ann Arbor campus and would begin conducting faculty and staff layoffs due to continuing declines in both enrollment and revenue. At the time, the school had “no plans” to completely close the campus.

At the end of July, however, Cooley Law notified its Ann Arbor students there may be a “possible consolidation” of that campus with other Cooley campuses, three of which exist in Michigan.

It’s now mid-August, and the foreboding promise of layoffs has finally come to fruition. How many heads will roll thanks to this law school’s “right-sizing” plan? Our sources say the damage is “massive”…

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For some reason, very few law firms are prepared to deal with the headcount issues. It is interesting because the reaction from them also is peculiar. I think it was reported—I don’t know, maybe 12 months ago—that Weil Gotshal had a significant layoff of lawyers. They reduced—I think it was their associates, but maybe it was of counsel as well—and there was quite a negative reaction in the press to that.

I am not privy to any of their numbers or anything that is going on in the firm, but, as a restructuring person, my reaction is, “Look, this is someone getting their house in order. This is an appropriate thing to do.” It is no secret that revenues across the industry are down. And, so, you either need to take market share, or you need to right size your organization.

Joff Mitchell of Zolfo Cooper, during an interview with David J. Parnell of Forbes, speaking about how layoffs are frowned upon in Biglaw.

(For the record, Weil laid off 60 associates — about 7 percent of its associate ranks — and 110 staff members, about half of whom were legal secretaries.)

In a recent survey, managing partners of large law firms expressed tepid expectations about demand for legal services. So it’s not surprising that cost cutting — or, to put it more nicely, expense-management initiatives — remain popular in Biglaw.

Who’s the latest major law firm trying to reduce its payroll through a voluntary retirement program?

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The arrival of summer associates brings good news for the permanent lawyers and staff of Biglaw. Not only do summer associates infuse their firms with youth and beauty (and opportunities for free lunches), but they serve as an amulet of protection against the layoff spirits.

Yes, summer programs have shrunk dramatically since the pre-recession glory days. Check out this sobering infographic for a powerful illustration.

But for those folks lucky enough to land summer associate positions, the odds remain high that they will get offers (unless they misbehave). And firms want those offers to be accepted, so they try to present themselves to summer associates as shiny happy workplaces. Layoffs, whether of lawyers or staff, are kind of a buzzkill. Firms prefer to conduct them before or after their summer programs.

So perhaps this latest news will be our last layoff reporting for a while. Which firm just made double-digit cuts to its ranks?

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We’re midway through Biglaw’s second quarter, and this will be the third week in a row we’re covering law firm layoffs or buyouts of some variety. This just goes to show that no matter how well a firm does, it’s always looking to do better, and the easiest way to do so is by managing human expenses.

Sometimes the firms attempting to trim their ranks are members of the “Super Rich,” with high revenues per lawyer (at least $1 million) and even higher profits per partner (at least $2 million). Other times, these firms are rich but not super-rich — firms that generally saw “modest, hard-won gains” last year, according to the American Lawyer.

The firm we’re writing about today falls into the latter group, with relatively small financial gains in 2013. Despite this, it’s still offering “very generous” packages to inspire employees to walk away….

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It was just last week we were informed that the firms designated as “super rich” among all other Biglaw firms — specifically, the 20 with profits per partner of $2 million or more and revenue per lawyer of $1 million or more — were only getting richer.

That being the case, we can’t imagine that these Biglaw titans are hurting for cash, especially when the chasm between the super rich and everyone else keeps growing wider and wider.

This is why we were shocked to find out that the top-tier law firm recently revered for having the best brand in the business was trying to trim its ranks with offers of buyout packages…

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The first quarter of 2014 was relatively good for large law firms. But that hasn’t stopped major firms from trimming their ranks. In fact, some of the strong performance in the first quarter appears to be attributable to prudent management of expenses — including employee compensation.

This week brings word of still more layoffs. The latest reduction is sizable, affecting about 40 employees.

Which firm is making the cuts, and what is the mix between lawyers and staffers?

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This week has been a big one for rankings. On Monday, the American Lawyer released the 2014 Am Law 100 rankings, chronicling how Biglaw fared in 2013. Last night, we released our top 50 law school rankings, based on the latest employment data from the ABA.

The process of getting measured causes people to modify themselves toward the metric; just ask any bride trying to fit into her wedding dress. So it shouldn’t be surprising that, with rankings on the brain, law firm leaders have been cutting headcount to boost profits.

Which major law firm just announced double-digit cuts, perhaps in an effort to get into fighting shape by Memorial Day, before the arrival of summer associates?

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Lindsay Lohan

* Noah “Kai” Newkirk, the protestor who disrupted Supreme Court arguments in February, was sentenced to time served and barred from the court. Don’t worry, we’ll get you all the SCOTUS clerk news you need, cutie. [Associated Press]

* “There are still a lot of firms out there hoping the good old days are going to return, and are finally coming to the realization that that isn’t going to happen.” More on Biglaw layoffs. [Am Law Daily]

* Yet another law school gets its rating downgraded by Moody’s. As a standalone school with “substantial declines in JD enrollment,” Vermont Law’s outlook is now negative. Sad trombone. [Moody's]

* Jason Bohn, the heavily indebted law school grad once profiled by the New York Times, was convicted of murdering his girlfriend last month, and now he’s been sentenced to serve life in prison. [New York Post]

* “Is the Tax Code really 70,000 pages long?” No, not really. We wonder who started the rumor that it was so long, because in reality, it’s only about 2,600 pages long — which is still way, way too long. [Slate]

* It appears that the apple doesn’t fall too far from the tree with this celebrity family. Lindsay Lohan’s mother, Dina Lohan, pleaded guilty yesterday to drunken driving and speeding charges in New York. [CNN]

Yes, today is one of those days: a day with multiple law firm layoff stories to report (not to mention rescinded offers).

This morning we brought you news of 20 support staffers losing their jobs and 10 offers getting rescinded. Now we share with you the story of a firm cutting almost 40 people.

Which firm just joined the nationwide layoff club?

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