Layoff Alert: K&L Gates Announces Significant Cuts

This week, K&L Gates began cutting people. A lot of people.

The cuts have been racking up throughout the week, we hear, with Global Managing Partner Stacy Ackermann sending around a message yesterday evening discussing the cuts with staff:

This is fairly classic of the layoff genre: never say the word “layoffs” when you can say “allied professional roles” got “reduced.” On the other hand, in a world of law firms that assiduously deny stealth layoffs happening before our eyes, K&L Gates is willing to acknowledge something’s going on. When reached for comment, Ackermann echoed the sentiment of the email, stating:

Following a comprehensive, multi-month review of our structure to better align with how our business operates today and support future growth, we made the decision to reduce our allied professional workforce. This action is being taken to streamline our support structure, ensuring that we are attuned to immediate client needs and well positioned to anticipate and meet future demand. We are committed to supporting our people throughout this transition, including through separation benefits and outplacement support for impacted colleagues. Our focus remains on serving our clients with the excellence, responsiveness, and expertise they have come to expect from our firm.

The firm confirms that the cuts represent roughly 10 percent of its allied professionals. A rare instance where “decimated” is actually the proper term. Tipsters on the ground estimated that the number was closer to 20 percent, though these reports reflect snapshots of specific offices and departments that might be getting impacted more than others, contributing to the outlook appearing more expansive than it is across the whole corps of staff.

By my math, 10 percent is around 130-170 people — if you take the firm’s 3000-3400 total headcount and subtract the roughly 1700 lawyers.

The firm’s statements are entirely focused upon staff, though some tipsters expressed that their understanding was that multiple junior lawyers were involved as well. So the cuts might run a little deeper than the statements suggest or maybe these lawyers were just the optically inconvenient timing of routine departures. The firm has seen a notable outflow of lawyers over the last several months: a couple partners here, another over here, a whole team over there. [UPDATE: The firm has officially confirmed that lawyers were not laid off]

Tipsters identified a number of people losing their jobs with long tenures, several with more than a decade at the firm. And the terminations seem to cut across functions. Reports include accounting, marketing, and IT. The IT team’s cuts come against the backdrop of an ongoing lawsuit brought by a former manager alleging that the firm fired her following disability leave and describing a less than hospitable culture for the tech team. Whatever the merits of those allegations, it’s hard to imagine morale improving as AI challenges and cyberthreats continue to mount for law firms and the team charged with addressing those problems just got smaller.

In 2017, K&L Gates cut scores of support staff and took out nearly the entire IT training team, the entire Q/A team, Tier 2 Support, and at least one project manager. “They do not understand the importance of the positions they eliminated,” one of them told us then. Nine years and one AI revolution later, that quote still rings ominous.

Is this a challenge facing K&L Gates specifically, or a sign of trouble looming for the industry generally? Doomsayers spent the last couple years predicting cuts across the industry as AI automates more and more lawyer and legal support tasks. I’ve always believed these would manifest slowly as reduced hiring and natural attrition, but at least some firms were always going to opt for swifter action. Is that what’s happening here? And, of course, we’re in the midst of a suspicious Biglaw silence in response to Milbank’s round of raises. Perhaps the rosy financial picture for Biglaw as a whole is showing some cracks?

Time will tell how these cuts fit into the broader landscape. It’s always hard to draw a trend from a first mover.

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).

Earlier: Biglaw Firm Sued For Firing Staffer A Month After Returning From Disability

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Joe Patrice is a senior 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 or Bluesky if you’re interested in law, politics, and a healthy dose of college sports news.