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Thursday, March 05, 2009

Law Firm Associate Reductions...

More bad news for big law firm associates.... Law firms have been hit hard by the economic downturn (along everyone else).  It's at least clear that the legal industry is weathering its most significant upheaval since the dot-com implosion in the late 1990s. The U.S. Bureau of Labor Statistics recently reported that the legal services industry in the United States lost 1,300 jobs in January alone.

The tallies in the last few weeks, however, seem stark compared with the January figures. Last week, Latham & Watkins garnered significant attention for shaving almost 200 attorneys from its associate ranks (about 10%).  That news was followed with reports that Orrick was laying off 20% of its associates (almost 120 attorneys, and over 200 staff).  These layoffs were on the heels of firing approximately 40 attorneys last November, apparently the first time it had cut lawyers in its 146 year history.  Holland & Knight is reporting laying off approx. 15% (70 attorneys), Cooley Godward approx. 13% (52 attorneys), and Wilson & Sosini approx. 10% (45 attorneys).  Yesterday -- referred by one legal publication as "black wednesday" -- it was revealed that O'Melveny, one of the nation's largest firm, will lay off 90 attorneys and almost 110 staff, while Dewey & LeBoeuf and Sherman & Sterling are also laying off large amounts of staff and associates. For the time being, it seems that the California firms are being hit harder than the New York firms.  These layoff numbers also follow up reports that summer associate offers have wilted away.

I'd be interested in whether there's any news out of the large firms in New York, Chicago, or D.C.  Although the media attention is on the large firms, I would assume the regional and smaller firms are facing similar cutbacks.

Posted by Austen Parrish on March 5, 2009 at 11:53 AM | Permalink


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My understanding from speaking to a Latham partner is that a substantial number of the layoffs were in the NYC office. So, while it may appear that CA firms are getting hit the hardest, it may be that one of the primary issues is that the NYC branch offices of firms with national or global aspirations are no longer sustainable (or, more precisely, the practice areas that are hit the hardest are firm-wide, but concentrated in NYC). It has now become more commen for firms in one market to all announce layoffs around the same time. It reduces the market backlash.

Posted by: anon | Mar 5, 2009 12:34:40 PM

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