January’s carnage, in which U.S. law firms laid off more than 1,500 attorneys and staff, has been followed by further freefall in February, with layoffs exceeding January’s by a considerable margin—at last count more than 2,000 attorneys and staff lost their jobs.
On a single day, February 12, "Bloody Thursday,” U.S. law firms announced axing 800 attorneys and staff. And Friday Latham & Watkins announced internally that it is laying off 190 associates and 250 staff–more than double the number that Above the Law tipsters had warned of earlier this week.(That being Above the Law’s second major inside tip, having earlier reported a Pillsbury partner’s indiscreet cell-phone disclosure on a commuter train.)
The scenario is playing out in every corner of legal practice. The Philadelphia District Attorney’s Office — a large law firm in its own right — for the first time rescinded offers to its incoming class of 12 attorneys. The 300-attorney office typically sees about 10 percent attrition each year, which enables it to bring in a class of up to 35 people, as it did last year. But in this latest fiscal year, only two people left,
The office rescinded offers to all 12, according to Kathleen McDonnell, chief of legislation and head of the hiring committee in the District Attorney’s Office. McDonnell said that, given the dire state of the city’s financial outlook, it became clear that the smaller class size, delaying start dates and loosening a three-year commitment policy were not going to be enough to justify bringing in any new attorneys.
And of course the losses are not limited to this side of the pond. On February 19 a top London-based firm, Allen & Overy, announced cutting up to 450 attorneys and staff.
The question being asked is whether these are drastic responses confined to the current unprecedented economic situation or whether the long-term future of individual law firms, and perhaps the practice of law generally, is being restructured.
Stay tuned. (And see upcoming entry "Innovation During the Downturn.")