Katten Muchin Rosenman and Sonnenschein Nath & Rosenthal laid off attorneys as they struggle to adapt their workforce sizes to the ailing economy's decline in demand for legal services in some areas, such as litigation, real estate and the capital markets.
Katten last week eliminated 21 associates and counsel "across multiple offices and practices," firm spokeswoman Tasneem Goodman said in an e-mailed statement. No adjustments are being made to the first-year associate class and no legal staff members were laid off, she said.
"This measure was taken to further improve the firm's efficiency, to allow for the continued growth of its associates and to ensure the firm's long-term success," Goodman said in the statement. "The firm's financial performance remains strong despite the current economic downturn."
The pain at law firms is being felt across the country. Layoffs at Katten and Sonnenschein, both of which have their biggest offices in Chicago, follow a move earlier this week by London-based Clifford Chance to lay off 20 associates in Washington and New York and the demise last month of the San Francisco-based law firm Heller Ehrman. Clifford Chance cut the associates from its litigation and dispute resolution practice group. Heller Ehrman associates bore the brunt of that firm's collapse with only about a quarter of them landing jobs with partners.
Sonnenschein, which in May cut 37 lawyers, has now laid off another 25 attorneys and a larger number of support staff with an eye to right-sizing for 2009, according to people familiar with the situation.
The Above the Law legal news Web site reported 60 employees, including lawyers and staff, were cut. "We look at staffing levels around this time every year as part of our budget and practice planning processes, and it is not unusual for us to make adjustments," the firm said in a statement.
The firms' troubles come as economies across the world are squeezed by a lack of credit and liquidity in the financial markets and as stock exchanges worldwide react to financial uncertainty with volatile swings not seen in decades. U.S. and other government measures to ease the credit crunch and anxiety over the lack of lending have yet to bring stability to the markets.
Katten and Sonnenschein each have between 650 and 700 attorneys practicing in a broad range of areas. Katten's focus is on corporate, financial services, litigation, real estate, commercial finance, intellectual property and trusts and estate matters. All eight of the firm's offices are in the U.S. except for one outpost in London.
Sonnenschein, which has been trying to expand to about 1,000 lawyers, has significant corporate, litigation, public policy, financial and real estate practices. The firm's 15 offices are also concentrated in the U.S. with just two foreign offices in Zurich and Brussels.