Citing an uncertain economy, Cooley Godward Kronish axed 52 lawyers and 62 staff Wednesday.
The 725-lawyer firm cut associates, including some who had just started this fall, and three special counsel. Practice areas most affected by the layoffs are those being hardest hit in the economic downturn: corporate, transactional and public securities, the firm said.
"Given the continued slowdown we have experienced in pockets of the firm over the last five months and the forecast for continuing global economic turmoil in 2009, the executive and management committees concluded that a reduction is necessary at this time," Cooley CEO Joseph Conroy wrote in an all-hands memo sent out Wednesday.
The firm joins a growing list of Am Law 200 firms to lay off lawyers. In the San Francisco Bay Area, Orrick, Herrington & Sutcliffe cut 40 lawyers in November, and Gunderson Dettmer Stough Villeneuve Franklin & Hachigian laid off half of its first-year class in December.
Cooley just finished up a relatively strong year, with 14 percent growth in revenue, although profits per partner were down 7 percent to $1.32 million. Conroy said the cuts came in planning for the upcoming year.
"We decided that in certain practice areas we were going to have more associates than we could keep busy," he said.
Conroy said the firm didn’t proceed with its normal performance reviews, which often result in moving out underperforming associates. He said the layoffs, in part, were done "in lieu of doing that."
Laid-off associates and staffers will be getting up to six months in severance, depending on experience. As a result of the severance packages, Conroy contended that the firm wouldn't be saving much money this year.
"It is designed first and foremost to promote the long-term financial health of the firm," the CEO said.
The firm took around 30 emerging-companies lawyers from the collapsed Heller Ehrman late last year. Although the cost of the acquisitions were a drag on profits in 2008, Conroy said that the group is very busy.
When the Heller lawyers came over, Cooley wouldn't take any junior associates, wanting to give any additional work to Cooley associates. Even so, at least one associate and one paralegal from the Heller group were laid off, according to sources at the firm.
Palo Alto, Calif.-based Cooley has offices in San Diego, Boston and New York among other cities. The firm declined to say where the laid-off lawyers worked, but sources reported that Bay Area offices were affected.
The firm is historically known for its corporate practice, but now generates about half its revenue with litigation. Conroy said that the bankruptcy, IP litigation and complex commercial litigation groups were largely untouched by the cuts.
Law firm consultant Peter Zeughauser, of the Newport Beach-based Zeughauser Group, said he wasn't surprised by the announcement, noting that firms have been cutting staff for months.
"There have been some layoffs already, and there will be more still," he said.
