No one is safe. For several months, some of the largest law firms in the country have announced layoffs of attorneys and support staff. More recently, the pace seems to have picked up, with the bad news coming in waves.
Last week, New Haven, Conn.-based Wiggin and Dana became the latest major Connecticut firm to announce that it had trimmed lawyers, administrative assistants and support staff.
Wiggin and Dana purged 14 attorneys, reducing its total to 150 lawyers spread across five offices -- in Philadelphia, New York and three locations in Connecticut.
"As the current economic crisis deepens, it has become apparent that Wiggin and Dana is not immune to the pressures adversely affecting all businesses, including our clients and other prominent law firms," according to a statement released by the firm. "After careful review, we have decided that we must align our staffing levels with our clients' needs in this uncertain and challenging economy."
Additionally, Wiggin and Dana announced that it trimmed 14 administrative staff and paralegals from its ranks in January.
Firm spokeswoman Elizabeth Butcher would not reveal any details about the layoffs, and managing partner Maureen Weaver declined comment. "Due to the confidential nature of these circumstances we are not releasing any specific information regarding attorney office location or practice area," Butcher said in an e-mail.
A lawyer who remains employed in the New Haven office said the layoffs primarily hit New Haven with "some in Stamford[, Conn.,] and maybe one in New York" among practice areas that include litigation, real estate, and trusts and estates.
"Internally," the lawyer said, "we don't know the list" of people who lost their jobs.
The lawyer noted that "the firm has handled this in a first-class manner."
Members of the firm's leadership team met with the affected attorneys, staff members and practice group leaders before any announcement was made. From what the lawyer could sense, the layoffs did not generate a feeling of worry or panic.
"We were told [the layoffs were] a one-time-only thing and they were not merit-based decisions," the lawyer said. "This was strictly related to the economy."
JOIN THE CROWD
Other Connecticut firms have made similar decisions in the first quarter of the year.
In February, Day Pitney announced the termination of 66 staffers, including 31 in its Connecticut offices. Also in recent weeks, Updike, Kelly & Spellacy announced that it was cutting three administrative assistants and two associates, while Pepe & Hazard laid off two attorneys and two staffers because of decreased business.
Since mid-December, Wiggin and Dana had been selectively growing certain practice groups. Patrick J. Egan augmented the firm's litigation department and white-collar defense group in Philadelphia when he was hired from Philadelphia-based Fox Rothschild in late February.
Michael Menapace left Dewey & LeBoeuf, which closed its Hartford office earlier this year, to join Wiggin and Dana's insurance practice group in late January. And in December, the firm enhanced its labor and employment litigation group by hiring Mary Gambardella, a former partner of Epstein, Becker & Green, which cut 23 attorneys and 30 staffers in February.
For law firms, this is no time to sit back and assume everything will work itself out, said James Kaiser, managing director of Kaiser Whitney Staffing in New Haven.
"The expectation is that lawyers will have to work harder to get more business from existing clients or to find new clients," said Kaiser, whose firm specializes in legal staffing. "The lawyers who step up their business development are going to be safer."
Kaiser said the firms that will thrive are those that are equipped to offer diverse legal services and staffed with aggressive attorneys. He expects litigators, especially those dealing with personal injury and employment law, to remain busy.
But, Kaiser said, small and mid-sized firms that are wedded to tradition may not survive the downturn, especially if those firms are dedicated to real estate, corporate work or other areas most affected by the economy.
Law firm management consultant Peter Giuliani did not know about Wiggin and Dana's layoffs when contacted last week, but he cautioned in general against the widespread thinking that cutting back attorneys is the answer in this economy.
"We're seeing some actual moves on the part of the federal government, and if that loosens up credit, there's a lot of pent up demand for deals to get done," said Giuliani, a principal of Smock Sterling in Westport, Conn. "Firms may find themselves lopping transactional lawyers and then ending up short-handed if the economy turns around in a year and there's a need for transactional lawyers."
Nationally, the ax continues to swing. Last week, The American Lawyer tracked law firms with the most nonpartner layoffs since late September and found that Orrick, Herrington & Sutcliffe has eliminated nearly 20 percent of its lawyers in the associate and counsel ranks, with 140 cuts. In all, seven law firms on The American Lawyer's radar have eliminated 9 percent or more of their nonpartner attorneys.
One interesting note: the major firms on The American Lawyer's top 10 list include only two New York firms -- Proskauer Rose and White & Case. California-based consultant Peter Zeughauser said layoff news will become even more dramatic when Wall Street firms start taking serious action. "The big boys haven't weighed in yet," Zeughauser told The American Lawyer. "Ultimately, you will see [more] layoffs."