Last week was a rough one for Womble Carlyle Sandridge & Rice.
On Friday, Arent Fox announced that it had swiped a seven-lawyer telecommunications group from the firm. Earlier in the week, Womble Carlyle slashed salaries for underperforming lawyers by 10 percent, a firm spokesman confirmed.
In a memo leaked to Above the Law, the firm blamed the cuts on a changing legal world in which clients choose law firms primarily based upon the bottom line. The decision to cut salaries puts Womble Carlyle in the company of McGuireWoods, McKenna Long & Aldridge, Greenberg Traurig and now-defunct Wolf Block.
The group joining Arent Fox made up about half of Womble Carlyle's telecommunications practice. It includes partners Ross Buntrock, Jonathan Canis and Michael Hazzard; counsel Stephanie Joyce; and associates Joseph Bowser, Adam Bowser and Katherine Barker-Marshall. They started working together in Arent Fox's Washington, D.C., office last week. Buntrock and Hazzard started at the firm earlier this month.
Buntrock and Hazzard tell the BLT that their decision to leave Womble Carlyle had nothing to do with the the firm's decision to roll back salaries.
"We were just as surprised as anyone when we heard that," Hazzard says. He adds, "Womble Carlyle is a great firm. We just felt Arent Fox's global vision for its telecommunications practice was a better fit for us."
Despite last week's bad news, Womble Carlyle, which has about 70 lawyers in its Washington, D.C.; Tysons Corner, Va.; and Baltimore offices, has made a few personnel moves of its own in recent months. In January, the firm announced that it had added three patent lawyers and one technical specialist to its life sciences patent practice in Washington. In February, the firm picked up a team of five lawyers and lobbyists for its federal and state government affairs team, including former Rep. Deborah Pryce, R-Ohio. Two of those lawyers joined the firm from Foley & Lardner.
Arent Fox hasn't been immune to the economic downturn either. The firm reported double-digit growth in 2008, pulling in a gross revenue of $222.5 million. That number marks a 10.5 increase over 2007. But those strong numbers haven't prevented the firm from conducting layoffs. In March, the firm handed pink slips to 13 associates.
Womble Carlyle chairman Keith Vaughan tells the BLT the decision to cut salaries was a difficult but necessary one that will better position the firm as it moves forward in a troubled economic environment. He says the legal industry is having to adjust to the one-two punch of clients wanting legal fees to go down at the same time that the market is being flooded with lawyers looking for work.
"All firms, ours included, need to adapt to a changing world in response to client demands. Clients are determined to reduce their legal fees, and for us that means cutting costs where we can without lowering the quality of the work we provide," Vaughan says. "We're looking at occupancy costs, personnel costs and everything else that might make us more efficient."
Vaughan says he expects more firms to scale back salaries in the coming months as they start positioning themselves to be more cost-efficient for clients.
"We wouldn't lower our salaries if we thought we were going to lose a whole bunch of lawyers to other firms," Vaughan says. "I fully expect that this will be more widespread."
As for the telecommunications group that recently joined Arent Fox, Vaughan says he wishes them nothing but the best.
"I don't think their leaving had anything to do with concerns about the firm's finances. It was about the typical reasons for why anyone moves from one firm to another: trying to find the best fit," he says.
This article first appeared on The BLT: The Blog of Legal Times.