Staffing Cuts Multiply, but Are Associate Cuts a Better Solution?



The National Law Journal
January 23, 2009
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It's a sure-fire sign that the tough economy is hitting home: Attorneys who used to share an assistant with one colleague now find themselves sharing with two or even three others.

Tripling or quadrupling up on administrative help is just one way in which law firms are feeling staff cuts. While attorney layoffs have dominated legal headlines since the economy began to nosedive in September, administrative staffers have increasingly found themselves on the chopping block.

In December alone, major law firms have laid off at least 300 staffers -- spanning from secretaries and paralegals to marketing and technology support. Those announced cuts include 115 at Reed Smith, 90 at White & Case, 35 at Orrick, Herrington & Sutcliffe and 40 at Goulston & Storrs. Firms have quietly cut even more positions, and the layoffs show no sign of slowing down.

Law firms are looking to reduce their nonlegal head count in order to save money. Staffers traditionally have been among the first to go when the hard times hit, and it's logical to cut assistants when the attorneys they work for are let go. Experts say cutting staff can help firms boost efficiency and streamline operations.

LONG-TERM GROWTH HURT

But those who work with legal staff say firms should be cautious in their reductions and should be careful not to cut staff too deeply. Arbitrary cuts in key departments, such as marketing and technology, could ultimately hurt the firm by undermining efficiency and long-term growth plans.

Additionally, it may make financial sense to part ways with associates before certain staffers, they say. For one thing, some associates with too few billable hours are now eager to perform the tasks they once delegated to paralegals in busier times, said Chere Estrin, who owns the California-based paralegal training company Estrin LegalEd and writes a blog for paralegals called The Estrin Report.

"It's a desperate move to keep their billables up," Estrin said, noting that paralegals have told her that some associates are doing their own document reviews, deposition summaries and other research. "It's gotten worse lately, and it's not good for anyone."

It's not good for associates who are performing low-level work, and particularly not good for paralegals who find themselves without tasks to fill their workdays, Estrin said. Idle days can put paralegals on the short list to receive pink slips. Furthermore, the firm is paying associate salaries for paralegal work, as are clients, Estrin said. She suggested that firms think harder about cutting associates rather than paralegals.

Not every paralegal has down time, however. Marge Dover, executive director of the National Association of Legal Assistants, said she has heard anecdotal evidence that paralegals are working even harder as their co-workers are let go.

"Some people are taking on more work," said Dover, whose organization has not conducted any research to determine how extensive that trend is.

Reed Smith global managing partner Gregory B. Jordan said his firm trimmed administrative staff because work has slowed and because 2009 looks to be a tough year. He said Reed Smith was careful to spread its 115 staff position cuts across its U.S. offices and functional areas, including information technology, finance, marketing, practice administration, human resources and office services, in order to minimize the impact of the layoffs on firm operations.

"Our intention is not to let any of these services slip," Jordan said.

In addition to doubling up on secretaries, the firm has invested in technology that reduces the need for administrative personnel. For example, attorneys can rely on the firm's 24-hour business center in Pittsburgh, which provides services such as computer assistance and word processing.

Joseph Altonji, a consultant with Hildebrandt International, said law firm staff cuts generally fall into two categories. The first is reductions that coincide with attorney layoffs. Those cuts are not likely to have a serious negative impact on firm operations because there is simply not enough work to keep everyone busy. Indeed, many recent law firm layoff announcements have included comparable cuts in both associates and staff.

The second category is staff layoffs that don't correspond to attorney cuts. Those cuts may indicate that the firm carried over too many administrative positions from more prosperous times, Altonji said. They may also show that the firm is willing to give up some services in order to save money, he said.




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