The Project for Attorney Retention has argued for months that having attorneys work reduced hours makes better business sense than layoffs, and now the group says it has the numbers to prove it.

According to the PAR's latest analysis, reducing associate working hours -- and their salary in accordance -- actually will save a firm more money than cutting associate jobs.

"Layoffs and flexible downsizing are two models for matching supply and demand when there is not enough work to keep everyone busy," said PAR Co-Director Joan Williams. "Our analysis shows that flexible downsizing with balanced hours may save as much or more than layoffs. Flexible downsizing also helps firms retain their investment in high-performing attorneys and avoid certain legal risks."

PAR is part of the Center of WorkLife Law at the University of California Hastings College of the Law in San Francisco, and it advocates for reduced hours as a way for law firms to retain attorneys, particularly women and minorities.

The group's argument centers on the idea that layoffs are costly and can lead to lower overall billable hours. Additionally, reduced hours give firms more flexibility to respond to changing workloads without going through the expensive hiring process when business picks up.

The scenario that PAR examines in its analysis is a law firm practice group with six associates who each make a $200,000 salary. Taking into account the associates' salary and benefits as well as three month of severance and outplacement assistance, the firm stands to save about $211,000 by laying off one associate. But if those six associates reduced their schedules and compensation by 20 percent, the firm would save $240,000, and would be able to reinstate full hours if work picked up for the practice area.

The rationale behind firm layoffs is that the work handled by laid-off attorneys will be transferred to remaining attorneys, and will fill out their workdays. But PAR argues that because not every attorney has the same skill set, a certain portion of the laid-off attorney's work will not transfer to the remaining attorneys. According to PAR, it is reasonable to assume that if a laid-off attorney was billing 1,500 hours annually, only 1,200 of those hours would actually transfer over, leaving the firm with a 20 percent billing loss.

Having attorneys work reduced hours also has benefits that go beyond simple dollars, according to PAR's analysis. Layoffs take a toll on employee morale, and take a lot of administrative time to execute.

In the past, legal experts have said that it would be difficult to persuade associates to accept reduced hours because they fear such an arrangement would hinder their careers. PAR said that firms would need to eliminate any stigma attached to reduced hours in order to make such a program successful.