During the early days of this year, not a single business day would pass without the legal press parading the names of new entries to the list of firms that announced attorney layoffs. With the severe decline in the capital and equity markets and corresponding collapse of merger and acquisition, public offering, financing and litigation work, it seemed that nearly every large law firm (and many medium-size and small ones too) responded to the market decline by aggressively reducing the number of lawyers on their letterhead in order to “right size” relative to their anticipated workflows and reduce costs related to compensation. Partners, associates and staff were all subject to “downsizing” and the toll continued to grow every day.
Following layoffs, most firms went even further to try to reduce costs, recognizing that revenue would likely decline or, at very best, remain constant to the prior year, and that the only way to maintain acceptable levels of profitability was to cut costs aggressively. Thus, excess space was sublet (often at a loss), non-essential travel was reduced and items considered routine by many law firm partners — gourmet dining, lavish firm events, summer associate programs — were swiftly curtailed or eliminated.
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