Lawyers who help corporations lay off employees have been busy during the past year’s economic downturn, so you’d think that their jobs would be secure. Yet at New York’s Epstein Becker & Green, a leading employment firm, associates have been whispering that the firm’s brass recently sent a list to partners, naming associates who have fallen short of the firm’s billable hours target. “It’s kind of like a blacklist,” says one associate.

That’s news to Ronald Green, a member of the firm’s executive committee. He says that no one in management has generated any such list, and that the mysterious memorandum is probably just the standard productivity printout that every partner receives each month. In any case, he stresses that the jobs of Epstein Becker’s associates are safe. In fact, he says that the firm’s prosperity is so obvious — in August it opened an office in Houston by acquiring a 15-lawyer practice — that he sees no reason to meet with the firm’s associates to reassure them.

As Epstein Becker’s story demonstrates, managing associates and sustaining morale becomes more complicated when the economy tanks. Once a large law firm lays off associates for economic reasons, associates almost everywhere grow anxious.

Thirty-one percent of respondents to our midlevel associates survey said they were very worried about their futures, up from 26 percent a year ago. At some firms in the nation’s largest cities, 40 percent or more of respondents said they were very nervous.

Managing partners may be missing just how much layoffs spook the current generation of associates, says Austin-based management consultant Julie Eichorn. “Here is the first chance that law firms have to disprove the thinking that Generation X has of loyalty, which is, ‘You’re not loyal to me or [you don't] care about me,’” she says.

Losing an associate’s trust now could be costly in the next turn of the cycle. “You can be certain that a talent crisis will occur once the recession ends,” says Hildebrandt International consultant Kenneth Hildebrandt. He estimates that, on average, letting go of a trained associate and hiring to refill that position costs a firm $300,000. In the early ’90s, firms that were stranded without enough trained fifth- and sixth-year associates struggled to get work done, keep clients happy, and prevent overwhelmed associates from burning out.

Most leaders use passive means to deal with associate anxiety, waiting for associates to approach a partner they trust, or to relay a question through an associates committee. More aggressive approaches on the part of management include requesting that individual partners reach out to reassure associates, or having an all-associates meeting.

At New York’s Willkie Farr & Gallagher, where 42 percent of respondents to our midlevel survey said they were anxious, associates often come into the office of Steven Gartner, chairman of the firm’s professional personnel committee. This year, he says, they often ask him how the firm is doing. Because he’s not been asked about layoffs, though, he has chosen not to arrange a general meeting or issue a memo on the subject. “We haven’t had a rumor take off that we’ve needed to address, or chaos and panic in the halls,” Gartner says.

At Epstein Becker, Green says that, were he and his colleagues to mention the topic of layoffs, unbidden by associates, they could prompt fear within the ranks as much as clear the air. “I don’t believe in advancing the negative,” Green says. (His wariness toward calling a meeting is wise, says consultant Thomas Clay of Altman Weil: “You could screw that one up big-time.”)

But might associates already have fears about layoffs, and simply not be expressing them? Green says that he doubts it, given the lack of evidence of imminent layoffs: “I hope that they would have the good sense, being lawyers, to ask some questions and see if there’s some basis for their apprehensions.”

Epstein Becker associates say they do ask questions about layoffs — of each other. “It’s certainly not been a topic that’s been ignored,” reports one. The firm’s executive committee didn’t instruct partners at the firm to address layoffs if questions were to come up, and only some associates have spoken to partners about the topic.

The risk of leaving subordinates to their worries is that, when nervous, associates tend to examine the situation thoroughly. “They conjure up every conceivable problem that might be,” says Clay. At Epstein Becker, speculations are bouncing around the underground. One associate contends that management does not want to reassure the associates, because fear induces the associates to work harder: “They’re using it to their advantage,” says this associate.

In any year, at almost any firm, associates want information, to help them compete for partnership or plan an escape. This year the weak economy has stirred some firms’ associates to pose more pointed questions. “More than I have ever seen, mid- to senior-level associates are asking what partners are doing to bring in more work,” says W. Benjamin Barkley, deputy managing partner of Atlanta’s Kilpatrick Stockton. Once an associate asks a question about job security, says Clay, it’s clear what to d “Be extraordinarily honest, more honest than you ever are.”

In some cases, associates who suspect management’s motives may be correct. The firm’s commanders may believe that losing associates is a cost they can bear. Behind closed doors, says consultant Peter Zeughauser, “what you hear from management is that the good performers work harder in the anxious times. The view of associates with their hours down is, ‘They kind of don’t belong here. Get them out.’”

When firms are serious about hanging on to their associates, their leaders sometimes hit the road to deliver their message. In July and August, Kenneth Chernof, chair of the professional recruiting and development committee at San Francisco’s Heller Ehrman White & McAuliffe, traveled to 12 different Heller offices for rap sessions with associates. Chernof says that giving associates an explicit opportunity to comment helps convince them that the firm’s intentions are honorable. “They want to be able to balance and weigh the world around them for themselves,” Chernof says.

Like Chernof, Kilpatrick’s Barkley toured his firm’s offices in August, to update partners and associates about financial performance and prospects. Recently he also began guaranteeing a response within 24 hours to questions that associates e-mail him. And he says the firm is considering paying for a financial planner to consult with associates about their personal stock portfolios.

A firm leader who opens up communication does need periodically to recall that associates and management occupy different roles. At Heller the associates asked Chernof to tell them which lateral partners were being wooed from other firms — the arrival of lateral partners, after all, has a great impact on their own volume of business and partnership chances. Chernof said that such information was too sensitive to share. Occasionally, an open door still must close.

Related chart: Least/Most Anxious Midlevels


In most cases, our midlevel survey found that the degree of midlevel anxiety at a firm corresponded inversely to the amount of management openness about finances and strategy. The less open associates regarded the firm as being, the more anxious they said they were, and vice versa. “Lawyers must have a reason for working so hard for clients,” says consultant William Cobb. “If lawyers perceive themselves as simply cogs in the wheel, they will bolt at the first wave of adversity.”

But there were exceptions. Midlevels at highly prestigious shops reported relatively little anxiety, despite a lack of management openness. Respondents at New York’s Wachtell, Lipton, Rosen & Katz, for instance, ranked the firm 98th (out of 132) on straight talk about money and the future, but attested that they were the 15th-least fretful group. Similarly; Washington, D.C.’s Williams & Connolly ranked 116th on openness, but its associates were the 13th-least anxious.

Other factors that influenced associates’ levels of anxiety were location, financial issues, and a firm’s practice mix. At Boston’s Hale and Dorr, for instance, associates put the firm in a tie for 11th place in the category of openness about finances and strategy, but the firm had some of the survey’s most anxious associates, in 108th place. Washington, D.C.’s Hogan & Hartson tied Hale and Dorr as the 11th-most open firm, but finished just behind it in the anxiety category, in 111th place. Possible reasons: Both firms have heavily invested in their technology practices and are based in highly competitive legal markets.

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