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Two of the nation’s top-grossing law firms reduced associate ranks in their Los Angeles offices in October. Dallas-based Akin Gump Strauss Hauer & Feld trimmed associate ranks by 12 attorneys last week. And, according to attorneys at New York-based Skadden, Arps, Slate, Meagher & Flom, a handful of corporate associates at the firm’s L.A. office were terminated earlier in October. The Los Angeles legal market has fared better than its northern cousin during the economic downturn. While San Francisco Bay Area law firms with Internet- and technology-focused practices laid off associates during the past year as profits have plummeted, Los Angeles law firms have generally appeared to be in healthier financial shape. But the recent moves by Akin Gump and Skadden Arps indicate corporate practices are hurting in Los Angeles as well. “The economy is pretty sluggish, and in the transactional practices it’s clearly going to stay that way for some time,” said David Allen, the managing partner of Akin Gump’s 120-lawyer L.A. office. According to Allen, the layoffs of corporate attorneys were undertaken to improve the firm’s profitability in light of the sluggish corporate sector. “It’s a reduction in force given the work levels we had in transactional practices. It is not a reflection of the individuals,” said Allen. Attorneys at Skadden Arps’ L.A. office reported that four corporate associates had been terminated and one had been transferred to a different office. Rand April, the managing partner of Skadden Arps’ L.A. office, called those numbers overstated, saying that a fewer number were let go and a greater number were transferred. “I would characterize it as an attempt to bring our staffing in line with our normal ratio where we’re busy,” said April. Currently, he said, the L.A. office is significantly in excess of its normal ratio of three to four associates for every partner. Thanks in part to its large corporate practice, Skadden Arps was the highest grossing law firm in the nation last year, with revenues of $1.225 billion and average profits per partner of $1.5 million. The L.A. office has 140 attorneys, with more than half dedicated to transactional work. “I think firms in L.A. are clearly doing better than the firms up north, but the sluggishness in the corporate practice is something that’s nationwide at this point,” said Rand. Akin Gump, which netted $553 million in revenues last year with average profits per partner of $670,000, has more than 900 attorneys nationwide. In addition to the firm’s traditional practice mix of corporate, litigation, real estate and labor and employment law, the L.A. office has a large entertainment practice. In 2000, the firm doubled the size of its L.A. office through a merger with Troop Steuber Pasich Reddick & Tobey. According to Akin Gump’s Allen, the recent layoffs were not related to the 2000 merger. “We did the merger long before the economy fell out,” he said. Allen said the terminated associates all received “substantial” severance packages that include salary, health benefits and career counseling. He declined to state exactly how many months worth of salary the associate’s severance pay included.

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