Seyfarth Shaw offices in Washington, D.C. September 15, 2016. Photo: Diego M. Radzinschi/ALM (Diego M. Radzinschi)
Seyfarth Shaw is laying off a substantial number of lawyers and staff members following soft demand in the first quarter.
Above the Law first reported Tuesday afternoon on the reductions, which it said involved at least 40 lawyers and staffers. They come on the heels of a strong 2016 for the Chicago-based firm, which pioneered the use of Lean Six Sigma business methods in the law. Seyfarth’s gross revenue rose 6 percent last year, to $623.5 million, while profits per partner rose 3 percent, to $1.05 million.
Two sources who spoke with The American Lawyer confirmed that layoffs occurred and that Seyfarth’s first quarter revenue came in below the firm’s expectations. A third source said that billable hours were “soft” in the first quarter for a number of large firms.
In a statement provided by a spokesman and attributed to Seyfarth’s chairman and managing partner Peter Miller, the firm cited “a shifting market for legal services” as necessitating measures to manage its business effectively and serve its clients.
“We’ve recently completed a careful review of our business to maximize performance and best serve our clients, while continuing to execute our growth plans,” Miller said. “To meet those objectives, we have made the difficult yet necessary decision that some individuals, both lawyers and staff, will be leaving the firm. We are grateful for the contributions of those impacted, appreciate their service and are working to ensure their transitions are as smooth as possible.”
Miller’s statement did not confirm the number of layoffs—and a Seyfarth spokesman did not immediately provide a number when asked—but the firm’s leader did state in his prepared remarks that Seyfarth “remains strong, focused and growth-oriented as we approach the midpoint of the year.”
Stephen Poor, Seyfarth’s chair emeritus, had warned last year that raising associate salaries would lead to layoffs. After briefly resisting raising salaries in major markets to meet the new market norms, Seyfarth eventually acquiesced to the payouts.
“For firms that have been on cost-reduction efforts since 2008, the easy gains are now gone,” Poor wrote in a June 2016 piece for Bloomberg Big Law Business. “Finding off-setting levels of cost savings is simply not realistic for them.”
At the same time, Seyfarth’s head count uncharacteristically grew last year by 6.1 percent, to 847 lawyers, according to The Am Law 100 rankings. The layoffs come a little after a year into the chairmanship of Miller, a Chicago-based partner who spent years as the firm’s managing partner before taking the leadership reins from Poor on April 1, 2016.
Poor spoke in February about Seyfarth’s plan to use “software robots” in order to improve efficiency. The firm, known for its labor and employment roots, bolted on a Washington, D.C.-based intellectual property boutique last fall and recently opened an office in Hong Kong. Seyfarth slashed at least 30 lawyers and staff during a nationwide law firm layoff binge nearly a decade ago.