The law firm layoffs haven’t let up.
Four major firms announced job cuts on Monday, totaling more than 300 attorneys and 522 support staff.
White & Case plans to cut a total of 200 associates and 200 administrative staff. Morgan, Lewis & Bockius cut 55 attorneys and 161 staffers. King & Spalding cut 37 associate spots, as well as 85 support staff firmwide, while K&L Gates eliminated 36 associates and 76 staffers in its U.S. offices.
Just over a week into March, it appears that the month won’t provide any reprieve from the mounting legal job losses. According to the U.S. Department of Labor’s Bureau of Labor Statistics, the legal sector lost 4,200 jobs in February and 1,300 in January.
Several legal consultants said they don’t see the job cuts slowing down any time soon. Peter Zeughauser, a consultant based in California, said the layoff pain will last at least until the fourth quarter of 2009. William Brennan, a legal consultant with Altman Weil, said some law firms had held back on cuts, hoping to weather the storm.
“Many firms have been waiting, with hope, that they would be able to get through this without having to terminate employees,” Brennan said. “But they keep seeing a slide in the economy, and they have to make adjustments.” While layoffs are painful for any law firm, they may well be the thing that keeps the firm viable right now, he said. Brennan noted that the onslaught of layoffs has taken a psychological toll on the legal industry, which was once seen as very stable and lucrative place to be.
“The problem is that lawyers have never seen this type of pain before,” Brennan said. “The layoffs have shocked many partners and created a tremendous amount of anxiety.”
White & Case also announced that the firm is evaluating its partnership, “which will result in a reduction in the number of partners, commensurate with current and anticipated business needs.”
The news also is bad for those about to join the firm: White & Case says it will be “deferring the start date of approximately 60 percent of this year’s incoming associate class in the U.S. until 2010.”
Morgan Lewis Chairman Francis M. Milone informed the firm of the cuts in an e-mail on Monday, in which he wrote that Morgan Lewis had delayed layoffs for as long as it could.
“Unfortunately, we have reached the point where we believe that the greatest good for the greatest number of our colleagues will be achieved by eliminating some positions and bringing our overall numbers more in line with the realities of the present economic environment and what we believe will be the expectations of our clients in the future,” he wrote.
A spokeswoman for Morgan Lewis declined to comment on which practice areas or offices were hit hardest by the job cuts. The firm planned an internal video presentation on Tuesday to discuss the layoffs.
In addition to layoffs, Morgan Lewis is making some significant changes with its incoming associate and summer 2009 classes. The law firm will delay start dates for incoming first-year associates for about a year — until October 2010, wrote firmwide hiring partner Eric Kraeutler in a letter. During that time, incoming associates who choose to work at a public interest law organization will receive a $5,000 monthly stipend from the firm. The result of that delay means that Morgan Lewis won’t have a 2009 associate class.
Additionally, the delayed start dates will have an impact on the incoming 2009 summer class.
The firm informed those summer associates that it still plans to hold the program and will offer the usual number of permanent positions, but start dates will likely change down the line.
“However, because we are deferring the start date for our 2009 first year class, the offers we make to the individuals participating in our 2009 summer program likely will be for a start date during 2011, rather than the fall of 2010,” Kraeutler wrote. “We intend to offer a public interest option, similar to that announced today, for those of you who are affected by this deferred start date.”
King & Spalding’s chairman, Robert D. Hays Jr., noted in a statement, “[w]hile we have been working hard in many different ways to manage the firm to respond to the reduction in demand, the continuing decline in the U.S. and global economies has unfortunately made it necessary for us to make some reductions in our lawyer and staff ranks.”
The cuts constituted 4.2 percent of the firm’s 875 lawyers — and 6.4 percent of its nonpartners.
King & Spalding has 384 associates firmwide, with 165 in Atlanta, according to its Web site.
According to K&L Gates Chairman Peter J. Kalis‘ note, the U.S. and U.K. layoffs represent nearly 5 percent of the firm’s associate force, and about 4 percent of support staff. Through a spokesman, Kalis declined a request to offer more specific information on the offices and practice areas affected by the job cuts.
“As with other enterprises adjusting to the global economic downturn, including dozens of major law firms, we have had to adopt measures to strike a balance between the size of our workforce and the demand for certain of our services,” Kalis wrote.
K&L Gate’s cuts are fairly modest compared with other recent law firm layoffs. In the past two weeks, Latham & Watkins trimmed its head count by 190 attorneys and 250 staffers, and Orrick, Herrington & Sutcliffe laid off 100 attorneys and 200 staffers. O’Melveny & Myers let go of 90 attorneys and 110 staffers.
Additionally, this is K&L Gate’s first major layoff since the financial crisis last fall. Several firms have made multiple cuts in that same time. Despite the reductions, Kalis wrote in his message that the firm is well positioned to weather the down economy.
“As for the firm at large, our conservative management, global positioning, and diversification across clients, industries and practices endow the firm with a resilience that serves us well in these challenging times,” Kalis wrote. “We intend to remain an industry leader in 2009 and beyond, and the decisions announced today should be seen in that light.”
The Fulton County Daily Report and The American Lawyer contributed to this report.
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