When the economy started turning for the worse as far back as the end of 2007 and into 2008, the typical local adage was that the Philadelphia legal community was more insulated from market fluctuations than some of its counterparts in other states.
It would be tough to stick by that mantra in light of this week’s events, most of which have painted a grim portrait of the local market. The latest news comes from Dechert.
The firm began the process of letting go 125 people Thursday morning, including attorneys, other time keepers and staff.
Firm Chairman Barton J. Winokur sent out an e-mail early Thursday to the entire firm explaining that 63 attorneys and other time keepers and 62 administrative staff positions would be cut. In the e-mail, which was sent to The Legal Intelligencer , Winokur said the cuts were made in “light of the decreased market demand for legal services worldwide.”
This is the first time Dechert has announced attorney cuts outside of its U.S. offices, with the majority of all of its previous layoffs — attorneys or staff — occurring in the United States. Some of the affected people are being given notice today and the firm is beginning the required consultation process with others, Winokur said in the e-mail. The reductions will affect offices in the United States, Europe and Asia.
“Needless to say, we are taking these steps reluctantly and with great regret,” Winokur said. “None of these decisions has been made easily because we know how difficult it is to find new jobs in this challenging economic environment. We thank all these individuals for their contributions to the firm over the years.”
The latest reduction is the fifth such time since March 2008 that Dechert has let go of attorneys or staff.
The firm laid off 13 U.S. associates in its finance and real estate practice in March 2008 and then later gave that group the option of taking temporary positions in other practice groups. In December, 72 U.S. administrative positions were cut and another 15 staff positions in London were put into redundancy consultation.
In February 2009, the firm cut 19 attorneys in its U.S. offices, including associates and counsel positions. That was followed a few weeks later by word the firm cut 10 staff attorneys.
As the firm has made clear in prior reductions, a Dechert spokeswoman said, the firm continues to assess the market and work toward appropriate staffing levels.
Ward Bower of consulting firm Altman Weil said firms are really operating without a safety net, and they can’t be blamed for conducting numerous rounds of layoffs when the economy changes daily.
“I think a lot of these firms that have announced a series of cuts have done so each time hoping it’s the last,” Bower said. “What they don’t want to do is cut anymore than they have to. Nobody at this point knows where the bottom is.”
For the Philadelphia market, even some of the firms that are making strategic growth decisions are trimming back associates and staff in other areas.
The Dechert cuts come a few days after Saul Ewing said it laid off seven associates and seven staff members in a second round of layoffs because of the economy. The firm had let go of 12 staff positions earlier in the year.
Legal blog “Above the Law” reported Wednesday that Ballard Spahr Andrews & Ingersoll pushed back start dates for its incoming first-year associates to September 2010 and offered them each a $45,000 stipend for their trouble, along with a $5,000 bar stipend and a $5,500 health benefit stipend. The stipends are dependent on the associates finding other work, though it isn’t limited to the public interest sector, as other firms have required, the blog reported. The firm would neither confirm nor deny the reports.
And in news that still has the town shocked, Wolf Block’s partnership voted Monday to dissolve the 300-attorney firm. Although it wasn’t a heavy reliance on financial practices that brought the firm down, having nearly 40 percent of the firm’s revenue reliant on real estate work had a similar effect. •