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Recession Fears Have Attorneys Asking, ''Am I Next?'': Attorney Layoffs in the Midst of Recession Fears and the Attorney Jobs Outlook for 2008
by Carina Zaragoza
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Indeed, as a writer, I myself have mulled over that question as well, wondering, "Am I going to be fired?" It's hard to go in to work every day with this proverbial monkey on my back. When articles can be purchased for a dime a dozen overseas, I often wonder if I went into the right line of work.
But as the market has shown, virtually no job is safe. Even cushy attorney jobs are vulnerable.
Layoffs in the Legal Sector: Law Firms Conduct Layoffs of Attorneys
Just a couple of weeks ago, Thelen, Reid, Brown, Raysman & Steiner cut staff and attorneys across its nine offices. Twenty-six associates and 85 staff members were let go. Co-chairman Stephen O'Neal attributed the layoffs to "recessionary pressures." Despite a nearly 50% increase in revenue following the merger of San Francisco-based Thelen, Reid & Priest with New York-based Brown, Raysman, Millstein, Felder & Steiner in 2006, the firm witnessed a 4% drop in profits per partner last year. The layoffs of both junior and senior associates were made in the firm's business, finance, litigation, and construction practices.
Earlier this year, Dechert announced the layoffs of 13 associates in its finance and real estate practices. The layoffs came after a record year for Dechert with $836 million in gross revenue. Its partners averaged $2.3 million in profits. Because the layoffs constituted less than 10% of the firm's attorneys, industry analysts believe there are no larger issues at the firm.
Thacher Proffitt, Cadwalader, Wickersham & Taft, and Clifford Chance have also reported associate layoffs.
How to Determine Whether You Are The Next Attorney Who Will Be Laid Off
Ben Hallman, of The American Lawyer, argues that "your place in the firm hierarchy" will determine whether you're indispensable or dead weight. Though consulting firm Hildebrandt International Inc. and Citigroup Private Bank have said 2008 is "shaping up to be the worst [for law firms] since 2001," Hallman and The American Lawyer have found that some sectors within the legal profession are expecting harder hits than others.
There is no doubt about which practice areas are threatened: structured finance, real estate, mergers and acquisitions, and private equity. But even within these vulnerable areas, associates, partners, and firm managers have varied recession fears, if they have any at all.
Associates may have reason to panic if their firms are keeping them in the dark. Yet the lateral market is surprisingly strong, and many young lawyers who were laid off recently are finding new jobs quickly. Still, associates are nervous and don't know how long their jobs might last. One associate at a New York law firm admits he's nervous and is well aware that his firm is anticipating a downturn.
Partners and law firm managers insist their firms are positioned to weather the economic storm. Some are clearly 100% secure with their positions and are finding new ways to rework their practice areas and continue to serve their clients. Some are being creative and are finding opportunities amidst the industry-wide downturn.
Consultants and industry analysts expect good performers to find work regardless of practice area. In fact, some talented associates and partners may become dissatisfied with their firm's performance and decide to make a lateral move. This in turn plays into the hands of legal recruiters, who may very well see an increase in business this year due to the turmoil and industry shake-up.
Attorneys Should Stay Apprised of the Legal Job Market
Despite the well-covered layoffs of major firms, the first quarter has seen those who have been laid off find new jobs quickly. There are opportunities, whether they're lateral moves or simply the results of being creative within your firm and practice area. Continually monitor the market by scanning sources such as the Wall Street Journal and keep up to date on industry news and happenings. While you may not have control over outside economic forces, you do have control over your reaction to the crisis and your marketability in the industry.
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Thelen Reid Brown Raysman & Steiner, LLP
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