The Firms

November 24, 2008 8:26 AM

Layoffs Mounting as Law Firms Struggle to Cut Costs

Posted by Ed Shanahan

The layoff toll keeps rising, and in one 24-hour stretch last week, three law firms had cut 158 attorney and staff jobs--Brown Rudnick, Mayer Brown, and Squire Sanders.

The third week of November was a particularly grim week for law firms, reports The National Law Journal. Not that the news before then was much better--over the past few months, a handful of major firms have struggled as the economy continued its tailspin. Now, not only are associates and staff members losing their jobs, but several firms are taking unique steps to reduce expenses as they head into what is expected to be an even more financially challenging new year.

DLA Piper said it would ask income partners to contribute capital into the firm to help reduce the firm's reliance on bank credit. The plan also involves reducing monthly payments to some of its top equity partners in the United States.

And announced cuts in associate pay raises and bonuses are, in part, explained as efforts to save costs, and to demonstrate to clients that law firms are willing to make tough choices. As Cravath presiding partner Evan Chesler told The Am Law Daily on Friday, the "principal driver is what's happening to our clients. Every day we're seeing them laying off people. Our conclusion was we needed to be as sensitive as we could be." Cravath is cutting bonuses by roughly half of what it paid out the last two years.

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