December 15, 2008 6:46 PM

Associate Layoffs at Wolf Block, Drinker Biddle

Posted by Ed Shanahan

By Gina Passarella of The Legal Intelligencer

Move over New York, it's Philadelphia's turn in the hot seat.

Legal blog Above the Law was abuzz with reports and rumors Monday that two Philadelphia firms have layed off lawyers, and one of the two also has cut staff. Wolf Block has laid off 15 associates and staff, and Drinker Biddle & Reath cut 20 or fewer attorneys on Friday, according to ATL.

Rumors circulated late last week that Wolf Block suggested to some attorneys that they look for other positions. It is unclear if those rumors are directly related to the layoffs reported today on Above the Law.

Drinker Biddle spokesman John Byrne says the firm, as a matter of policy, does not comment on personnel matters.

For 300-lawyer Wolf Block, the reported layoffs come months after its merger talks with Florida-based Akerman Senterfitt broke down in September over what both firms described as conflict issues. Wolf Block also had decided to delay the start date for its incoming first-year class this fall. When the merger talks ended, firm chair Mark Alderman told the Intelligencer the firm wasn't necessarily looking to cut any attorneys but would not as readily fill vacancies.

Alderman did not return a call for comment. A Wolf Block spokesperson declined to provide a breakdown of associates and staff, but said the total number reported on Above the Law is accurate.

Most layoffs in the Pennsylvania market have affected staff, but consultants have said the real savings to the bottom line is in attorney cuts. According to one consultant, the Pennsylvania market likely can expect more attorney cuts in the New Year as firms wait out the holiday season.

Ward Bower of Altman Weil says with many staff cuts already done the next round of layoffs--possibly in the first quarter of 2009--will involve attorneys and some additional staff.

Associate layoffs most likely will occur in January and February in part because of performance reviews at the end of calendar fiscal years, Bower says. But the larger reason for the delay is the holiday season. He doesn't believe firms are using performance reviews as an excuse to make larger-than-normal cuts. Still, while some of the cuts will be over performance issues, most will be because of the economy, Bower says.

"Firms are not adverse to calling an economic cut by its true name," he says. "That was not the case in 2001, but very clearly now I think that everybody is a lot more honest about these things."

While Pennsylvania has been more insulated than markets like New York, London, or California, Bower believes the economic crisis has started to spread beyond Wall Street.

The above is an excerpt of a report from The Legal Intelligencer.

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