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February 17, 2009 10:56 AM

Reflections on Black Thursday and a Look into the Future

Posted by Zach Lowe

By now, we all know what happened on Black Thursday--more than 700 jobs lost at major firms, and 400 more layoffs confirmed by the close of business on Friday. The National Law Journal and the Legal Times, both Am Law Daily sibling publications, tracked down consultants, firm chairmen, and other experts in search of insight about why so many layoffs happened at once and what the next few months might have in store for the Am Law world.

In the NLJ, consultants and firm higher-ups debunk the idea that firms got together and decided to coordinate layoffs on Thursday, thereby deflecting some of the attention from each individual firm. More likely, by Thursday the firms had had enough time to examine their January financials--including some of their billing receipts for late 2008--and didn't see their fiscal outlook improving.

The Legal Times found some experts who believe the lukewarm reception on Wall Street to President Barack Obama's stimulus package may have convinced firm execs that 2009 is going to be even uglier than 2008. And New York-based law firm consultant Jerry Kowalski told the Legal Times he doesn't think the bloodbath is over. Indeed, Kowalski told the paper he expects Black Thursday "to accelerate the decision by other law firms to lay people off."

Some aren't quite so pessimistic. Ward Bower of Altman Weil, for example, told the NLJ that firms might delay further layoffs to see whether the stimulus does in fact kick-start the economy.

One interesting tidbit from the LT story: the paper calculated that last week's layoffs cut a combined $100 million in costs, meaning firms should enjoy substantial savings even if they hand out relatively generous two- and three-month severance packages. 

Meanwhile, the layoff march continues in the U.K. according to Legal Week, another Am Law Daily sibling publication. The paper reported Monday that as many as 100 lawyers at Linklaters will lose their jobs this week upon the completion of a redundancy study that began in January. Not surprisingly, practices tied to financial markets will be the hardest hit, the paper says.

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