The Firms

March 4, 2009 6:27 PM

Orrick Leads in Percentage of Associate, Counsel Jobs Slashed

Posted by Vivia Chen

Update: Holland & Knight, number 2 in an earlier version of this post, informs us that its 70-lawyer layoff included partners and contract attorneys as well as associates--although the firm declined to provide a further breakdown of the lawyers it cut. White & Case joins the list at number 10.

This is the Top Ten list that firms don't want to make: The Am Law 100 firms who have laid off the highest percentage of their nonpartner ranks (as counted from September 30, 2008 to today). The dubious top prize goes to Orrick, Herrington & Sutcliffe, which eliminated almost 20 percent of lawyers in its associate and counsel ranks. In terms of absolute numbers, the winner--if that's the term--is Latham & Watkins, which recently sheared 190 associates. Sadly, that kind of big layoff number is beginning to lose its shock value as more and more firms jump on the layoff bandwagon in this economic meltdown.

But what's surprising about the data is that New York firms barely made the Top Ten layoff list. (Proskauer Rose, with 35 associate layoffs, was number nine; giant White & Case, with 70 cuts, squeezed into tenth place.) That's especially striking when you consider that New York sits at the epicenter of the financial meltdown, and New York firms are reputed to be tough and mean.

Why California and Midwest firms should dominate this list is anyone's guess. Could they be more business-minded--perhaps more ruthless--than Wall Street firms? "[New York firms] have a different culture and management style," says consultant Peter Zeughauser. "Layoffs are not in their DNA."

But he adds ominously: "The big boys haven't weighed in yet. Ultimately, you will see layoffs."

Firm                Number of Nonpartners Cut    % of Nonpartners Cut*

1. Orrick                               140                   19.86
2. Cooley Godward               52                   12.97
3. Bryan Cave                        58                   11.22
4. Latham & Watkins            190                   10.84
5. McDermott Will                  60                    10.64
6. Wilson Sonsini                    45                    10.09
7. O'Melveny & Myers            90                     9.53
8. Goodwin Procter                36                     7.41
9. Proskauer Rose                 35                     6.39
10. White & Case                   70                     4.00

*All percentages based on firm head counts as of September 30, 2008.

Correction: An earlier version of this story referred to associate layoffs when in fact some firms' statistics included other nonpartner layoffs, such as of counsel cuts.

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Where's Heller Ehrman on the list? They laid off 100% of associates. They King.

The suggestion that the absence of NY-based firms from the top 10 list is meaningful is misleading. Each of the firms in the top 10 have offices in NY. Potentially more telling would be an office-by-office breakdown of where associate layoffs have occurred. Surely the layoffs relate to much more than just location of the main office and take into account practice areas, overall firm size, and partner-associate ratios among other considerations.

Why the Arbitrary September 2008 cut-off?

Cadwalader laid off 100+ in late july/Early august 2008

This doesn't include unannounced layoffs, if it did Latham's total would be considerably higher.

response to W. Penn - just because a firm has an office in NY doesn't mean that it's a NY-based firm.

You're assuming that there's no correlation between the location of the main office and layoffs, even before seeing the results of any serious number-crunching. As it stands right now, the evidence points the other way.

I practice in SF and I've noticed that a lot of SF firms are poorly run. They want to compete with the big boys in NYC so they open NYC offices and pay NY salaries but they still keep their bleeding heart liberal attitudes. That was one of the major problems with Heller. They would keep 10th year associates around who were billing 1,500 hours a year just because they didn't want to ruin their office culture. These SF firms could have remained very successful if they just accepted the fact that they are CA based firms with CA clients. Instead they risked everything just to make more money and this is what happened.

BTW- I'm shocked that we haven't seen Bingham announce layoffs. They must be doing it under the table.

So let me get this straight. Why would a client want to hire a law firm that has clearly been making bad business decisions for itself and must now layoff a significant portion of its workforce? (It is easy to make money in the good times; only well-run firms make it through the tough times without having to take drastic measures.)

So glad I went to a 4th tier school. My little job with my little clients and very little overtime seems like the right choice now. Go work at home depot you overpriced sissies

Bye Bye Top-10: are you serious? Clients don't really care how law firms are run because how they are run is not necessarily indicative of the quality of their work. If anything, clients will swarm around firms doing layoffs because they know that those firms are more likely to cut billing rates, if asked. In addition, in this economy, which no one forsaw, can you really blame any business for having to do cuts? A year ago no one could have anticipated this deep of a recession and contraction in the stock market. You could have asked the 100 top economists in the country and not a single one would have predicted this.

Comment to SFanon:

Are you serious?? What you're saying is akin to voting for a President who can't manage his affairs or checkbook, for that matter.

The merged Dewey LeBoeuf (dl) shed off over 200 (and maybe as many as 350) associates since its merger, and counting... Their merger-related goal (which has almost been achieved) was to trim by 20%, and with the economy ... the actual number is on dl.

Orrick has been relying heavily on stealth layoffs. This would push their percentage cut close to 30%.

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