You need to keep the unpleasant possibility of lay-offs in the back of your mind, for it has become a very relevant possibility whether you are a partner or an associate. In fact, the larger your firm and the more practice areas it offers, the greater the lay-off danger, especially if each practice specialty is considered its own profit center. We'll tell you how to spot the signs of pending lay-offs in a moment, but first, a little legal cultural history is in order, as it will place the specter of law firm lay-offs in context for you.
|NIPP (Average partner income)||L (Ratio of associates to partners)|
|BR (Blended hourly rate)||U (Client hours recorded)|
|R (Revenues divided by time recorded)||M (Partners' profits divided by revenues)|
|Problem Detection and Deciding What to do
Once it is determined that a firm has a financial problem, the management committee must decide how to fix the problem. Two to three meetings required.
|Two to six weeks|
|Implementation of Preliminary Measures
If the hemorrhaging can be contained by cutting back on non-personnel expenses, you have nothing to worry about. (WARNING: Don't be misled if there is a series of cuts and then a lull. The plan may be designed to take place in steps, with a pause after each step to determine if it is necessary to proceed to the next step, each new step being more severe than the previous one. By the time you and your cohorts figure this out, it may be too late.
|Preliminary Measures Don't Work.
Panic sets in slowly and then crests.
|Beginning of third month|
|Emergency Meetings. Lay-offs Approved. "Need-to-know" Partners notified of plans.
|Lay-offs Begin||Fifth month or soon after|
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