Altman Weil Predicts More Layoffs
Summary: Management consulting firm Altman Weil believes a trend similar to the 2008-2009 mass layoffs of attorneys at law firms is about to happen again.
Altman Weil, a management consulting service for legal organizations, is warning that another wave of layoffs at law firms may be coming. The last big dump of attorneys and staff at law firms was in 2008 and 2009, but Altman Weil suspects it will happen again soon on a smaller scale.
There have already been a number of law firms announce that they were “restructuring” their firms by laying off large numbers of lawyers and staff. Reed Smith’s announcement that they were laying off 45 lawyers is just one of several similar announcements from other law firms.
Law firms are seeing a flat or declining rate of client demand compared to the number of attorneys they have waiting to get work done. Cuts were done, but they weren’t enough for the reality of the situation of the legal industry. Many law firms had hoped things would pick back up after 2009, but the demand for legal advice hasn’t.
Firms are still hiring, but not as many nonequity partners and senior counsel as before. Instead they are looking at contract lawyers and nonpartner-track staff associates. In order to keep profits up, eliminating lawyers that are not as profitable makes sense.
Not all agree with Altman Weil’s predictions though. One such dissenter is Michael Grohman, head of the New York office of Duane Morris. He views the layoffs at Reed Smith as a one-time thing that was simply to reduce their numbers, not representing a trend of the future. Grohman explains, “We’ve all been reminded that the demand for legal services has been down for quite some time, and we are all competitive with rates. There are other firms that have probably done the same thing,” but did it over months instead at one time, he said.
The future will tell what moves other law firms make and if the trend continues or not.