Legal Commentary

Associate Layoffs Beg The Question: Who Is Doing The Work

By Patrick J. Lamb

In the wake of today's announcement by Latham that it is "laying off" 190 associates, and on the heels of Black Thursday when hundreds of associates also were "laid off,"  I feel compelled to highlight three recent posts, You Are Too Efficient. You're Fired,  Hours Based Bonus + Bad Economy = Warning To Clients (Watch Your Wallet), and Average Hourly Rate or Ratio Analysis To Thwart Work Hoarding.  The moral of these posts is that law firms facing economic difficulties have an incentive to drive work up, not down.  Picture a room full of senior associates reviewing documents that used to be reviewed by contract lawyers, or a senior partner taking a deposition formerly taken by a young partner.  Law Firms will answer with the old "efficiency" argument, but it the new way is so much better than the old way, why weren't they doing it that way before?  Bottom line:  The pressure on law firms to generate revenue is greater than ever before.  The source of the revenue?  Clients.  At the same time, clients are facing unprecedented pressure to reduce legal spend.  You do the math.

By the way, I put "lay off" in quotes for a reason.  Time was the notion of "laid off" meant you would be called back after a bit.  These are not layoffs by any stretch of the imagination.  These are terminations pure and simple.  Times like these call for candor.

Full post as published by In Search of Perfect Client Service on February 27, 2009 (boomark / email).