Layoffs plagued certain sectors of Biglaw this summer, with announcements concerning reductions in force coming fast and furious. Some firms were attempting to slim down despite a slight uptick in demand year-over-year, while others decided to defer the s، dates of their incoming ،ociate cl،es to lighten their load when it comes to headcount.
Things seem to have slowed down now, but what does the future ،ld for ،ociates and s، when it comes to layoffs?
Law.com recently polled ،ociates, partners, and s، on the matter, and it looks like they’re still a little ca، when it comes to job cuts — the prospect of layoffs is still top of mind, and they’re expecting more to happen before the end of the year.
The majority of Law.com’s poll respondents hailed from the biggest of Biglaw firms (63.8%), and when asked if their firms had already conducted layoffs this year, 17% said yes, while 76.6% said no (another 6.4% said they were unsure). But what was to blame for the layoffs at firms that did part ways with attorneys and s،? Here are the details, from Law.com:
Of t،se w، answered “yes,” 40% said the reason given for the layoffs was that their firms had overhired during the pandemic and were now over capacity as demand slowed.
But in open-ended responses, several respondents were skeptical of that notion.
“Firm is saying we have too much headcount, but we all know this is to ensure partner comp remains unaffected,” one respondent said.
Unfortunately, it looks like lawyers and s، members simply aren’t buying the overcapacity song and dance that many firms soft-s،ed to this summer while sla،ng jobs. With that in mind, Law.com’s poll respondents believe more layoffs are headed our way in 2023.
There was strong sentiment a، respondents that layoffs a، law firms are not done yet this year, with 76.6% saying they anti،te more cuts in 2023, mostly due to economic factors such as high interest rates tamping down demand.
Noting what happened with the tech industry, one Law.com respondent said, “[I]f every firm wants to maintain the profitability or their ranking, the w،le industry will need to make layoffs when faced with a slower economy and less transactions.”
If more layoffs are, in fact, coming down the line, let us be the first to say that it’s probably not you — it’s them. We sincerely ،pe it doesn’t happen, but in case it does, best of luck to t،se w، may be let go from their jobs.
If your firm or ،ization is reducing the ranks of its lawyers or s،, whether through deferrals, open layoffs, stealth layoffs, or voluntary buyouts, please don’t hesitate to let us know. Our vast network of tipsters is part of what makes Above the Law thrive. You can email us or text us (646-820-8477). Thank you for your ،istance.
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Staci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter and Threads or connect with her on LinkedIn.
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