Law Firms

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As several law firms announced layoffs this week, consultants warned of more bloodletting ahead. One consultant spoke of overcapacity among nonequity partners. Others said staff members are at risk as lawyers working at home are becoming more self-sufficient.

Law.com and Law360 have stories.

Altman Weil principal Eric Seeger told Law.com that he has spoken with about three dozen managing partners in the last month, and all are reviewing staffing “with the intention of a head count reduction.”

Another consultant, Peter Zeughauser of the Zeughauser Group, told Law360 that law firms are moving resources to strong practice areas and cutting in areas of underproductivity. The thinking at law firms, he said, is “they might as well take their medicine now since the partners are already expecting a tough year.”

The goal of slimming down is to protect compensation of rainmaking partners and prevent their poaching, according to Law.com.

The latest law firm to announce layoffs is Skadden, Arps, Slate, Meagher & Flom, report Above the Law and Law.com. The firm is laying off just under 4% of its professional staff across its U.S. offices, a spokesperson said Thursday.

Above the Law also reported Thursday that Nixon Peabody plans to lay off some furloughed staff members, even as other furloughed staffers and lawyers were returning to work. The plans were revealed in a confidential memo that also announced that full salaries would be restored for many staff members.

Three other law firms also announced layoffs this week. They are:

• Baker McKenzie is laying off 6% of its workforce in the United States, Canada and Mexico. Those laid off include lawyers, other timekeepers and business professionals. (Law.com, Bloomberg Law, Above the Law, Thomson Reuters Legal)

• Davis Wright is laying off 39 staff members who had been furloughed. The staff members were in office services, legal assistance and other administrative positions. (Law.com, Bloomberg Law, Thomson Reuters Legal)

• Venable is laying off some furloughed employees, as well as some other professional staff members. The firm did not disclose numbers. (Above the Law)

Some consultants said the cuts are long overdue.

“Law firms had more staff than they needed even prior to COVID,” Seeger told Law.com. It’s an “appropriate business reaction.”