Law firm layoffs in August were even scarcer than expected, although we’ve been predicting for a while that it’s just the eye of the storm.
The month set records (in a good way) in every major category: fewest total layoffs, layoffs of lawyers, layoff of legal staff, firms laying people off, etc.
Most notably, for the first time since December 2008, there was a week without a layoff.
Still, the news isn’t all good. As we’ve summarized in the weekly reports, unemployment is still at record levels. In fact, the August numbers ended up being way worse than expected, although some government-friendly outlets seem determined to put lipstick on this pig, no matter what the data say.
But this is the Month in Layoffs – August, so we’ll leave the editorializing for the weekly column. After the jump, the pretty charts to put the data in context.
The chart of layoffs by month this year shows pretty clearly how layoffs have dropped off a cliff since the first quarter.
It’s also interesting to note the climb through the first quarter, then April (1,148) and May (1,085) were relatively close to each other, but just about 30% of March. June (508) and July (604) were again relatively close to each other, but were about half of the previous months. In effect, there has been a step-down trend since March.
We expect that trend to end pretty quickly, though. We’re predicting September numbers will be back up in that June/July range.
The next chart shows a trend that the lawyers in our audience will find particularly alarming.
That’s the trend of the percentage of layoffs that lawyers and staff, respectively, constitute. August, while having an extremely low sample size, was the month in which lawyers comprised the greatest percentage of layoffs all year. More important is noticing the trend, which, helpfully, makes sense logically. Staff constituted an increasing percentage of layoffs through June, but seem to have peaked. Staff hiring has also frozen.
Attorneys have both factors working against them. Firms “tried harder” to retain lawyers, for various reasons, in no small part because they’re perceived as more-difficult to replace. But with the staff layoff ranks having been cut to the bone, those firms that still need to reduce costs are being forced to turn to the attorneys. Plus, despite all the deferrals, canceled summer programs, reduced offers and the like, firms are still bringing in new lawyers, which means something has to give.
To date, legal staff account for 7,043 of the 11,451 total law firm layoffs this year, or 61.51%. The heavy weights of the first quarter are preventing a lot of momentum in the overall allocation, but the trend is clearly skewing toward increasing layoffs of lawyers.
Still, as far as layoffs go, August was the best month so far. Hopefully, everyone enjoyed it while it lasted.
The weekly summaries for the month are:
126 layoffs for the month, 58 lawyers, 68 staff.
11,451 layoffs by major law firms so far in calendar 2009, of which 4,408 were lawyers and 7,043 were staff.
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congratulations! your parents must be so proud
Maybe the trend in fewer layoffs can be attributed to the fact that firms have spent the last couple of months "laying off" employees who wouldn't be counted as such — i.e. revoked offers to incoming first year associates and no-offers to summer associates.
That's definitely one factor, but it just means they'll end up top-heavy – and then in a few years when things turn around, they'll have no mid-level and senior (depending on how long it takes) associates who can lawyer their ways out of a paper bag. That's why associates from classes around 97-98 got so much experience – layoffs in 94-95 meant second and third years in 99-2000 when things started booming had to run their own deals.
Summer is also just a quieter time for a whole bunch of reasons, not least of which is vacation plans. It's also awful for collections, so that's not helping anyone who was waiting for cash flow to pick up like the markets have.
Okay so big law isn't laying people off at such a high rate right now…but as a 2L law review member, top 5% in my class, I can tell you that the outlook for 2Ls still sucks. We are truly the lost class. I'm top 5% and have gotten no call-backs from 7 biglaw firms I have on-campus interviewed with (and I'm not socially inept or a freak!). I haven't even been given the courtesy of a response either way from two biglaw firms and it's been a month. For future proof of the horrible outlook for my poor lost class, the number 2 ranked girl in my class also received zero call-backs.
I was however offered a great summer associate position at a medium sized firm (about 50 attorneys) in a medium-sized city and accepted that offer today, but I'm one of very few who even has that.
No offense, but this is completely unhelpful without some indication of where you go to school (T14? Probably not … T50 at least?)
You can be a 2L law review member in the top 5% of your class at Golden Gate University Law School and would be in the same situation no matter what the state of the economy.
guest (the lower case one) – are you top 5% in your class?