The Year in Law Firm Layoffs – 2009

by lawshucks on January 3, 2010

2009 will go down as the worst year ever for law-firm layoffs. More people were laid off by more firms than had been reported for all previous years combined.

Eight years ago, the vast majority of the legal market turned up their noses at firms like Shearman & Sterling, Pillsbury Winthrop, and Clifford Chance when they laid people off.

That stigma is long gone. As we showed earlier this year, layoffs hit firms from top to bottom in the Vault 100.

After the jump, the final figures for the year.





Cutting right to the chase: we tracked 12,196 people laid off by major firms in 2009, of which 4,633 were lawyers and 7,563 were staff. Make sure to check the tracker for the methodology – and we’re aware that layoffs are severely underreported, a trend that increased as the year went on. All of this information comes from aggregating reports of layoffs published in the media or when we break the story ourselves, so you can go to the tracker to find the original source material. If you have a comment on how we categorized something, let us know.

All told, we tracked 218 reports of layoffs at 138 law firms in 2009. Clifford Chance led the way, with an astonishing 10 different events reported. DLA Piper had seven, Baker & McKenzie six, and Cadwalader, Dechert and Faegre & Benson each had four. Twelve other firms had three and 27 had two, leaving 93 firms that had a single round of layoffs reported.

This year’s story was largely written by the end of March, when 63% of the year’s total layoffs had happened, as we noted in our mid-year review. The pace has slowed even further since. Eighty-eight percent had been done by mid-year, leaving “just” 1,473 layoffs for the last six months of the year – four fewer than in a single week in March.

The monthly charts show just how precipitously the pace dropped off (click for larger).

The scale on that is daunting, so here are just the last six months.

The next chart shows the months’ relative totals (legend at the bottom, but read clockwise starting with January at noon, so March is about 4:00 to 8:00).

Further reinforcing the notion that law firms moved in a pack, all 10 of the worst days for lawyer layoffs were in the first quarter, five were in the first two weeks of March alone.

Here are the top 10 firms based on total layoffs in 2009. (Note: these charts vary slightly from the regular Top 10 lists, which are always available and automatically updated, because these are filtered for 2009 layoffs only).

And here they are based just on number of lawyers laid off in the year.

Not surprisingly, the largest firms account for the vast majority of layoffs. (And don’t forget, we only track layoffs at major firms – see our methodology) Since we broke down the layoffs against the Global 100 back in July, this time we take a look at just the US side of things.

All told, 76 firms in the AmLaw 100 laid people off this year, and those 76 firms laid off 8,496 people (3,222 lawyers, 5,274 staff). The biggest cut was DLA Piper’s 526 (168 lawyers, 358 staff – and another aside, we can only count DLA Piper on a global basis, but its AmLaw ranking is based just on US operations) down to Haynes & Boone’s three (one lawyer, two staff). The cuts here went literally from top (#1 Skadden laid off 80 staff attorneys) to bottom (#100 Kilpatrick Stockton laid off 24 lawyers).

Layoffs in the AmLaw 100 (Top 10)
1 Skadden 80 80
2 Baker & McKenzie 323 120 203
3 Latham & Watkins 440 190 250
4 Jones Day
5 Sidley Austin 229 89 140
6 White & Case 409 209 200
7 Kirkland & Ellis 155 75 80
8 Mayer Brown 202 80 122
9 Weil Gotshal 106 16 90
10 Greenberg Traurig
TOTAL 1,944 779 1,165

The top 10 of the AmLaw 100 account for 15.94% of the total layoffs in 2009.

As we constantly report in the “This Week in Layoffs” series, US unemployment is likely to hover in the 10+% range for the near future and there isn’t a whole lot of reason to believe that firms will be staffing up to 2007 levels any time soon. To the contrary, we expect a particularly aggressive round of performance-related (a/k/a “stealth”) layoffs in the coming months as annual-review season heats up. Still, some firms may have weathered the storm: bonuses have been reported at almost two dozen firms.

Finally, our profound thanks to the following sources which have done the yeoman’s work of reporting and verifying the stories (and, for the hell of it, we counted up how many stories they broke):

And, of course, thanks to all of you for your support. It’s been an amazing first year (about which, more later).

More importantly, keep an eye out for some very cool projects we’ve got planned for 2010.

Tagged as: baker & mckenzie, cadwalader, clifford chance, dechert, dla piper, faegre & benson, greenberg traurig, jones day, kilpatrick stockton, kirkland & ellis, latham & watkins, layoffs, mayer brown, sidley, skadden, the month in layoffs, weil gotshal, white & case

  • Mike

    The following excerpt from the post above could benefit from some additional perspective not provided: "All told, we tracked 218 reports of layoffs at 138 law firms in 2009. Clifford Chance led the way, with an astonishing 10 different events reported. DLA Piper had seven, Baker & McKenzie six, and Cadwalader, Dechert and Faegre & Benson each had four."

    Cadwalader, it should be noted, has just five offices, and only two of them are outside the US. In contrast, Clifford Chance can be found in 20 *countries*, with just two of its offices located in the US. DLA and Baker & McKenzie are also very global, with large numbers of non-US offices as well… In comparison, F&B has just six offices, with only two outside the US.

    If the number of locations and profile of each firm were factored into this post, one would imagine the number of events reported might be slightly less astonishing, especially given the global nature of the recent economic meltdown. Law Shucks readers — many of whom, quite understandably, have US mindsets when it comes to this particular topic — would benefit from additional perspective going forward.

    • http://lawshucks.com lawshucks

      For the most part, our audience knows the difference between Clifford Chance and Faegre & Benson. It is astonishing that one firm, which prides itself on being a single, fully integrated law firm around the world, had 10 separate rounds of layoffs – astonishing both because it took so many discrete actions and because it’s so big and far-reaching.

      If any firm has a claim for being the whipping boy, though, it’s Cadwalader. We’ve long held them out as the catalyst of this now 2-year run of layoffs.

      • Mike

        Again, why is it astonishing that large firms that operate in so many different global markets would have several rounds rather than one or two — regardless of how intergrated they are? Think about it — if you lay off people in NY, does that mean you should do so in Amsterdam and Tokyo at the exact same time, even if those markets lag the US recession and client work is still be completed? (That makes no sense.) Or should these larger firms be allowed to run their businesses like every other $1B+ operation globally?

        • http://lawshucks.com lawshucks

          Easy part first – it’s astonishing (at least to us) how big some firms have gotten. It wasn’t that long ago that the largest firms had fewer than 1000 lawyers, and not long before that they capped out in the low hundreds. The growth is astonishing.

          Six of CC’s layoffs were in London in 2009. That couldn’t have been handled better? Three were in NY (and that doesn’t include the one reported on Dec 31, 2008.
          The other was in Amsterdam. So yes we are astonished that Clifford Chance couldn’t have done it all in fewer than 10 different events.

          Aside from the fact that CC isn’t a good example ofyour thesis, we also disagree on the idea. Most multinational firms do take an overall global view when deciding to reduce headcounts. If firms are going to be multinational like their clients they should still do a decent job of acting like an integrated entity. But firms don’t work that way as local offices are highly autonomous Which is how one gets astonished by so many discrete announcements.

  • Mike

    The following excerpt from the post above could benefit from some additional perspective not provided: "All told, we tracked 218 reports of layoffs at 138 law firms in 2009. Clifford Chance led the way, with an astonishing 10 different events reported. DLA Piper had seven, Baker & McKenzie six, and Cadwalader, Dechert and Faegre & Benson each had four."

    Cadwalader, it should be noted, has just five offices, and only two of them are outside the US. In contrast, Clifford Chance can be found in 20 *countries*, with just two of its offices located in the US. DLA and Baker & McKenzie are also very global, with large numbers of non-US offices as well… In comparison, F&B has just six offices, with only two outside the US.

    If the number of locations and profile of each firm were factored into this post, one would imagine the number of events reported might be slightly less astonishing, especially given the global nature of the recent economic meltdown. Law Shucks readers — many of whom, quite understandably, have US mindsets when it comes to this particular topic — would benefit from additional perspective going forward.

    • http://lawshucks.com lawshucks

      For the most part, our audience knows the difference between Clifford Chance and Faegre & Benson. It is astonishing that one firm, which prides itself on being a single, fully integrated law firm around the world, had 10 separate rounds of layoffs – astonishing both because it took so many discrete actions and because it’s so big and far-reaching.

      If any firm has a claim for being the whipping boy, though, it’s Cadwalader. We’ve long held them out as the catalyst of this now 2-year run of layoffs.

      • Mike

        Again, why is it astonishing that large firms that operate in so many different global markets would have several rounds rather than one or two — regardless of how intergrated they are? Think about it — if you lay off people in NY, does that mean you should do so in Amsterdam and Tokyo at the exact same time, even if those markets lag the US recession and client work is still be completed? (That makes no sense.) Or should these larger firms be allowed to run their businesses like every other $1B+ operation globally?

        • http://lawshucks.com lawshucks

          Easy part first – it’s astonishing (at least to us) how big some firms have gotten. It wasn’t that long ago that the largest firms had fewer than 1000 lawyers, and not long before that they capped out in the low hundreds. The growth is astonishing.

          Six of CC’s layoffs were in London in 2009. That couldn’t have been handled better? Three were in NY (and that doesn’t include the one reported on Dec 31, 2008.
          The other was in Amsterdam. So yes we are astonished that Clifford Chance couldn’t have done it all in fewer than 10 different events.

          Aside from the fact that CC isn’t a good example ofyour thesis, we also disagree on the idea. Most multinational firms do take an overall global view when deciding to reduce headcounts. If firms are going to be multinational like their clients they should still do a decent job of acting like an integrated entity. But firms don’t work that way as local offices are highly autonomous Which is how one gets astonished by so many discrete announcements.

  • http://lawafterthebar.wordpress.com The Writer

    As bad as this report is, I can't guess how many unreported layoffs happened in the rest of the legal industry. Coming from a top tier school, top half of my class, and with good experiences, I struggled to get any interviews this time last year….I'm just lucky I got work, at all.

  • http://lawafterthebar.wordpress.com The Writer

    As bad as this report is, I can't guess how many unreported layoffs happened in the rest of the legal industry. Coming from a top tier school, top half of my class, and with good experiences, I struggled to get any interviews this time last year….I'm just lucky I got work, at all.

  • legalese

    Anyone counting the firms which just 'disappeared' , like Heller Ehrman in San Francisco, et al – that would boost the count considerably -

  • legalese

    Anyone counting the firms which just 'disappeared' , like Heller Ehrman in San Francisco, et al – that would boost the count considerably -

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  • http://www.Skippy.com J. C. Tibbetts

    A most interesting website, and as a layman who has been seeking counsel from the firms reported re a high profile fraud case (but turned down) my condolences to the young lawyers who were laid off and having difficulty in finding new job. I can say from long experience that arrogance by senior partners in the white shoe firms, and callous indifference to the plight of those victimized by fraud, aided & abetted by some of these firms for their clients, as well as viewing young associates as readily expendable, is a problem in the legal profession that demands reform. It's my understanding that new hires or associates often get no chance to hear about an important case of a potential client, even when laid off and job seeking. That's not only highly unfair to a client seeking counsel, but also to competent lawyers who have just begun their careers, and get laid off in economic downturn not of their doing. Sadly, this situation is all too similar to what happened during the Great Depression, brought about by greed and corruption. Big law for the most part survived, but scores of highly competent lawyers were cast adrift until they found government jobs.

  • http://www.Skippy.com J. C. Tibbetts

    A most interesting website, and as a layman who has been seeking counsel from the firms reported re a high profile fraud case (but turned down) my condolences to the young lawyers who were laid off and having difficulty in finding new job. I can say from long experience that arrogance by senior partners in the white shoe firms, and callous indifference to the plight of those victimized by fraud, aided & abetted by some of these firms for their clients, as well as viewing young associates as readily expendable, is a problem in the legal profession that demands reform. It's my understanding that new hires or associates often get no chance to hear about an important case of a potential client, even when laid off and job seeking. That's not only highly unfair to a client seeking counsel, but also to competent lawyers who have just begun their careers, and get laid off in economic downturn not of their doing. Sadly, this situation is all too similar to what happened during the Great Depression, brought about by greed and corruption. Big law for the most part survived, but scores of highly competent lawyers were cast adrift until they found government jobs.

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  • Guest

    One trend that may not be reported at all is the tendency of law firms to avoid massive layoffs of attorneys by changing their status from salaried to hourly, thus placing upon those lawyers the burden of the downturn in billable work. While that is not itself so terrible (at least those lawyers still have jobs, albeit often with severely depressed incomes), the number of hours billed determines whether those lawyers receive benefits. Is anyone tracking this trend?

  • Guest

    One trend that may not be reported at all is the tendency of law firms to avoid massive layoffs of attorneys by changing their status from salaried to hourly, thus placing upon those lawyers the burden of the downturn in billable work. While that is not itself so terrible (at least those lawyers still have jobs, albeit often with severely depressed incomes), the number of hours billed determines whether those lawyers receive benefits. Is anyone tracking this trend?

  • Guest

    Could really use some perspective here. 4,633 attorneys out of how many were laid off? 138 law firms are tracked, but how many attorneys were on staff in the aggregate on 1/1/09? I really don't know if this is a 5% drop or 50%.

  • Guest

    Could really use some perspective here. 4,633 attorneys out of how many were laid off? 138 law firms are tracked, but how many attorneys were on staff in the aggregate on 1/1/09? I really don't know if this is a 5% drop or 50%.

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