The Year in Law Firm Layoffs – 2010

by lawshucks on January 24, 2011

With all due respect to the 745 individuals affected, 2010 was a modest year for layoffs in our little slice of heaven.

Law-firm layoffs in 2010 fell by a factor of 20 compared to the 12,259 people laid off by law firms in 2009, the worst year on record. Even 2008, when we had no idea what was coming, was 2.5 times worse than 2010, with 1,992 folks losing their jobs.

Details, including lots of charts, after the jump.

All told, we tracked 26 rounds of layoffs by 22 major law firms in 2010 (Eversheds had two rounds reported and Howrey three), in which 234 attorneys’ and 511 staffers’ employment were terminated. (And always bear in mind that layoffs are widely underreported).  Here they are in reverse chronological order.  Original sources for all are reports in the Layoff Tracker.

To put that more starkly into context, those 745 people laid off for the entire year are just eight (8!) more than were laid off in one day – March 9, 2009, the worst day for law firm layoffs ever.

Note that a couple of firms have “0″ counts. We have included firms where layoffs have been reported and confirmed, but no reliable numbers were available. No point letting firms off the hook just because they obfuscated.

Howrey, which has more recently been losing partners at an even greater clip, laid off almost 42% more people than #2 Eversheds, and more than five times as many as T-9 Dewey & LeBoeuf and Jones Day.

Howrey reportedly laid off 59 lawyers during 2010, the most lawyers laid off by any firm for the year. Take that with a grain of salt, though. And they’ve been losing partners and closing offices at an alarming rate, lately.

Compare that to 2009, when Fish & Richardson laid off nearly double that number of lawyers (103) and just squeaked in at #10. Allen & Overy’s 2009 layoffs of 260 people were more than quadruple this year’s #1.

Eversheds took the top honors for most staff laid off by a law firm in 2010. Staff comprised 68% of 2010′s layoffs, which is slightly higher than the overall 60% ratio.

We think when 2011 is all over, that will be the bigger story than the apparently imminent demise of Howrey as a standalone firm.

Why?

Because the Eversheds redundancies (to use the native lingo) relate to the firm’s outsourcing its back-office functions. That’s a trend that is only going to pick up pace, although many firms will avoid the PR hit by having the outsourcing provider do the terminations, which will only make it harder to report. Anyway, keep an eye on that one.

Here are the 2010 layoffs by month. The purple line shows the count of reported rounds for the month and the orange shows the average number of people laid off in each reported layoff.  (Note: You may have to click through twice to get the full-size image – working on it)

Interestingly, the cycle of layoffs throughout the year has been consistent the past three years (although 2011 doesn’t look like it will fall into line, since there haven’t been any layoffs in January). There’s an initial burst in January, a dropoff in February, a peak in March, then the rest of the year pretty much tapers off, with another blip coming in November.

Note how far off the pace of layoffs at law firms has diminished in this chart of all layoffs by month over the past three years.

Finally, we couldn’t do any of this without the hard work of the original sources (including our very own tipsters, on an increasing, and much-appreciated, basis):

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