Legal giants slashing and burning
David Lat and Elie Mystal of the legal blog Above the Law report that the worldwide legal firm Latham & Watkins have laid off 440 employees (190 associates, 250 staff). According to Above the Law, Latham & Watkins managing partner Bob Dell announced the layoffs via this company wide E-mail:
From: Robert Dell (SF)
To: #ALL L&W PERSONNEL
Sent: Fri Feb 27 08:00
Subject: Executive Committee AnnouncementTo: All Personnel
From: The Executive Committee
It is with deep regret that we are announcing and implementing today a layoff of associates, paralegals and staff, which will affect approximately 12% of our associates (190) and 10% of our paralegals and staff (250). Everyone who is directly impacted by this workforce reduction will be notified personally today, and will be offered a comprehensive separation package, including payment of six months salary (up to total severance of $100,000) plus six months of continued medical coverage (through August 31, 2009), as well as other resources to support this transition.
We deeply appreciate the many valuable contributions and committed service of those affected by this decision. We made this painful decision with great reluctance and only after concluding that demand for legal services in this troubled economy will not provide enough work for all of our attorneys. Needless to say, the depth and duration of this recession could not have been anticipated. While our diversified practices and global platform continue to provide us the stability and strength to navigate these unprecedented global economic conditions, our structure was built to serve even greater demand based on the significant and steady growth we experienced before the rapid onset of this global recession.
While this brief email announcement is not an ideal form for communicating this type of decision, it is the only realistic way for a firm of our size to inform everybody directly and at the same time. For now, we ask everyone to respect our process so that our friends and colleagues affected by this decision can be notified personally, and to give them the support and understanding they deserve.
Going the way of the dinosaur?
Not counting dissolution, 440 employees may be the largest layoff one law firm has ever had. But that’s not the only record Latham & Watkins may be setting. The separation package they’re offering includes payment of six months salary (up to $100,000 total severance), plus six months of medical coverage. That would be, according to Lat and Mystal, the most generous severance package a major law firm has ever given.
The picture this paints for the legal profession is not bright. Experts predict that more big law firms will follow suit with layoffs in 2009. Perhaps the rates big-time firms charge is no longer supportable, particularly during America’s current depression. Perhaps the need for a large staff was overestimated. Whatever the case, job loss hurts, no matter what the profession. For all of those who lost their jobs at Latham & Watkins, particularly those with families, I wish them luck.
From what I’ve been hearing, the profession of law is getting oversaturated, but that said, there will always be demand for it. Still, a round of layoffs from a firm as large as Latham Watkins is bewildering.