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The Crisis Goes to Waste as BigLaw Muddles Through

Law firm lay-offs continue aplenty. How should firm management decide about cutting staff? 

Staffing Cuts Multiply, but Are Associate Cuts a Better Solution? by Karen Sloan (The National Law Journal, 23 Jan 2009) recounts the many BigLaw staff reductions and suggests “firms should be cautious in their reductions and should be careful not to cut staff too deeply. Arbitrary cuts in key departments, such as marketing and technology, could ultimately hurt the firm by undermining efficiency and long-term growth plans. ”

My recent post Law Firm Staffing Reference Model argues that firms must “determine what support lawyers need [and] know what lawyers should do on their own and what they should delegate.” I’ve not seen evidence that firms systematically assess support needs.

In the NLJ article, Reed Smith managing partner says his firms cuts were evenly cut across departments because “Our intention is not to let any of these services slip.” The logic eludes me; maybe the cuts should be concentrated.

Absent rigorous analysis, cutting evenly across the board suggests that a firm has no idea what support is really required. Evenly distributed cuts imply that rational decisions were made in the past, that support needs remain constant over time in spite of the march of technology, and that wild gyrations in practice group revenue have no impact on support needs.

I suspect this crisis is going to waste. Many BigLaw firms will muddle through, a few more may collapse. But will any really get rational about how they operate their very expensive support?

  1. Curt Meltzer

    I agree that cutting across the board is illogical. The implication that all services are at the same level, or SHOULD be at the same level, is illogical. For example, I have heard from people at many firms that legal secretaries are underutilized. Expanded use of technology by lawyers and others has left secretaries with less work, and management has not redefined their roles in most cases. Concern arises about the overlap between paralegal (revenue generator) and secretary (not) roles. Yet the politics of eliminating large swaths of secretaries is daunting to most. Service levels should be adjusted routinely based on client service needs. It is easier for management to make cuts across the board so as not to make difficult decisions and risk making a “mistake” by cutting one department more than another. It can be hard to make these decisions, but that is what clients and shareholders should demand.