January 9, 2013
WSJ: Law Firm Partners Face Layoffs in 2013
Wall Street Journal: Law-Firm Partners Face Layoffs:
It used to be that once a lawyer grabbed the brass ring of partnership at a major firm, lifetime employment was virtually assured. But more partners are discovering that those days are over. As firms grapple with continued lackluster demand for legal services, some are handing out pink slips to partners who don't boost the firm's bottom line enough. "You're only as secure as the amount of money you bring in," says a partner who during the recession was asked to leave a large national law firm. He was let go from his subsequent firm last year. It isn't enough to be a good lawyer, he says. "The job is to make money for the firm."
Having trimmed junior lawyers and staff in the years after the economic downturn, some big firms now are fixing a stern eye on partner performance. The firms are keeping close track of how much business lawyers bring in and how many hours they bill. Those with disappointing numbers can have their pay cut or be stripped of their ownership stakes. Others are simply shown the door. ...
Most law firms don't care to publicize partner exits. But big U.S. firms do plan to cut partners this year, according to two recent surveys of law-firm leaders. About 15% of roughly 120 firms surveyed by Wells Fargo Private Bank's Legal Specialty Group intend to cut partners in the first quarter, continuing a three-year trend. And 55% of the 113 managing partners and firm chairmen who responded to an American Lawyer magazine poll said they planned to ask between one and five partners to leave in the coming year. Though that proportion was roughly steady with the previous year, 5% intended to cut between 11 and 20 partners this year, up from 1.2%.
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Awwwww....my heart just bleeds for you lawyer types who are, as a certain class of people in our culture, as much responsible for the malaise our country finds itself in as anyone.
Posted by: journeyman | Jan 10, 2013 8:36:13 AM
This is not news. Partnership ceased to be tenure in the early 90s. About 15 years ago I was a partner in a medium size regional law firm. One of my two major clients went bankrupt (7 not 11) and my billings were bad for 9 months. Kaboom. I was over-boarded.
Young lawyers need to know that legal careers are tenuous. If you make it to partnership, you are going to need to use every bit of the extra money to 1. pay off your debts, all of them, and 2. save as much as you can. You will be a HENRY (high income not rich yet). A bigger house and a fancier car can wait until after you have a very fat bank account. Oh yes, and send your kids to State, you can't afford Ivy League.
Posted by: Walter Sobchak | Jan 10, 2013 12:41:53 PM