American Lawyer, Too Many Lawyers? Report Faults Firms for Resisting Layoffs:
Should law firm leaders be firing more lawyers? That seems to be the takeaway of a report released Wednesday by the legal consultancy Altman Weil.
Nearly 60 percent of the 356 law firm leaders surveyed for the report said that overcapacity is hurting their firm’s profitability. The problem is more pronounced among firms with 250 lawyers or more, with 75.6 percent of them citing overcapacity as a drag on profits, the report said.
Meanwhile, about 62 percent of law firm leaders said that demand for their services has not yet reached prerecession levels. While some firms are addressing the problem by trimming their ranks, many aren't doing enough, according to Newtown Square, Pennsylvania-based Altman Weil, which has been surveying law firms since 2008.
“The most obvious solution to the overcapacity problem is to cut underperformers,” the report said, adding that firms know this, but “in too many firms, personal, political and cultural obstacles are hindering pragmatic economic decisions.” ...
Seeger said that while the kinds of mass layoffs that accompanied the recession are now rarely in the headlines, that doesn’t mean firms aren’t trimming their ranks.
Nearly 73 percent of the firm leaders surveyed said that they are removing chronically underperforming lawyers from their firms, and 93 percent said that they were reducing compensation as a way of dealing with less productive lawyers. Those practices were even more common at law firms with 250 lawyers or more, the survey found.