Biglaw And The Dreaded Stealth Layoff: It's Happening Again – Above the Law

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Small teamWith news of law firm hiring freezes and outright layoffs at top Biglaw firms, we knew it wouldn’t be long until another sign of the financial times emerged. It was just yesterday that we learned of one top firm’s decision to defer the start date for its incoming associates due to demand slowing down “significantly.”
Now that deferrals are upon us, we have to wonder: Is this the canary in Biglaw’s coal mine?
Top Am Law firms may yet implement additional austerity measures when it comes to controlling their attorney headcounts, but they know just how bad the publicity is when they choose to conduct layoffs en masse. No Biglaw firm wants their brand name to become a layoff-related verb (this happened to Latham when the firm laid off 440 people in February 2009). The way to avoid all the negativity is through the sneak attack of stealth layoffs.
Stealth layoffs are the disturbingly popular method used by Biglaw firms to cull the associate (and partner) herd. For those who might be hearing the term for the first time, stealth layoffs allow firms to cut headcount without confirming that there were any financially based layoffs. Firm frequently couch the reductions in performance review terms that coincidentally happen in the midst of a downturn — whether economic- or demand-related — often making those let go doubt their lawyering skills. By their secretive nature, they can be challenging to confirm in specific numbers, but insiders slowly find out something is amiss.
So, are Biglaw firms using stealth layoffs right now? Based on some of the tips we’ve received, we certainly think so. Firms are using these stealth layoffs as a way to save face and cut costs at the same time, and we’ll likely be seeing many more of these in the future.
Help us help you. Please keep Above the Law in mind when attorneys are suddenly let go and the firm insists there’ve been no layoffs.
If your firm or organization is reducing the ranks of its lawyers or staff, whether through open layoffs, stealth layoffs, or voluntary buyouts, please don’t hesitate to let us know. Our vast network of tipsters is part of what makes Above the Law thrive. You can email us or text us (646-820-8477).
If you’d like to sign up for ATL’s Layoff Alerts, please scroll down and enter your email address in the box below this post. If you previously signed up for the layoff alerts, you don’t need to do anything. You’ll receive an email notification within minutes of each layoff announcement that we publish.
Staci ZaretskyStaci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.
Biglaw, Deferrals, Layoffs, Stealth Layoffs
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