TaxProf notes that the large law firms have laid off roughly 2,900 lawyers in 2010:
The NLJ 250, The National Law Journal’s annual survey of the nation’s largest law firms, shows that Big Law continued to shed lawyers at a brisk clip in 2010. Nearly 2,900 fewer lawyers worked for the 250 top firms last year. That’s in addition to the approximately 6,600 attorneys who departed in 2009. In the 34 years the NLJ has been surveying large firms to gather headcount numbers, there have never been multiyear declines of this magnitude.
I began comparing total number of lawyers employed in by the big firms in Chicago in 2008 to see if I could ferret out what was really happening. Among the Chicago law firms some Baker McKenzie has added 100 lawyers, DLA Piper has laid off 400, Mayer Brown has laid off 150, Sidley Austin more than 200, and so on.
However, it’s when you turn to the large New York firms that you see really substantial numbers of layoffs (400 from Latham &Watkins, 400 from Skadden, and so on) andthe big LA firms show a similar pattern, this despite the Chicago firms being significantly larger to start with.
It appears to me that in the cases of the LA firms the declines reflect the general softness in the California economy while in New York the layoffs undoubtedly reflect the fortunes of the financial sector, particularly some of the large investment banks. Remember Lehman?
What I’m suggesting is that I think we should be cautious about over-interpreting the decline in the bullpens at these large firms. I’m sure it’s shocking to the young lawyers with a half million in education debts—they’re never going to make the kind of money at a smaller firm or in a sole proprietorship that they would have as partners at these big firms.
But I’m not sure that we can conclude that the continuing layoffs reflect some kind of sea change in the fortunes of the practice of law, generally. Rather we may be seeing the decline whether temporary or permanent of New York and Los Angeles.
It is all tied together, IMO. The problems in the financial sector are the result of the real estate bubble bursting. And that is going to hit California harder than Chicago….Thus LA and New York firms get hit hardest.
Dave, you overlook that in order for the economy to recover, Big Law has to hire a new employee every 27.5 hours.
(I agree the numbers are fairly flat, but this year NLJ changed it’s methodology from a head count on a date specific in September, to an average over the course of the year. The potential motivation for those changes suggest something is happening with the traditional recruiting, job start and retention cycles)
Let me see if I can state this more clearly. “The practice of law” and “big law firms in Los Angeles and New York” are not synonymous. Indeed, the very largest law firms are in neither New York nor Los Angeles nor Washington, DC. They’re in Chicago.
I think that the claims of a general decline in the practice of law as a business may be true or it may be false but the evidence that is being presented does not drive one to the conclusion of a general decline in the practice of law as the simplest explanation. The simpler explanation is that certain specific sectors have been hardest hit by the recession and cities most dependent on those sectors are seeing a decline in the employment of lawyers in large firms there.
I’m not sure you can tell much of anything. Big Law firms have offices in many locations, including overseas. A lot of their practice areas are not as locally restricted as smaller law firms. And at least some of the most biggest messes, like Lehman Bros., created a lot of legal work.
(I’m surprised that ending the death penalty eliminated 37 jobs in the state appellate defender’s office, 18% of the budget. It seems a little orchestrated, but who knows?)
Pretty much my point.
I think that it’s true that tuitions in higher education are completely out of whack and that, consequently, it’s pretty darned hard for a lot of the people who are going to law school to justify the cost on the basis of their likely earning as a lawyer. And it’s clearly true that big law firms have reduced the number of associates they’ve got on the payroll.
But whether that points to some larger decline in the practice of law I have no idea and I don’t think you can draw any reasonable conclusions in that regard from the NLJ survey results.