No 3 US law firm fires 8 per cent of its lawyers
28 Feb 2009
Now the recession is starting to have its effect on the legal profession as well. Latham & Watkins LLP, one of the world's largest law firms, said it is firing 190 lawyers and 250 other employees, as the sinking economy and capital markets reduces demand for corporate finance and transaction services.
The layoffs affect about 8 per cent of the Los Angeles-based firm's roughly 2,300 lawyers. Latham & Watkins said it is offering six months salary and medical benefits to affected employees.
"The depth and duration of this recession is unprecedented and we expect the health of the global economy to remain weak at least through 2009," managing partner Robert Dell said in a statement.
"While our diversified practices and global platform provide the stability and strength to navigate these turbulent market conditions, we must adjust our staffing levels in line with the projected needs of our clients. Our structure was built to serve even greater demand based on the historical levels of robust growth we experienced before the rapid onset of this global recession," he added.
The firm said revenue fell to about $1.9 billion in 2008, second only to Skadden Arps Slate Meagher & Flom LLP. But Latham's revenue dipped 4 per cent in 2008. And profits per partner, a widely used measure of health among law firms, declined 21 per cent to $1.803 million - one of the sharpest drops among big legal firms last year.
Latham, with 28 offices, did not say where its cuts would take place. The American Lawyer magazine reported that the cuts predominantly affect the firm's New York and Los Angeles offices.
The firm implemented other cost-cutting measures in recent months, including freezing associate salaries this year. That means first- and second-year lawyers will get base salaries of $160,000. More experienced associates will get the same base salary in 2009 that they got in 2008. Many other law firms have since followed suit, implementing salary freezes.
The 2007 figure ranked Latham seventh among law firms worldwide, American Lawyer said in its October 2008 edition. Among US-based firms, Latham ranked third in revenue in 2007, trailing Baker & McKenzie and Skadden, Arps, Slate, Meagher & Flom LLP, the magazine said.
