Before I jump into my rant, I have to clarify that I’m a capitalist pig. I believe that one of the things that makes our country so great is the opportunity to make a damn fine living and buy really neat stuff. I don’t begrudge anyone, or any business, that opportunity. I believe in personal responsibility and will always shy away from corporate or government “welfare” programs. So, bring on the rant: As the readers of this blog know, starting in late 2008 we saw the beginning of a Tsunami of layoffs in the legal industry that resulted in more than 14,000 legal industry jobs lost (so far). A larger percentage overall compared to layoffs in other industries. The country is still in a deep recession from which we’re just beginning to recover (depending on who you ask). And I haven’t even mentioned the condition of our clients’ companies and their industries. And through it all I supported many of the law firm layoffs. It’s like pruning a rose bush. Sometimes you have to trim those things bare before they can grow. However, I did warn you that there were firms cutting staff and younger attorneys to protect the Profits Per Equity Partner (PPEP).
My take is that we will continue to see “right-sizing” throughout the year. Many of these decisions will be necessary to the health and future of a firm, others will be made to preserve the Profits Per Equity Partner (PPEP). Time will tell, especially in May when the new AmLaw 100 ranks are released.
Did I call it or what???? I hope every general counsel out there is following these stories and tracking to see if their “Go-To” law firm is amongst the ranks of “revenue down/profits up.” I don’t get it. Personally, I would have reinvested the money into the firm to show a flat year. But, hey, these are most likely the same firms that are raising their hourly rates. UPDATE: Here are more revenue down/profits up for Paul Hastings and Sidley.