Stealth Layoffs And Shortchanging Associates

While reports say law firms are still killing it out there, law firm leaders have already expressed deep concern over the economic outlook. Could firms be staring down another massive recession? Well, if history is any guide, the first harbinger of troubling economic times will be the stealth layoffs — a string of departures chalked up to vague “performance issues” designed to clear the decks while arousing minimal attention.

At this point, we don’t have enough intel from tipsters to confirm what’s going on at this particular firm, but if this blind item sounds like your firm, please let us know with a confidential email to Don’t worry, we’re not going to reveal our sources.

The whispers we’ve heard is that a top global law firm is quietly laying off attorneys in the United States after failing to secure a merger partner last year. If true, this could reflect a botched growth strategy because as recently as a few months ago, the firm was expanding in its U.S. presence.

Beyond the layoffs, one tipster suggests the firm is shortchanging the associates it is keeping on the payroll. According to this report, some attorneys are being docked class years when it comes to pay while still being billed out at their actual seniority. That would just be a naked profit grab. This tipster said some attorneys were being docked as much as two classes. A fifth-year getting knocked back down to a third-year would be a $60K pay cut.

As we said, with only anonymous tips so far, we can’t definitively say that this is a firm policy as opposed to isolated incidents that might have an innocent explanation. But if a major firm is already walking down this road, could an industry-wide rough patch be far behind?

HeadshotJoe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.

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