Lawyers face uncharted territory in mass layoffs
Wed March 25, 2009
Lawyers face uncharted territory in mass layoffs
Many in the legal profession are calling March 9th of this year "Bloody Monday." On that day, 737 people lost their jobs at major U.S. law firms - making it the single worst day for legal layoffs so far this recession, according to the tracking Web site Lawshucks. Since January law firms have laid off more than 7,000 people. Charlotte has been hit hard because of its close ties to banking.
Until about eight months ago, Jeff Steiner says he'd never met a laid-off lawyer.
"I mean, never even heard of it," says Steiner. "I don't know that there was such a thing."
That is, until he became one. Steiner and his friend Sam Smith were among the earliest legal industry layoffs back in August at a Charlotte firm called Cadwalader, Wickersham and Taft. They worked in capital markets, which is precisely the kind of legal work that dried up as the financial system imploded.
Since then, nearly a hundred of the nation's highest-grossing law firms have laid people off.
"I mean, the sheer numbers are shocking," says Steiner. "And the names. You're talking about law firms that have been institutions in this country for years and years and years."
And now? Smith and Steiner say they have lots of company. Very few of their lawyer friends still have jobs.
At a Charlotte coffee shop they commiserate about how neither has had even a serious nibble on his resume. It seems firms are simply not hiring, here, or anywhere. And this is the last thing Sam Smith says he bargained for when he moved his wife and two kids to Charlotte barely two years ago.
"Most lawyers that were initially laid off were more junior level - people two, three years out of law school," says Smith. "So they've definitely got a lot of loans they're carrying."
"The loans are one thing," adds Steiner. "You know mortgages, car payments. . . "
"I think it's just natural tendency to go out and start spending your money," says Smith. "And no one expects to be laid off the next month and not be able to pay off all of this stuff."
With so many people in his network now out of work, Steiner says he has to dig deep - calling on distant acquaintances and friends of friends in search of job leads.
Smith has put his search on the backburner to start a new website he hopes will earn him some cash. He says the internet is the closest thing lawyers have to a support group right now.
"There's a lot of gossip in the legal industry," says Smith. "It's a very small world. And there's this watercooler talk that goes on at law firms. Associates will pop into their colleagues' office and talk about the partner that just yelled at them."
Now lawyers can vent on Smith's website. And they are. He says RateAPartner.com crashed twice under the crush of visitors the day it launched.
Other legal news sites have seen a similar surge. A cheeky mix of gossip and insider tips about layoffs, has made AboveTheLaw.com into a must-read. Editor-in-Chief Elie Mystal says lawyers are freaking out, because they always thought their firms were resistant to recession.
"You know there's a reason why some of these people went to law school as opposed to business school or what have you," says Mystal. "And one of those reasons was job security. Given the expectation that layoffs were a rare thing that happened to only a few particularly terrible attorneys, that'll give you whiplash."
Mystal says law firms that specialize in bankruptcy or litigation seem to be faring better than others. Those with a lot of banks on their client roster are hurting most. . . which means. . ."it's terrible in Charlotte."
"I mean there's just no other way of putting it," says Mystal. "I'm at the point where I just try to make jokes about it because it's so beyond the pale of what we've seen in other cities. There are a couple of firms that have just straight up closed their Charlotte offices. So it's not pretty."
It's hard to know exactly how many lawyers have lost their jobs in Charlotte since many firms have done the layoffs quietly or announced them only as part of a nationwide reduction. The head of the North Carolina Bar Association is taking a pragmatic view.
"What we're going through is sort of like a forest fire and it's going to burn out the underbrush," says Allan Head, executive director of the NC Bar Association. "The forest will re-grow. This is just natural, if you will."
Head says so many of the state's 20,000 attorneys are struggling that - for the first time ever - the bar association is offering career services.
"We counsel people on alternative careers," explains Head. "How to start a niche practice or a solo practice. We've really not spent a lot of time and effort on career services because there really wasn't a need."
And consider this: For every lawyer laid off, another one - if not two - secretaries and paralegals have been cut. Their job prospects are just as bleak, but their severance packages are nothing compared to the lawyers they supported.