Stealth Layoff Check-in Forum

[Anonymous User]

Im fairly happily employed and very anti-social, this means I haven’t been following up on the forums as much as I did when I wasn’t employed (about two years ago). Back then, there was a lot of talk of stealth layoffs. Firms were quietly not doing as well as they were projecting. I’m curious as to the health of biglaw now. Anyone have any insight? Even anecdotally?

[Anonymous User]

Lets define this first though. Stealth layoff = higher than normal firings due to economics

[bob311]

This is probably a good time to start this. With the market reaching correction territory and 2019 not going to have a corporate tax cut that will artificially keep the market up, I believe 2019 might see some tougher times for biglaw.

[Npret]

Lets define this first though. Stealth layoff = higher than normal firings due to economics

Stealth also involves changing performance standards so good people can be fired for “performance” rather than exposing the firms economic health.

[tbp140]

How many firings are typical anyway? I was under the impression that biglaw jobs are pretty secure until you're a senior associate.

[bob311]

How many firings are typical anyway? I was under the impression that biglaw jobs are pretty secure until you're a senior associate.

Do you not know anything about the 2008 recession? Wholesale junior classes were fired. It was the juniors who got creamed in the last recession. That is why senior associates are so in demand now, because there are less of them given what happened 10 years ago. If a recession or worst happens, juniors are the first to be cut.

[rokiv]

How many firings are typical anyway? I was under the impression that biglaw jobs are pretty secure until you're a senior associate.

Do you not know anything about the 2008 recession? Wholesale junior classes were fired. It was the juniors who got creamed in the last recession. That is why senior associates are so in demand now, because there are less of them given what happened 10 years ago. If a recession or worst happens, juniors are the first to be cut.

This post is misleading. Yes there were firms that got rid of or deferred their first-year/junior associates, but a proportionally equal number of mid-levels/seniors were let go.

Also, the shortage of mid-levels/seniors now is largely a result of the dramatic decrease in biglaw hiring from 2011-2014.

No job is safe in a recession of the magnitude of 2008.

[tbp140]

How many firings are typical anyway? I was under the impression that biglaw jobs are pretty secure until you're a senior associate.

Do you not know anything about the 2008 recession? Wholesale junior classes were fired. It was the juniors who got creamed in the last recession. That is why senior associates are so in demand now, because there are less of them given what happened 10 years ago. If a recession or worst happens, juniors are the first to be cut.

This post is misleading. Yes there were firms that got rid of or deferred their first-year/junior associates, but a proportionally equal number of mid-levels/seniors were let go.

Also, the shortage of mid-levels/seniors now is largely a result of the dramatic decrease in biglaw hiring from 2011-2014.

No job is safe in a recession of the magnitude of 2008.

Sorry, I was referring to non-recession years. Like how many people are typically let go simply for poor performance or, on the other hand, adequate performance but no potential to make partner (as opposed to stealth layoffs, recession-related layoffs or firings for blatant misconduct)?

[LBJ's Hair]

How many firings are typical anyway? I was under the impression that biglaw jobs are pretty secure until you're a senior associate.

Do you not know anything about the 2008 recession? Wholesale junior classes were fired. It was the juniors who got creamed in the last recession. That is why senior associates are so in demand now, because there are less of them given what happened 10 years ago. If a recession or worst happens, juniors are the first to be cut.

This post is misleading. Yes there were firms that got rid of or deferred their first-year/junior associates, but a proportionally equal number of mid-levels/seniors were let go.

Also, the shortage of mid-levels/seniors now is largely a result of the dramatic decrease in biglaw hiring from 2011-2014.

No job is safe in a recession of the magnitude of 2008.

I'm too young to know how lawyers fared post-Dot Com bust, but that's a better basis for comparison than '08, if we do have a recession in the next 18 months. Contraction in equity markets, slack in global demand, etc, but not a full scale financial crisis.

[Anonymous User]

Anyone have a sense of the current stealth layoff climate? Should we expect an uptick with the looming recession? I'm guessing firms may prefer to let associates go in a trickle (in the same way they shed partners) to avoid any bad press.

[whyhello]

not necessarily just specific to biglaw but i have noticed more layoffs in the past year generally in passing than I ever have and a lot of it could be that I was insulated to hearing about them but I imagine if clients and sectors that traditionally support a lot of firm work are cutting large costs then law firms will also be affected as well. but then at a firm that means certain practice areas may dry up in work and at a company more or all work is pulled in and in both then senior/more expensive and/or most recent hires positions are vulnerable.

[Anonymous User]

If we are doing an SA somewhere that has never no-offered even during the crisis, should we be worried? They seem to do well during a recession with their clients/work, too.

Maybe the alleged smaller SA classes that the firms recruited this year in anticipation of a recession will prevent the layoff issue at the junior level... wishful thinking.

[Best]

If we are doing an SA somewhere that has never no-offered even during the crisis, should we be worried?

I wouldn't say you should be worried, but you aren't immune to a no-offer. The 2008 recession was 11 years ago. That's 11 years for the decision makers to be completely different people or for the firm to have otherwise changed. Regardless, it's out of your control. Focus on doing good work.

[Pomeranian]

The economic data clearly shows that the world economy is slowing and this will inevitably hit the U.S. economy. Will be interesting to see how law firms handle the coming recession this time around.

[Wubbles]

The economic data clearly shows that the world economy is slowing and this will inevitably hit the U.S. economy. Will be interesting to see how law firms handle the coming recession this time around.

If the data "clearly shows" a slowdown then why did the DJI gain 1000 points in the last month? Somehow everyone on this forum knows what wall street investors don't, y'all should consider a career change with all of that knowledge

[BrainsyK]

If the data "clearly shows" a slowdown then why did the DJI gain 1000 points in the last month? Somehow everyone on this forum knows what wall street investors don't, y'all should consider a career change with all of that knowledge

US GDP is down 1% in Q2. NY Fed. forecast has it down another ~0.5%. That's economic data. Equities markets isn't necessarily always reflective of underlying economics. I don't think OP is right in that the data is clear, but it certainly leans closer to gloom than boom.

[dabigchina]

The economic data clearly shows that the world economy is slowing and this will inevitably hit the U.S. economy. Will be interesting to see how law firms handle the coming recession this time around.

If the data "clearly shows" a slowdown then why did the DJI gain 1000 points in the last month? Somehow everyone on this forum knows what wall street investors don't, y'all should consider a career change with all of that knowledge

1. The stock market is not the economy.
2. The DJI is a terrible gauge of the stock market.

[Pomeranian]

Federal Reserve cut rates again today. You think they would have done this if the economy wasn't stalling?

[Anonymous User]

I think it would be helpful to post some examples. Morgan Lewis just announced buyouts for over 50 secretaries. While there was no announcement about associates, it does make me wonder whether they are gearing up to stealth lawyers.

[LaLiLuLeLo]

I think it would be helpful to post some examples. Morgan Lewis just announced buyouts for over 50 secretaries. While there was no announcement about associates, it does make me wonder whether they are gearing up to stealth lawyers.

Eh, firms have been cutting staff for several years now. Usually they do it in the context of an office move, but it doesn’t surprise me. It’s just the trend of law firms right now.

[Anonymous User]

I'm the poster above. To be clear, I'm not surprised either. Just curious as to what this means for associates and the overall health of the firm.

[QContinuum]

I think it would be helpful to post some examples. Morgan Lewis just announced buyouts for over 50 secretaries. While there was no announcement about associates, it does make me wonder whether they are gearing up to stealth lawyers.

Eh, firms have been cutting staff for several years now. Usually they do it in the context of an office move, but it doesn’t surprise me. It’s just the trend of law firms right now.

Agree with LaLi - this is an industrywide trend to cut costs as younger lawyers are more used to leveraging technology and rely less on secretaries. I wouldn't view this as having any particular implications for associate job security (or even 2L/3L/lateral hiring).

[Best]

I think it would be helpful to post some examples. Morgan Lewis just announced buyouts for over 50 secretaries. While there was no announcement about associates, it does make me wonder whether they are gearing up to stealth lawyers.

Eh, firms have been cutting staff for several years now. Usually they do it in the context of an office move, but it doesn’t surprise me. It’s just the trend of law firms right now.

Agree with LaLi - this is an industrywide trend to cut costs as younger lawyers are more used to leveraging technology and rely less on secretaries. I wouldn't view this as having any particular implications for associate job security (or even 2L/3L/lateral hiring).

Pretty accurate. We recently had our staff evaluations and for some of the open reviews I was able to view, you could easily tell if it was a younger or older generation lawyer writing the review. "[Paralegal/secretary] is very nice and has great interpersonal skills, but I haven't had much interaction with her and am not utilizing her often" etc. Firms are seeing this as a cost saving measure - and it is.

[whats an updog]

It sucks too, because a good secretary is a godsend.

[64Fl]

It sucks too, because a good secretary is a godsend.

It's not like firms are axing all of their secretaries. They are just making the ratio make more sense. There is no need to have a 1:1 or 1:2 lawyer:secretary ratio anymore like there used to be 40 years ago. If the average legal secretary in a major market costs $100k (salary + benefits + other associated employment costs, like required square footage and the time it takes to do reviews), then cutting 50 secretaries is saving $5M/yr. That's a good chunk of change, and, quite frankly, there might almost no business disruption. Several of the secretaries I work with spend more time playing games on their computers or browsing Facebook than actually doing anything. They aren't lazy; they just genuinely don't get used nearly as much.