Layoffs When Business is Slow Forum

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Tyler_Durden

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Layoffs When Business is Slow

Post by Tyler_Durden » Mon Oct 07, 2019 6:19 pm

How common is it for firms to just fire their junior associates when there is not enough billable work? I have seen this phenomenon twice already in just three years of practice, is this normal? Both times at mid-sized/ smaller firms that have distinguished practices.

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Re: Layoffs When Business is Slow

Post by Anonymous User » Mon Oct 07, 2019 6:33 pm

It happened to me when business was busy but when there was an expected economic downturn (price of oil, and our business was largely oil-related and more secure than most firms). This was a small firm in a niche market though. May not apply to your situation.

nixy

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Re: Layoffs When Business is Slow

Post by nixy » Mon Oct 07, 2019 6:49 pm

Tyler_Durden wrote:How common is it for firms to just fire their junior associates when there is not enough billable work? I have seen this phenomenon twice already in just three years of practice, is this normal? Both times at mid-sized/ smaller firms that have distinguished practices.
They're paying associates an awful lot to keep them around if they're not actually billing.

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Re: Layoffs When Business is Slow

Post by Anonymous User » Mon Oct 07, 2019 8:18 pm

I was at one of the lower vault/AmLaw firms and lasted a solid 9 months of billing 10-15 hours a week before I was shown the door. Even if the team is slow, in my experience, firms don’t go out of their way to let go of juniors

sparty99

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Re: Layoffs When Business is Slow

Post by sparty99 » Mon Oct 07, 2019 8:38 pm

Anonymous User wrote:I was at one of the lower vault/AmLaw firms and lasted a solid 9 months of billing 10-15 hours a week before I was shown the door. Even if the team is slow, in my experience, firms don’t go out of their way to let go of juniors
When was this? Did you bounce back? Dang, 10 to 15 hours is real bad.

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Pomeranian

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Re: Layoffs When Business is Slow

Post by Pomeranian » Mon Oct 07, 2019 8:48 pm

Based on a recent survey, most CFOs are expecting a recession in 2020. Accordingly, it would not be a surprise to see companies (and thus law firms) trim staff and hunker down for the expected downturn.

Edit: Accidentally posted anon
Last edited by QContinuum on Tue Oct 08, 2019 10:53 am, edited 1 time in total.
Reason: Deanoned at poster's request.

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Re: Layoffs When Business is Slow

Post by Anonymous User » Mon Oct 07, 2019 11:27 pm

sparty99 wrote:
Anonymous User wrote:I was at one of the lower vault/AmLaw firms and lasted a solid 9 months of billing 10-15 hours a week before I was shown the door. Even if the team is slow, in my experience, firms don’t go out of their way to let go of juniors
When was this? Did you bounce back? Dang, 10 to 15 hours is real bad.
This was last year and I found another job at a different firm. Yeah, it was bad. I billed 400-450 hours 9 months into the fiscal year.

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Re: Layoffs When Business is Slow

Post by Person1111 » Tue Oct 08, 2019 1:08 am

Anonymous User wrote:Based on a recent survey, most CFOs are expecting a recession in 2020. Accordingly, it would not be a surprise to see companies (and thus law firms) trim staff and hunker down for the expected downturn.

Edit: Accidentally posted anon
Really depends on the firm and its mix of practice areas. Recessions obviously depress demand for transactional work, but countercyclical areas (BK, litigation, etc.) do much better. The combination of a recession and a less active/more pro-business administration could be particularly bad news, given that there's less investigations work to throw bodies at when other groups are slow.

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Re: Layoffs When Business is Slow

Post by Anonymous User » Tue Oct 08, 2019 4:03 am

My first biglaw firm laid off about a quarter of my class as second years because work was slow, and this was in the post-ITE era. It wasn't even super slow, more like 1600-1700 hours per person. But, get rid of a quarter of the class and now everyone had 2100-2200.

My second firm carried an entire office that was billing at like 70% capacity for years. 70% sounds decent, but that's only 1400 hours a year. How fast you get pushed out is very firm and office-situation dependent.

It's fairly unusual to fire first years and if it happens it tends to be more of a one off than a layoff. 2nd years, I suspect it's far more common than people think.

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Wild Card

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Re: Layoffs When Business is Slow

Post by Wild Card » Tue Oct 08, 2019 11:33 am

Anonymous User wrote:My first biglaw firm laid off about a quarter of my class as second years because work was slow, and this was in the post-ITE era. It wasn't even super slow, more like 1600-1700 hours per person. But, get rid of a quarter of the class and now everyone had 2100-2200.

My second firm carried an entire office that was billing at like 70% capacity for years. 70% sounds decent, but that's only 1400 hours a year. How fast you get pushed out is very firm and office-situation dependent.

It's fairly unusual to fire first years and if it happens it tends to be more of a one off than a layoff. 2nd years, I suspect it's far more common than people think.
What's a 2d year firing like? Stub + 1y?

In other words, if one starts in October of a year, one is asked to leave after 1 year and 3 months?

thenewyorker

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Re: Layoffs When Business is Slow

Post by thenewyorker » Wed Oct 16, 2019 10:59 pm

Which associates are most at risk for layoffs in the upcoming recession? I would think that some of the first to go are the super senior associates and staff attorneys but am interested in hearing others' thoughts on this.
Last edited by QContinuum on Thu Oct 17, 2019 2:33 pm, edited 1 time in total.
Reason: Outed for anon abuse.

QContinuum

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Re: Layoffs When Business is Slow

Post by QContinuum » Thu Oct 17, 2019 2:42 pm

thenewyorker wrote:Which associates are most at risk for layoffs in the upcoming recession? I would think that some of the first to go are the super senior associates and staff attorneys but am interested in hearing others' thoughts on this.
I wouldn't assume that at all. In a recession, when work dries up, midlevels and seniors have (and exercise) the ability to keep their hours up by delegating less to juniors. So it's juniors' hours that are hit hardest. Firms respond accordingly by some combination of taking smaller summer classes, no-offering summers, rescinding offers, deferring start dates, and, yes, laying off juniors. The "worst" firms will no-offer summers, rescind offers, and lay juniors off with abandon. Better firms will refrain from no-offering summers and rescinding offers; they'll still do layoffs, but they won't lay off stub/first-years who tend to have the weakest ability to lateral. The best firms won't do layoffs at all.

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