In Praise of Legal Layoffs

Dan Slater--former author of the Wall Street Journal Legal Blog--has a piece in the New York Times singing the praises of law firm layoffs.  Because I've personally witnessed too many students fail to get jobs or had offers withdrawn, my soul can't let me agree with his premise (and I'm guessing that the lawyers still employed aren't feeling too liberated):

The legal media, in its rush to side with the fallen, has often cast the layoff wave as the result of endemic firm mismanagement finally coming home to roost. Perhaps. But make no mistake: These layoffs, ­ which in many cases have been paired with salary freezes or cuts and significant reductions in law school recruiting, ­ are the best thing to happen to the legal industry in years. Call it a blessing amid recession.

Start with the benefit to cost-conscious corporate counsel, who for too long have been bilked by a law firm compensation model that leads lawyers to prioritize their “hourly quotas,” which determine year-end bonuses, over quality service. Unfortunately, the same bar presidents and law firm managing partners who are in a position to do away with the billable-hour format are happy to write op-eds decrying the miserable tradition, yet are unwilling to lead the pack when it comes to taking action.

So the billable hour remains entrenched, a vestige of law firm insularity and lawyer self-regulation. In the downturn, however, the common practice of “staffing up” a matter to increase billings has finally found its proper comeuppance. The economy for Wall Street legal services is no longer willing or able to support unnecessarily huge armies of six-figure paperweights.

And what about all those 20- and 30-something associates who can no longer formulate excuses — ­ But I’m paying off my law school debt while I figure out what I want to do! — ­ to remain in the kinds of jobs that so many of my law firm friends describe as “soul-crushing”? For many lawyers at law firms, particularly those who spent the early part of their careers toiling in structured finance departments and contributing, in the end, nothing to nothing, this recession may be the thing that delivers them from more 3,000-hour years of such drudgery as changing the dates on securitization documents and shuffling them from one side of the desk to the other.

Like a relationship gone bad, clearly hopeless to everyone but the imprisoned, it often takes a forced exit to break the leash of inertia that collars so many smart law graduates to mind-numbing work. So don’t pity these people. What they needed all along was liberation. Now they have it.

-JH