Kirkland & Ellis, Ropes & Gray Throw Associates Under the Bus

What’s startling is not that layoffs persist in Big Law, but the way some firms are discarding their talent like yesterday’s iPhones.

You don’t have to be an economist to know that Big Law is due for a correction. After hitting the jackpot during the pandemic, law firms are reeling from the slagging economy. Last year, initial public offerings in the US were down more than 95% from 2021, and there’s scant evidence this year will see a big improvement.

And in the first quarter, global M&A activity dropped to its lowest level in more than a decade. Add inflation, recession fears, and surging associate salaries to the mix—and bingo: layoffs.

It’s that simple and obvious. Yet some firms want us to believe their layoffs have nothing to do with the vicissitudes of the market.

The cuts “were not layoffs,” a spokesperson for Kirkland & Ellis told Bloomberg Law after recently firing an unknown number of associates. They were “performance-based decisions,” the firm insisted, “resulting directly from our attorney review process, just like we do every year for all attorneys at all levels.”

Ropes & Gray made a similar statement to various news outlets after it cut some jobs this month: “The quarterly performance management process is a part of the normal course [of] our business operations. We continue to use our same merits-based evaluation process.”

Nothing to see here. Just business as usual? What baloney.

Stigmatizing Redundant Lawyers

“Big Law was eager to throw bodies at the burgeoning economy not long ago,” Steven Harper, a former Kirkland & Ellis partner who writes about the legal profession, told me. “They were good enough to do the work once upon a time, but when the economy changed, they’re not.” He calls the performance explanation a “red herring.”

As anyone who’s endured the corporate ritual of performance review knows, there’s always “room for improvement,” a sort of gotcha section that can be deployed anytime to justify a firing, even for solid performers.

While some of those cuts might be based on performance shortfalls, it seems gratuitous—and cruel—to label lawyers they wooed during the boom years as subpar.

The profession is notorious for its unhealthy obsession with perfection: Minor typos in a document are career-ending, and a bad grade from law school a perpetual badge of shame. These firms must know they’re stigmatizing redundant lawyers and making their job search harder. So why are firms taking this route?

To me, it’s transparently self-serving. It’s about signaling to clients, recruits, and their own internal audience that their firm is superior, somehow above the economic fray. Under this narrative, fired associates have no one to blame but themselves.

And yes, it’s always about the money. But firms loathe admitting the obvious: that dumping expensive, unproductive lawyers affects partners’ bottom line. It’s short-term and wasteful, but young lawyers are expendable commodities in the Big Law scheme. It’s the business model.

‘Don’t Owe Them Anything’

“There’s the attitude in big firms that we don’t owe them anything; we pay them well,” Harper said. At the same time, he added, “they’re afraid to say that they’re worried about their falling PPPs, because it might reflect that they’re just greedy and not willing to carry people through a tough period.” (Not to worry, the partners are doing just fine. Kirkland’s profit per equity partner is $7.5 million, while Ropes’ PPP is $4.2 million, reports The American Lawyer.)

While there’s room for debate whether it’s moral for firms to dump the young lawyers they worked so hard now that the economy is shaky, I’m posing a simpler question: Shouldn’t firms fire lawyers more humanely?

It seems they should have started with the premise of doing no harm. Perhaps it’s better to say nothing at all, which is what most firms seem to be doing. Cadwalader Wickersham & Taft has also taken that approach, despite escalating rumors fueled by anonymous sources, reports The American Lawyer, that the firings are due to performance. (Shouldn’t the firm quell those rumors?)

“The polite thing to do is to say that lawyers have been let go, including some very strong performers,” former Morrison & Foerster chair Keith Wetmore, now a managing director at recruiting firm Major, Lindsey & Africa, told me.

Let me make a radical suggestion: be honest. It’s been done. After Gunderson Dettmer cut 10% of lawyers, paralegals, and staff positions this month, managing partner David Young sent an internal memo citing “current macroeconomic and market conditions” for the layoffs.

Earlier this year, Goodwin Proctor also made clear that its “reduction in force” was not performance-related in a firm memo. And Cooley called its cut of 150 attorneys and staff last fall a “painful but necessary” response to the slowing demand for legal services.

See, it is possible to do the more decent thing. But that would entail admitting that your firm is fallible—which, for some firms, is unthinkable.