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Layoffs Hit Husch Blackwell

Nov. 21, 2017, 7:32 PM

One of the country’s larger firms, Husch Blackwell, based in Kansas City, Mo., is planning to pare some 40 lawyers from its ranks through layoffs and retirements, the firm confirmed Nov. 21.

The positions being eliminated include partners and of counsel, not associates, the firm said. This is the second set of layoffs at the firm, which in 2012 demoted 25 equity partners.

“Given our firm’s size and scale, these attorney transitions are expected and normal,” according to the Husch Blackwell statement. The firm was No. 96 in the most recent American Lawyer list of top 100 firms.

“Husch Blackwell’s leadership continuously evaluates whether the firm’s services match trending market demands and client needs, and the firm periodically increases and decreases capacity across practices as needs dictate,” according to the prepared statement by firm chairman and chief operating officer Greg Smith and firm chairman Maurice Watson.

The downsizing came after good results in 2016 when firm revenue grew 20 percent, and its headcount rose to 612 lawyers due in part to the merger with Whyte Hirschboeck Dudek, a Wisconsin-based firm. However, due to the rapid expansion of partners, the firm’s profits per partner fell last year, by 8 percent from 2015, to $565,000, according to data from the American Lawyer. And revenue per lawyer also dropped by nearly 3 percent, to $570,000.

The firm’s fortunes follow a pattern that law firm partnerships often undergo, which is disruption after a merger. ALM Intelligence tracked this pattern in a March 2017 study.

The study also found that among the largest 200 firms, 30 percent experienced a decline in gross revenues five years after they merged with another large firm, and almost three-fourths of such firms reported profits per partner and revenues per lawyer that were less than their peer firms.

Those findings have not quelled the number of law firm mergers and acquisitions, which continued apace in the third quarter of 2017, according to Altman Weil MergerLine , which tracks such pairings. There were 24 such combinations announced between July and September, for a total of 76 deals through the first nine months of the year–the largest number ever recorded for the same time period

Husch Blackwell has grown through a series of mergers over the past decade. Last year’s merger with Whyte Hirschboeck led to that firm’s former chief executive Paul Eberle being tapped as Husch Blackwell’s leader starting in February 2018 . His appointment drew attention because he is not an attorney, and will have less than two years at the firm by the time he takes over the top post.

While law firms trim their ranks, often support staff, in reaction to fluctuating or declining revenues, Husch Blackwell’s action comes on the heels of the latest federal data on the number of jobs in the legal sector. In October, the number of such jobs dropped by 1,100, according the U.S. Bureau of Labor Statistics .

Contact the reporter responsible for this story: Elizabeth Olson at egolson1@gmail.com.

Contact the editors responsible for this story: Casey Sullivan at csullivan@bloomberglaw.com and Nicholas Datlowe at ndatlowe@bna.com.