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The United States Law Week

Legal Job Losses Shoot to 64,000 as Pandemic Takes Its Toll

May 8, 2020, 7:20 PM

As coronavirus cases surged, the American legal sector lost 64,000 jobs between mid-March and mid-April—an increase from only 1,700 reported a month ago—as law firms and other legal employers struggled against a plunging economy.

The Labor Department’s Bureau of Labor Statistics figures released Friday capture the first weeks of the pandemic taking hold in the U.S., pounding broad swaths of the domestic jobs market.

A dozen years ago, during the Great Recession, it took two years, 2008 and 2009, for the legal services sector to reach 59,000 job losses.

Law firms have acted quickly to impose a range of cost-cutting measures, including furloughs as well as cutting staff pay and trimming partner compensation. But most, so far, have avoided taking the harsher measure of layoffs.

BakerHostetler eschewed layoffs but trimmed partner draws, and made across-the-board pay cuts of 10% for its attorneys and staff who earn over $80,000, or $70,000 in some markets likely through the end of the calendar year, the firm said in a statement.

Another large firm, Hogan Lovells cut pay for U.S. equity partner draws by between 15% and 20%, and non-equity partners and most other attorneys by 15% as of June 1, while Mayer Brown instituted a 15% salary cut for lawyers except for its equity partners, both firms said in separate statements.

Those cuts also hit Mayer Brown business services staff earning more than $200,000. In March, that firm said its equity partners had agreed to a 20% reduction in monthly compensation draws, and suspension of their distributions for the first half of this year.

Eversheds Sutherland, a global law firm with offices in 34 nations, has been among those firms opting for furloughs, pausing the employment of 40 staff members this week.

In a statement, Eversheds said it hoped the furlough period “will not exceed three months.” The firm said it would continue to provide health insurance and pay insurance premiums for the workers during that period.

Some legal tech companies have cut employees. Intapp, a Palo Alto, Calif.-based tech provider that works closely with a number of Big Law firms, in recent weeks laid off more than 45 workers, or about 5% of its workforce, it said.

So far, job losses in the legal services sector, which employs just over a million people, are low compared to the overall category of professional and business services, whose mid-April losses were in excess of 2 million, especially in the administrative and support areas.

To contact the reporter on this story: Elizabeth Olson in Washington at egolson1@gmail.com

To contact the editors responsible for this story: Tom P. Taylor at ttaylor@bloomberglaw.com; Andrew Harris at aharris@bloomberglaw.com.

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