Lawyers Not Alone In Suffering Layoffs
Cuts in support staff may change way that some offices operate
By DOUGLAS S. MALAN
The downward spiral has become dizzying. Law firms are shedding personnel at an alarming rate during an economic downturn that has slowed business across many practice areas.
But while the focus has been largely on the thousands of lawyers who have lost jobs nationwide, the fact is that many firms have tried to stave off deeper cuts in their attorney ranks by shedding support staff.
For example, Day Pitney shed 66 staffers late last month, including 31 in Connecticut. When Updike, Kelly & Spellacy recently announced layoffs, three secretaries got pink slips along with two associates.
Observers say the impact of such cuts will be seen immediately on many levels, with remaining staff members taking on more responsibilities, lawyers handling more of their own research and clerical chores, and everyone wondering when and where the next shoe is going to drop.
Eliminating staff positions means that in some firms, each paralegal and support staff member will now be assisting more attorneys than before. Some firms have been tied to a two-to-one ratio of support staffers to lawyers, but many are now staffing at four-to-one ratio levels or higher, said David Sturgess, managing partner of Updike, Kelly & Spellacy in Hartford, whose recent layoffs kept the firm’s staff-attorney ratio at three to one.
The effect of staff layoffs “varies from firm to firm,” he said, based partly on how much work the firm asks its lawyers to perform on their own, such as document preparation and review.
“We’ve always looked closely at our staffing needs and how they fit with the workload of our lawyers,” Sturgess said. “I don’t think what we did will have an impact.”
Law firm management consultant Peter Giuliani said that, in general, administrative tasks likely will fall into young associates’ laps when staffers are cut, but “nine times out of 10, they’re not cutting secretaries,” Giuliani said. More often, he noted, the job cuts are in IT, billing or other areas that can be outsourced.
“In my experience, secretaries are usually a protected class,” said Giuliani, of Smock Sterling in Westport.
A number of significant New York law firms that have recently announced significant layoffs among their librarian staff, Giuliani said, which leaves more attorneys to conduct their own legal research.
Close To Home
Janice Favreau, who is president of the Central Connecticut Paralegal Association, has heard about the effects of job cuts through her group’s membership.
“We have two board members who have suffered layoffs” recently, Favreau said. “It’s hitting close to home, and it’s pretty devastating that we’re seeing it in our little corner of the world.”
She noted that paralegals now will be supporting three and four attorneys instead of one or two, leading to increased workloads and stress levels. But for the paralegals who are left in the office, Favreau said, “they’ll be grateful to have a position and they’ll have to put up with it.”
Favreau also believes that attorneys will start taking on tasks that they once passed along to others, most notably the legal research. And while attorneys can bill at a higher rate for such work compared to paralegals, firms could be placed in a sticky situation if clients who are ever-vigilant of their bottom lines start complaining about inflated rates for that research, Favreau pointed out.
Within the CCPA ranks, Favreau said, “we’re all just holding our breath” in terms of future cuts in staff. She also believes the association’s membership numbers will drop as law firms decline to pick up the tab for annual membership dues, which are $80.
In January, Pepe & Hazard, which announced that it was freezing rates for existing clients this year, laid off two attorneys and two staff members “due to lack of work,” according to a firm spokeswoman.
One of the people laid off was high-ranking construction litigation paralegal Michael Wallace, a former CCPA president. For 10 years, he supported the firm’s litigation in cases throughout the world, but he was told one day in January that it was his last day on the job and he left with a 10-week severance package.
Law firms “seem to hold on to the associates and get rid of the support staff first,” Wallace said. “Associates always get a lot of paralegal work, especially in times like this, because they’re making money. It was a business decision and I don’t hold it against” the firm.
Day Pitney’s recent layoffs affected nearly every type of support staffer, especially administrative assistants and employees who handled finances, said co-managing partner James Sicilian.
Day Pitney determined that in the sinking economy, it was carrying too many people who stayed on after the firm was created from a 2006 merger of Day, Berry & Howard and New Jersey’s Pitney Hardin. “We were overstaffed,” Sicilian said. “The workload of the people who left will be picked up by other administrative staff.”
He said more cuts in the legal industry throughout the year certainly would not surprise him. “In this economy, I don’t think anything could really be surprising,” Sicilian said. “Just based on what you see and the low level of business in a lot of areas, you’d expect everyone’s looking at their operations.”
Fewer Faxes
One major reason why support staff can be streamlined is lawyers’ willingness to use technology for tasks as simple as typing a document or sending e-mail to a client. So there’s less need these days for administrative assistance to take dictation and write letters.
At Day Pitney, more advanced financial systems software led to a need for fewer people to handle billing, Sicilian noted.
Sturgess said Updike Kelly’s staffing ratio is based on the firm’s requirement that lawyers of all ages get comfortable with basic technology for communications rather than relying on support staff.
Boston-based Bingham McCutchen announced last year that it was cutting 10 staffers in its Hartford office and regionalizing resources with its New York office around the time that an additional 17 staffers were laid off in San Francisco.
Geoffrey Howard, managing partner of the San Francisco office, told The Wall Street Journal in May that the cuts were tied to the manner in which people rely on electronic communications.
“We don’t send and receive nearly as many faxes as we did five years ago,” Howard said. “And that has an impact on staffing and on how we organize ourselves.”
But Giuliani, the law firm consultant, said the broad swath slashing of jobs can be dangerous if firms are too focused on making budget in one particular month without keeping an eye on the bigger picture.
“The key thing is that at some point you have to realize that 2009 is going to be a down year for partners and you just have to hunker down,” Giuliani said. “You’re not going to shrink the firm to greatness.”•
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