How much do law firms save by laying off lawyers and staff? The National Law Journal asked around the find out.
Law firm leaders and industry consultants say a firm cuts costs by an average of $250,000 for each attorney let go. For each legal assistant or other staffer laid off, a law firm saves about $100,000…
For most big law firms, about 85% of their budget goes to rent and personnel costs, say firm leaders, which means that the money saved by scaling back on copies, car services, partner retreats and marketing comes from a small percentage of their revenue.
The story says many firms hope to decrease headcount by attrition, but this is often not enough.
…it is cheaper to have attorneys leave on their own accord than to lay them off. Severance packages that firms are giving to pink-slipped lawyers vary, but the firm chairman said that, in general, every $10 million saved in compensation is offset by $7 million paid in severance.
Via The NLJ via ABA Journal.