Silicon Valley-based law firm Gunderson Dettmer has recently announced layoffs affecting 10% of its attorneys, paralegals, and staff. The move was made “in response to current macroeconomic and market conditions,” according to a memo viewed by Bloomberg Law from Gunderson managing partner David Young. The firm made its name working with emerging companies and venture capital backers, advising on deals involving Andreessen Horowitz and Bain Capital, among others.
The layoffs at Gunderson are not limited to experienced attorneys. According to three sources familiar with the situation, the cuts include first-year associates who began their tenure at the firm in January after a three-month delay. Young said incoming associates graduating in the spring might have their start dates deferred on a case-by-case basis. The firm is providing severance and semi-monthly stipends for any deferred incoming associate.
According to figures reported by the American Lawyer, the firm has 393 attorneys across nine offices. The layoffs come as a response to the recent slowdown in demand in the legal industry. Like other major law firms, Gunderson added to its associate ranks to meet spiking demand in 2021. However, it was forced to delay the start date for the first-year class as markets turned and competitors trimmed their headcount.
Gunderson’s layoffs are not an isolated event in the legal industry. Kirkland & Ellis, the world’s largest law firm by gross revenue, also announced a round of associate reductions after mid-year performance reviews. This year has seen a marked slowdown in law firm activity, with many firms struggling to maintain the high demand experienced during the boom in 2021. Some firms have had to resort to layoffs to adjust to market conditions.
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The legal industry faces other challenges, including the increasing competition from alternative legal service providers and the trend towards in-house counsel. The industry is undergoing a significant transformation, and law firms must adapt and innovate to remain relevant.
In response to the current market conditions, Gunderson has made the difficult decision to lay off some of its attorneys, paralegals, and staff. The firm has also deferred the start dates for incoming associates graduating in the spring. These moves reflect the current state of the legal industry, which is experiencing a slowdown in demand. Law firms must navigate this challenging landscape and find new ways to stay competitive and relevant.