The legal industry is facing a difficult moment, as many junior lawyers are losing their jobs due to recent layoffs at highly profitable firms. This trend is expected to continue into the New Year, as firms are under pressure to cut headcount to correct over-hiring during the boom. While it is unclear how many firms will make layoffs and how deep the cuts will be, industry analysts and recruiters have noted that the firms that are seeing the most significant impact are the ones that over-hired last year and now that work has slowed.
Cooley LLP, a law firm known for representing Big Tech clients, recently laid off an unspecified number of lawyers, mirroring the cost-cutting moves taken by its clients. Kirkland & Ellis, one of the best-performing firms and biggest hirers during the boom time, has also cut midlevel associates in recent months. Gunderson Dettmer, the tech-focused Northern California firm that already delayed the start of its incoming first-year associate class, has also trimmed its associate headcount.
According to Cooley and Kirkland, the cuts result from an annual review process. However, sources familiar with both firms, including associates, described the cuts as responses to a steep drop in demand for work this year in significant product areas, including initial public offerings and mergers and acquisitions.
News of more layoffs is likely. Sources say the list of firms that have already laid off attorneys is longer than what’s been publicly reported so far. This is a stark contrast to just a few months ago when Big Law associates were hot commodities and had the luxury of choosing between major firms who offered to let them work and live wherever they liked and dangled hefty signing bonuses.
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The hiring frenzy has swiftly turned into an anxious moment for junior lawyers. This is a difficult time for many associates just starting their legal careers and have high expectations for their future in the industry. The situation is also a reminder that the legal industry, like any other, is subject to fluctuations in demand and economic conditions.
Despite the current challenges, it is important to remember that the legal industry is still a vital and robust sector that plays a critical role in the economy. The industry is expected to adapt and evolve, and there will likely be opportunities for those willing to be flexible and adapt to changing conditions.
In conclusion, the legal industry is facing a difficult moment as many junior lawyers are losing their jobs due to recent layoffs at highly profitable firms. The pressure to cut headcount is expected to grow in the New Year, but it is important to remember that the industry is still a vital and robust sector that plays a critical role in the economy. The industry is expected to adapt and evolve, and there will likely be opportunities for those willing to be flexible and adapt to changing conditions.
REFERENCES:
Big Law Layoffs Look to Correct ‘Over-Hiring’ in Pandemic Boom
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