Cooley Law Firm Announces Layoffs of 150 U.S. Employees, Including 78 Lawyers
Silicon Valley-Founded Law Firm Cooley Cuts Staff Amid Drop in Client Demand
Silicon Valley-founded law firm Cooley has announced that it has laid off 150 U.S. employees, including 78 lawyers, due to a drop in client demand for the firm and the broader U.S. legal industry. The layoffs come as many large tech companies, a core Cooley clientele, have also been trimming their workforces.
According to Joe Conroy, Cooley’s chairman and CEO, certain practice groups at the firm were “substantially overbuilt” after aggressive hiring to meet soaring demand in 2020 and 2021. “Simply put, we hired more talent than we can reasonably develop, train and deploy against current and anticipated client demand,” Conroy said in a firmwide email reviewed by Reuters.
None of the attorneys who were laid off were partners, and a majority of the reductions came from the firm’s business department, which handles M&A work, according to a person familiar with the layoffs. It is worth noting that Cooley had revenue of $1.98 billion last year and had more than 1,200 attorneys, according to trade publication American Lawyer.
The layoffs at Cooley come as many large tech companies, a core Cooley clientele, have also been trimming their workforces. Facebook parent Meta Platforms Inc said earlier this month it would slash 11,000 jobs, and Amazon.com Inc said it had laid off some employees in what could preview much larger cuts.
The demand for legal services has dropped overall, as many U.S. law firms went on a hiring spree last year to keep up with record-breaking global M&A activity that topped $5.9 trillion in deals. However, that transactional work slowed in 2022 and the demand for legal services has dropped overall, as Wells Fargo’s Legal Specialty Group found earlier this month.
Conroy said the firm’s recruiting success “proved to be misaligned with the unexpected economic downturn that has occurred and will likely persist well into the year ahead.” The employees who have been laid off will receive severance benefits and other services, according to the CEO.
Clearly, the legal industry is facing a demand dip, and this is evident not only in the layoffs at Cooley, but also in the cuts made by large tech companies and the overall drop in demand for legal services. As the economic downturn persists well into the year ahead, it will be interesting to see how the legal industry adapts and responds to these challenges.
However, it is also important to note that this is not the first time the legal industry has faced a downturn, and it will likely not be the last. The industry has always been able to adapt and find new ways to serve its clients and meet their changing needs. Law firms that can anticipate and respond to these changes will be the ones that thrive in the future.
In conclusion, while the layoff at Cooley is unfortunate, it reflects the current economic downturn and the drop in demand for legal services. The legal industry will have to adapt and respond to these challenges to thrive in the future. The employees who have been laid off will receive severance benefits and other services, and the firm will continue to focus on developing and deploying the talent it has to meet the changing needs of its clients.
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