Legal Marketing & PR

Law firm lays off more lawyers and staff

By Edward Poll, J.D., M.B.A., CMC

Another law firm laid off a large number of folks. This is depressing. I think there is a better way.

Coincidentally, I read yesterday about Toyota in the Wall Street Journal.  Toyota's sales are decreasing; they've closed a plant. They did not lay off workers. Rather than giving them paid leave, as GM and Ford have done on occasion, the workers come into the plant and take education courses to improve their skills and to do deferred maintenance. When it is time to reopen the plant, their workers will be even better skilled and the plant will be even more efficient. This is part of the Japanese philosophy of continuous improvement. Most importantly, Toyota employees feel a greater loyalty to the company.

Large law firms hire new lawyers, then terminate senior lawyers. One managing partner termed this technique as "culling."  But, each lawyer laid off cost the law firm between $250,000 and $500,000, according to every managing partner I've talked to. This goes right to the "bottom line." Firms looking to cut expense in order to improve profits should look no further than their hiring and firing practices!

Rather than fire experienced lawyers, why doesn't the law firm offer new education opportunities for its lawyers and its staff? New lawyers don't know how to "find the courthouse." Experienced lawyers know not only where the courthouse is, but they also know the culture of the law firm. There is much they already know, and for which the law firm has already paid. It's a lot less expensive to educate experienced lawyers in a new practice area than it is to train a brand new lawyer.

And, they would improve the morale of those in the firm, increasing the loyalty to the firm. This would result in better service to clients as well as increased profits.

What is wrong with the current picture? Why is it that law firm management has yet to understand what American industry already knows? I have heard a number of explanations, but none of them make sense to me. Perhaps you can help me on this.

Full post as published by Law Biz Blog on October 14, 2008 (boomark / email).