Two months ago, Big Law associates were hot commodities—they had the luxury of choosing between major firms who offered to let them work and live wherever they like while receiving generous bonuses. However, now some of them are out of jobs.
The hiring frenzy has swiftly turned to an anxious moment for junior lawyers, as news of recent layoffs at highly profitable firms is slowly seeping across the industry. There are warning signs that the pressure to cut headcount will only grow in the New Year.
There’s no consensus on how many firms will make layoffs and how deep the cuts will be, other than that few expect a Great Recession-style bloodletting. The moves so far appear to be limited to correcting over-hiring that occurred during the boom.
In November 2022, Silicon Valley-founded law firm Cooley said it has laid off 150 U.S. employees, including 78 lawyers. Joe Conroy, Cooley’s chairman and CEO, said in a firmwide email that certain practice groups were “substantially overbuilt” after aggressive hiring to meet soaring demand in 2020 and 2021. None of the attorneys who were laid off were partners.
Kirkland & Ellis, one of the best-performing firms and biggest hirers during the boom time, has also cut midlevel associates in recent months, according to sources familiar with the matter.
Cooley and Kirkland said the cuts were results of an annual review process. Sources familiar with both firms, including associates, described the cuts as responses to a precipitous drop in demand for work this year in major 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. Profit will remain under pressure at law firms until major practices like capital markets, M&A, and real estate recover.