Redundancies have been announced thick and fast recently (have a look at this layoff tracker for firms or this one for general misery if you feel the need). Alongside these announcements firms have been at pains to emphasise their reasoning behind such moves. Law firms cite declining demand for legal services, decreased fees for the work remaining and a lack of usual attrition as reasons for axeing associates. Whilst the need to carry out some restructuring in a recession may be self-evident to some extent, specultaion has still been rife when it comes to the actual motives at some firms.

One US partner has been pretty frank about the situation in the National Law Jounal :

"There’s only so much you can save by pulling the tea and cookies out of the conference room," said the chairman of a major U.S. law firm that has laid off attorneys during the economic downturn. In order to speak candidly about his firm’s finances, he requested anonymity for this story. "The rent you’re stuck with, so you’re left with this huge megillah of compensation," he said.

Stating what many associates already suspect…

Because associates are clinging to their positions as the economy declines, law firms are finding it necessary to replicate the attrition they’ve come to expect, he explained. "We have an entire machine built around 25% attrition," the firm chairman said. "We have to engineer that just to stand still. The only comfort one can find in this is that you get the attrition you want."

However, in the same article Friedrich Blase, an executive partner with KermaPartners, a consultancy emphasised a point that associates everywhere have probably considered at some time…

"If you think about saving money, culling associates is really not the big game. It’s the easy game," he said. Blase added that, under his scenario, a mere 3% savings requires a firm to lay off 10% of its associates.

The tougher choice is to make cuts at the nonequity and senior counsel levels, he said. Not only are those attorneys typically very expensive for law firms during slow times, but some of those lawyers, out of desperation, hoard work from the attorneys below them, he said."

Speaking of redundancies, The Lawyer reported yesterday that Clifford Chance has accelerated its redundancy consultation by two weeks. Associates apparently voted in favour of bringing the consultation close forward after the firm offered a sweetener to the redundancy package.