Silent phones, closed doors and pink slips even for partners, retooling the way major law firms do business is top priority across the country. According to an article in the New York Times last Sunday- the nation's 20 top-grossing law firms, 12 of which are in New York, dropped their average profit per partner in the first quarter of 2009 for the first time since 1991.
The reason? Most of the top firms are completely out of balance; with too many associates with nothing to do. Associate pay is the biggest component of law firm overhead. On September 15 of last year, when Lehman Brothers went under- everything hit a wall.
Three options are being employed by major law firms right now; do nothing, which risks a firm's survival, couch layoffs as decisions based on poor performance; or own up to the crisis and big large numbers of lawyers a harsh but needed goodbye.
The days of throwing associates en masse at certain cases fattening the fees are over and just to survive many firms are employing leaner strategies like flat fees for services. What is your firm doing to survive?
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