It is the latest in a string of mass layoffs plaguing the legal industry
Global law firm Reed Smith joins the growing number of BigLaw firms who have resorted to shaving off their workforce in response to the slump in demand for legal services.
The firm, headquartered in Pittsburgh, Pennsylvania, laid off around 50 lawyers and staff all in all.
“These decisions are in response to a reduced level of demand for legal services across the industry,” a spokesperson from Reed Smith said on Wednesday. The same spokesperson explained that the decision was aligned with the firm’s continuing goal of “best positioning [Reed Smith] to meet its commitment to excellent client service while prudently managing our business”.
The firm also said that it was providing all terminated employees with severance benefits and services that would help them locate and transition into a new job, and that the total layoffs amounted to not more than 2% of its global workforce.
Two percent of Reed Smith in this case reportedly equated to 20 staff members and 30 lawyers.
Jennifer Henderson, who founded the legal recruitment firm Hatch Henderson Fivel, observed that Reed Smith’s announcement was surprising despite the ongoing trend of Biglaws laying off their lawyers because firms that fired were usually embedded in the tech industry – such as Silicon Valley-based Gunderson Dettmer, which made a name for itself advising start-ups before announcing last April that it was letting go of 10% of its staff – or had been one of those who liberally hired throughout 2021 and were only now beginning to feel the full disproportion between lawyer supply and demand.
Reed Smith fit neither of these descriptions, Fivel said. She concluded that the firm’s layoffs proved that law firms – rather than associates – now wielded the power.
BigLaw firm Cooley – a top hirer during the pandemic – laid off over 100 attorneys and staffs just across its U.S. offices in 2022, Bloomberg Law reported. Davis Wright Tremaine laid of over 20 employees in February, while Dechert laid off just under a hundred professional staff members last month.
Kate Reder Sheikh, a legal recruiter for Major, Lindsey & Africa, agreed that it was the firms who over-hired during the pandemic that were now resorting to mass layoffs. The demand for young talent and spike in legal activity that shaped the professional terrain in 2021 had both run dry. Law firms now had the time to figure out what was best for the firm’s pockets rather than the associate’s pay check.
“These are probably not the last reductions in force that we’re going to see,” Sheikh said.
While Henderson sympathised with today’s associates, she told Bloomberg Law that it was “a smart move” for firms to start making sure that the associates they chose to invest in had work to do.
