Among the negative factors causing those were poor collections on accounts receivable and high operational expenses.
Partly as a result, reports AmLaw, Dentons cut loose 20 partners so far this year. After January, they were informed that their employment was over and compensation packages negotiated. That reduction-in-force (RIF) follows the earlier layoff of staff.
However, Dentons contends it is in a growth mode. That includes recruiting and hiring on new lawyers. Bringing new skills in profitable niches could improve the bottom line.
Reflection: One wonders if this RIF is directly or indirectly related to the Cravath bump of 2016.
After Cravath raised first-year associate salary to $180K annually, many other large law firms followed. That has been at a time when growth in the legal sector has been essentially flat.
It was lawyer-journalist Joe Patrice at Abovethelaw.com who predicted possible trouble ahead. He speculated that this bump could come out of partners' hides. In the worst case scenarios, they would be forced out. Here is Patrice's article.
Perhaps more law firms should have resisted joining on the conga line of the $180K starting salary. Common sense tells us there will be more partner purges in 2017. For three consecutive months the Department of Labor reported loss of jobs in the legal sector.
But there seems to be no safe harbor.
The Trump Administration is targeting government jobs. Many lawyers currently are government employees. My acquaintances in New York Metro outplacement told me of in-house senior lawyers getting laid off. Corporate law departments frequently face the same kinds of cost-efficiency challenges as other staff functions such as public relations and human resources.
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