Lawfirms Not Immune to Economic Downturn
Overshadowed by layoffs in Florida’s construction, services and retail industries, lawyers are increasingly feeling the impact of the state’s worst recession in more than three decades.
Tampa-based Holland & Knight has found itself listed among the nation’s top 10 biggest law firms with the most layoffs in recent months, having shed 70 attorneys and 243 staff, according to the industry website Lawshucks.com’s “layoff tracker.”
Fort Lauderdale’s Ruden McCloskey boasted earlier this year about dodging what the legal community dubbed “Black Thursday” -- Feb. 12 -- when six firms across the U.S. dismissed 700 attorneys and staff.
But late last month, Ruden dropped six lawyers – just weeks after having let two other attorneys and 18 staff go, as the roughly 175-lawyer firm with 11 Florida offices began retrenching in the slumping economy.
“Litigation and bankruptcy law is still going strong,” Carl Schuster, Ruden’s managing partner, said this week. “But anything dealing with banks and real estate has really slowed down. We have to manage the transactional nature of the practice.”
As of July 5, 12,829 people had been laid off by firms nationwide since the beginning of 2008, including 4,985 lawyers, according to Lawshucks.com. The bulk of the layoffs have occurred this year, the legal Website reported.
“We’re seeing plenty of signs that firms are scaling back here in Florida,” said Judith Equels, who directs the Florida Bar’s Law Office Management Assistance Service (LOMAS), which assists attorneys looking to start their own practices.
Weekly requests for the Bar’s so-called “starter kit,” for opening a practice have tripled over the past year, going from one request to about three weekly, Equels said. That’s a sign that an increasing number of lawyers have either separated from a firm, or are in jeopardy of losing a job, she said.
Equels added that while Florida only has five of the nation’s 250 largest law firms, layoffs at national legal giants are believed to be running at almost the 20 percent level. Florida’s big firms are likely doing trimming that meets that national standard, she said.
Although experts acknowledge that numbers are hard to verify, among Florida’s big firms, only Miami-headquartered Greenberg Traurig is believed to have so far avoided layoffs.
In addition, another large Florida firm, Akerman Senterfitt, was financially healthy enough to engage in merger talks earlier this year with a century-old Philadelphia firm, Wolf, Block, Schorr & Solis-Cohen, only to have the targeted firm abruptly go out of business.
So far, layoffs have seemed to have little effect on firms practicing in Tallahassee. The 2,000-plus lobbyists working capital hallways this past legislative session is a number that has remained relatively constant, although as law firms reduce their rosters, the lobbying corps could shrink.
Holland & Knight, for one, is a firm that has had a major state capital presence for decades. But the 25 attorneys in its Tallahassee office have apparently avoided the firm’s belt-tightening.
In eliminating 70 attorneys in February, Holland & Knight said its staffing decisions focused on shrinking practice areas hit by the recession that were not expected to recover quickly, balanced against areas where client demand was increasing.
“If anything, I think lobbyists who represent non-profits, or just a couple of clients, are the ones feeling this recession the most,” said Carl Adams, president of the Florida Association of Professional Lobbyists. “Otherwise, when there’s a squabble over shrinking state funds, like there is now, I think industries are trying to keep lobbyists around so they can get their share of what’s out there.”
That spirit – combined with contractual agreements already in place -- helped maintain the capital’s lobbying corps at roughly full strength this past spring, Adams said.
Still, he acknowledged that as law firms reduce, the lobbying ranks may thin.
“We’ll have a better idea of where things stand by the fall, when people begin planning for the next session,” Adams said.