As Furloughs Become Layoffs, What’s Next For Firm Staff?

Law360 (September 25, 2020, 6:01 PM EDT) — Furloughed law firm staff may have been hopeful that their employers would be able to bring them back after weathering the coronavirus pandemic, but many of them are now realizing that they are being laid off, and permanently.

In the recent months, several BigLaw firms, including Seyfarth Shaw LLP, Baker McKenzie, Davis Wright Tremaine LLP and Nixon Peabody LLP, have announced that they have rolled back previous financial cuts but simultaneously confirmed layoffs, particularly affecting staff.

And as lawyers have been forced to become more self-sufficient during the COVID-19 lockdown, experts say some of those who were let go may be squeezed out of the legal industry forever.

“During this time, if positions or jobs are being eliminated, I would not anticipate that there would be a complete recovery or restoration to what things were like pre-COVID,” said Nakia Bradley-Lawson, president of legal professionals association NALS Inc. and director of operations and facilities at Gevurtz Menashe Larson & Howe PC, a Portland, Oregon-based firm focusing on family law and estate planning.

Bradley-Lawson said that any roles that aren’t “a billable position” are at risk of being cut by firms as they look to reduce overhead. With more firms adopting automation and outsourcing services, staff who provide traditional administrative support are most likely to be first on the chopping block.

“I think that it’s going to be very stiff competition in that realm of the job market,” Bradley-Lawson said. “So, I would say their chances [at getting another job in the legal industry] are half now than they were before.”

And because a large portion of legal support staff do not have degrees, those who can’t get a job in legal may have to turn to other industries, like real estate, that have fewer barriers to entry but also less financial stability, she added.

Although it may be difficult for the staff who lost their jobs, for many firms, the downtime caused by the pandemic also creates the opportunities for them to do a “talent refresh,” Bradley-Lawson and other experts pointed out.

“If you’ve been hesitant about ‘do we have the right people, do we have the best people,’ this gives you time to recalibrate a little bit and bring in the people you need,” said Frank Gillman, a former BigLaw chief information officer who now works at consulting firm Vertex Advisors.

The pandemic is has forced many lawyers to become more proficient with technical tools than they would normally have to be, Gillman said. As a result, they have become more self-sufficient and may be realizing that they don’t need as much assistance as they used to.

“If you become more self-sufficient in every part of your practice, by definition, do you need as much administrative help as you might have needed before?” he said.

Staff that are not “multiskilled” will have a hard time adapting to the changes at their firms, Gillman said, giving an example that some technical roles will likely shift from traditional IT support to have more of a focus on data strategy. He added that as firms become more information- and tech-savvy, they are looking for skills such as knowledge management, data analysis, business development and marketing.

“I think what attorneys are going to be looking for is, can you provide … the ‘intelligence’ I need to be more successful, rather than the more traditional administrative support type of needs,” Gillman said.

Kent Zimmermann, a principal at legal industry consultancy Zeughauser Group, noted that the pandemic had led some firms to make “permanent changes” to their staffing structures, such as changing the ratio of legal assistance to lawyers, which he said has long been “outdated.”

“In many firms, there is room to update the ratios to the needs of today, considering the role technology plays and the evolution of how lawyers work,” Zimmermann said. “So, firms that are updating their staffing ratios, that’s likely to be a permanent change.”

Zimmermann added that such changes have included developing resource centers to share administrative services and outsourcing legal support services.

In one such instance, Winston & Strawn LLP confirmed earlier this month that it is forming a new resource center, called Winston Resource Center, to provide “24/7 professional support services” for lawyers and clients.

However, as the result of the firm’s “innovative” restructuring, it also eliminated some jobs. The firm declined to say how many, but in a statement to Law360, Winston & Strawn said it had offered early retirement packages to some staff members and helped others reapply for the newly created jobs at the resource center.

“The common thread is firms are interested in lowering their fixed overhead, especially in an uncertain time, but also because of the dispersion in profitability … so they have a lot of pressure to get their expenses down where they can, to be as competitive as they can be on profitability,” Zimmermann said.

Such changes aren’t just happening in BigLaw; some small and midsize firms have also been struggling to keep up with the challenges posed by the pandemic, said RJH Consulting legal practice development consultant Beth Slate, who works with boutique and medium-sized firms.

“In BigLaw and SmallLaw both, we are looking at not just profitability … but [at] have we adjusted to being more people-focused, and at the same time, we are learning to be more technologically focused,” Slate said.

However, unlike staff at BigLaw, Slate said the support staff at small or midsize firms are more likely to be “generalists” who have more than one skill, which gives them a competitive edge in a tough job market.

“What’s happening and what COVID-19 is doing is … showing which employees need a lot of structure and support, and which ones don’t, and that’s going to have an effect on the industry,” Slate said.

–Additional reporting by Emma Cueto. Editing by Alanna Weissman and Brian Baresch.