Cost Cutting Continues at Biglaw

innovatorslaw_logoIn the past six months, a majority of AmLaw100 firms have announced both layoffs and delays in start dates for the class of 2009 (in some instances, by as much as a year).  There have also been rumors that salary cuts are on the way, though much speculation that no one wants to go first.  Well the rubicon has been crossed.  Womble Carlyle, a firm with 530 lawyers and a large presence in the Southeast, has announced that it will cut some associate salaries by 10 percent.

A firm memo states that ” like the business world in general, law firms must be able to do more with less.”  (As reported in Above the Law and confirmed by the ABA Journal).  The memo goes on to describe the “transformational” changes that are occurring in the legal profession.  The memo also states:

The world of large law firms…has changed forever.  Clients are increasingly focused on managing the costs of all legal matters and have developed a variety of tools to accomplish this objective…Successful firms will be those who continuously strive to improve efficiencies and find ways to minimize costs without reducing the overall quality of the services they provide.

There is no mention in the memo of finding other ways for lawyers to better leverage their time (or of finding more efficient ways to deliver legal services).  But clearly that is the subtext.  What isn’t stated, but which is implicit, is that in order to survive, large firms need to continue to find ways to unbundle high value services from lower value services.  The law firm gets to remain the “Front Office”.  But other vendors/professionals need to be brought in to deliver the “Middle Office” and the “Back Office”.


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