The COVID-19 global pandemic has a pretty negative economic impact. To keep their cash flow and meet the demands of the coronavirus, big law has been implementing salary cuts, partner draw reductions, furloughs, and even layoffs. Beyond the prudent financial decisions that most in Biglaw are willing to admit, there are whispers and rumors that more is going on.
Yes, it looks like Biglaw is returning to stealth layoffs. As a result of the recession in 2009, firms often used this tactic to save face and cut costs. Even though we are still hearing rumors, Above the Law felt it best to provide a refresher on stealth layoffs to help you spot them when they happen at your firm.
Although some firms assured associates that layoffs would not be purely economic, they appeared to signal that headcount reductions under the guise of performance reviews were on the table.
It is hard to confirm where they are taking place, however. The company's standard media response is that no layoffs are being made due to economic conditions (because the company is touting the fact that associates are being let go due to poor performance). Keeping the news of their stealth layoffs under wraps by refusing to acknowledge that economics outside of the attorneys' control are driving the decision to fire them, the firms create a sense of shame that keeps the news of the layoffs quiet. Firms profit from feeding that fiction since no one wants to be known as a lousy attorney.