As clients call shots, law firms cutting jobs

On any given day, lawyer Morgen Cheshire might find herself toiling away on a tax problem for a nonprofit client, helping to guide young law students through a training program, or wracking her brain to come up with new business for her firm.

But with clients pinching every penny, she says she has been especially focused on finding ways to keep her charges down.

"The message has been conveyed to me that clients are more mindful of costs, and we need to be especially mindful of that," said Cheshire, an associate at the Center City law firm of Schnader, Harrison, Segal & Lewis L.L.P.

In the once booming world of big law, where firms for years had raised rates in lockstep, clients are calling the shots again.

And that is roiling the profession in ways that would have been unthinkable a few years ago.

Under pressure to reduce their charges, law firms nationally are laying off lawyers by the hundreds, delaying start dates for the young lawyers they do hire, and expecting much more of lawyers with more seniority, such as Cheshire.

Some firms are rolling back salaries, while others are being even more aggressive. Center City's Blank Rome L.L.P., in addition to implementing layoffs and delaying start dates, is curtailing summer internships and offering clients flat rates for some work instead of charging by the hour, the traditional model for law firms.

In the last six months, more than 200 lawyers have been laid off by the largest Philadelphia-based firms out of a total employment of more than 10,000 lawyers at offices around the country.

Morgan, Lewis & Bockius L.L.P., the nation's 14th-largest law firm, laid off 55 lawyers and 161 other staff members in offices around the country March 9.

Blank Rome had two rounds of layoffs, 20 lawyers in January and an additional 27 lawyers and 52 administrative staff March 12. Dechert L.L.P., another large Philadelphia firm, said in February that it had let go of 19 lawyers. There were layoffs as well at Drinker, Biddle & Reath L.L.P., a 700-lawyer firm, among others.

Since the layoffs have fallen disproportionately on young lawyers, some industry experts are suggesting that law schools and law firms rethink how they train entry-level lawyers. Under one proposal, lawyers fresh out of law school would serve a residency in which they would be paid more modest salaries as they learned the profession, much as doctors do.