Why are layoffs legal

International wave of layoffs: Drastic cutbacks at White & Case

White Case plans to lay off 200 associates and 200 other support staff worldwide. This affects around 10 percent of the firm's 2,400 lawyers as well as almost 10 percent of the other employees. There will soon be significant cuts in the partnership as well. According to the firm, these would be adapted to current and expected business requirements. It is not yet clear how many there are, but White & Case assumes that this is proportional to the reduction at Associates, a firm spokesman told the British magazine 'The Lawyer'. Based on these figures, the magazine assumes around 25 to 30 partners who have to take their hats. 400 partners are currently working for White & Case worldwide.

"Germany is not part of the specifically named numbers for job cuts," said Markus Hauptmann, spokesman for the German Executive Committee. However, in view of the global financial and economic crisis, the law firm is currently also reviewing appropriate measures in this country.

"What is certain is that the German offices will not be spared from savings that can also affect staff," said Hauptmann. This would not only affect associates and administrative bodies but also the partnership, which in this country consists of 50 partners.

The results of all global partners are currently being evaluated as part of the annual evaluation; the results and decisions for the German partnership are expected at the end of April.

"However, Germany does not have to meet a certain quota with which the local offices have to contribute to the global reduction," said Hauptmann. "Rather, the plan is to make assessments based on individual cases in this country." It is up to the German leadership to assess the situation concretely and propose appropriate measures.

In addition to possible layoffs, downgrades in the partnership are an option as well as possible freezes in salaries. The review process is currently ongoing.

In view of the results, it seems questionable to what extent the rate will be as drastic as the law firm-wide. All German offices worked profitably last year, sales increased by more than 4 percent compared to the previous year to around 123.5 million euros. The profit was ten million euros after deducting the partner withdrawals.

Not quite as drastic as at White & Case, but still extensive, the downsizing at two other US competitors: Morgan Lewis, represented by 1,500 lawyers worldwide, is laying off 55 lawyers and 161 employees in the USA. K + L Gates, who work for 1,950 lawyers, is separating from 36 associates and 76 other employees in the United States and from 6 lawyers in London. Germany, on the other hand, is not part of the measures. To what extent the German office of Morgan Lewis is affected by layoffs was not known at the time of going to press.

Shortly before, numerous other US law firms had announced plans to lay off. King & Spalding fired 37 associates and 85 support staff. The Atlanta-based law firm employs a total of 880 attorneys. Akin Gump Strauss Hauer & Feld from Dallas also announced the loss of 47 associate positions and 57 positions in the support area.

The measures are part of a wave of layoffs at US law firms; more than 1,100 employees have lost their jobs since the beginning of March. In February, 4,200 employees had already lost their jobs, in January 1,300, announced the responsible Bureau of Labor Statistics. Overall, the Legal Services division in the USA has shrunk by 21,000 jobs in the past twelve months. If seasonal fluctuations are factored out, that makes a minus of 1.8 percent in the entire country.

Some major European law firms had also announced some substantial cost-cutting measures. Just two weeks ago, Allen & Overy announced the cancellation of 47 partner positions and the reduction of 100 associate and support positions (more ...). Previously, two other British competitors, (Linklaters) and (Clifford Chance), had already initiated personnel and financial shrinking courses, Freshfields Bruckhaus Deringer had frozen the salaries of employed lawyers (more ...). (René Bender)