Frozen capital markets and stalled mergers aren’t just hurting Wall Street employees and shareholders: Law firms are also feeling the pinch, which means layoffs, lower salaries and fewer jobs.
The East and West Coasts are taking the biggest hits, with one powerhouse firm recently lopping off 190 lawyers, or 12 percent of its associates, after 2008 profit per equity partner dropped 21 percent, according to The Wall Street Journal’s law blog.
Houston's third-largest law firm, Baker Botts, in March announced layoffs. Dallas firms have also had layoffs and eliminated the summer associate programs through which they recruit prospective attorneys. And this spring’s law grads will in some cases compete with seasoned lawyers who are hungry for work and willing to take pay cuts.
Even the expansion-minded international giant K&L Gates announced in March that it was trimming 36 U.S. lawyers, although its income rose a reported 27 percent according to legal tabloid Above the Law.
"It’s a huge issue right now," said Arturo Errisuriz, assistant dean for career services at Texas Wesleyan University School of Law, which will have about 175 May graduates. "My larger concern is with recent graduates. What we’re wanting to do is make our students realize it’s going to be a challenge."
That will be a big turnaround from the market as recently as a year ago.