Lawyer headcount at US firms hit by steepest drop for over 30 years

The US's largest law firms this year suffered the deepest cuts in lawyer numbers for more than three decades, reports The National Law Journal.

During the 12 months from October 2008 to September 2009, the total number of lawyers working at the top 250 US law firms plunged by 5,259 to 126,669, compared with 131,928 last year.

The results of The National Law Journal's annual survey of the US's 250 largest law firms, now in its 32nd year, show a 4% decline in the total number of lawyers - only the third time that total lawyer count among the group has dropped since the publication started recording headcount data in 1978.

The last time total lawyer numbers fell was in 1993, when they dropped by 0.9%. The first decline was in 1992, when they fell by 1%. The tally this year wipes away nearly one-third of the growth that law firms have made during the past five years, and puts many of them well below 2005 levels.

Among the top 75 law firms on the list, 15 saw reductions of more than 100 lawyers. Of the top 50, seven cut more than 200.

The firm with the largest percentage decrease was New York's Fried Frank Harris Shriver & Jacobson, where headcount decreased by 26.4% to 468 from 636 in 2008.

The firm losing the greatest number of lawyers was Latham & Watkins, where headcount fell by 444 (19.1%), down from 2,322 to 1,878 - just 38 lawyers more than the firm had in 2005.

Associate ranks were hit hard by workforce reductions, with total associate headcount shrinking by 8.7%.

The decline also reflects would-be first-year associates whose start dates were deferred. Of the 250 firms on the list, 113 reported that they deferred a total of 2,784 associates. That figure represents 42% of the 6,636 law graduates who would have been in the incoming first-year associate class. The average number of associates deferred per firm was 25.

Lawyers in the "other" category proved the most expendable. The category includes non-partner, non-associate lawyers, including counsel, of counsel, senior counsel and staff attorneys. That group nosedived by 8.9% to 11,433 from 12,547 in 2008.

At the same time, partner employment, as a whole, remained unscathed. The number of partners in 2009 was 53,468, compared with 52,980 in 2008, an increase of 0.9%. Among the top 50 firms, 30 increased their partner totals. "The cuts made were done primarily to preserve workloads for partners," said Ward Bower, a consultant with Altman Weil. "It suggests that work done by partners is work that associates could do," he added.

The National Law Journal is a US sister title of Legal Week.