No need for lawsuits during a recession

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Recession causing lawyer layoffs at big firms

WASHINGTON (AP) - In America, there are always people to sue or contracts to negotiate, right? Apparently there aren't enough.

The recession is taking a steep toll on the legal profession, an industry long seen as immune from the ups and downs of the economy. Trying to weather the financial crisis, the nation's largest law firms are laying off attorneys and delaying the hiring of others.

More than 3,000 lawyers have been laid off in the first three months of 2009.

"A lot of people go into the law because it's one of those professions where you're always going to have work. There aren't typically big layoffs," said Samuel Smith of Charlotte, N.C. "Realistically, I don't think people saw this coming."

Last summer Smith was working at Cadwalader, Wickersham & Taft while flirting with job opportunities at a few other firms. But in August, Smith was laid off as the economy soured. The firms that earlier had been interested were now reluctant to hire.

"I'm still looking for jobs," said Smith, who launched http://www.rateapartner.com, a Web site that links to legal business news articles and allows lawyers and clients to anonymously rate law firm partners.

Just how bad is it out there?

The Labor Department said the number of unemployed lawyers jumped 66 percent last year to a 10-year high of 20,000.

The first time this year that three consecutive business days passed without one of the nation's top law firms announcing job cuts came in mid-March, according to the Web site Lawshucks.com. They have counted 3,149 lawyer layoffs—just in the big firms, just in the first three months of the year.

The New York City Bar Association, for the first time in its more than 135 years, is offering career counseling services to lawyers between jobs.

Law firms are delaying the hiring of final-year law students, who normally are brought on a year in advance of graduation. Law students graduating with jobs this spring are being paid to delay their start date. Some are being told there will be no work until later in the year, maybe in 2010.

So many would-be lawyers are facing this situation that Volunteer Lawyers for Justice, a group that trains volunteers to provide free legal assistance to low income clients, held a "Deferred Associates Job Fair" in Newark, N.J., for graduates looking for temporary work while waiting for permanent jobs to come through.

For some Americans, there's not much sympathy for lawyers who are suddenly jobless.

They make more money than the Average Joe, with the nation's million-or-so employed lawyers averaging $118,280 in 2007, or $56.87 an hour, according to the Labor Department's Bureau of Labor Statistics.

And the number of out-of-work lawyers is minuscule compared with the manufacturing sector, which had 945,000 unemployed workers last year, or the construction industry, which saw more than 1 million jobs disappear in 2008.

But those careers don't require four years of college plus a degree from a law school that costs about $70,000 to attend.

"My computer is about to die with the amount of resumes I've sent out," said Tim Brown, 32, of Alexandria, Va.

Brown was laid off from his job working on franchise law for the National Auto Dealers Association on March 26 and has sent out hundreds of resumes. The response?

"'We've received your resume. Thank you very much,'" said Brown, who made April's loan payment but is concerned about May.

Karla Cortes, 33, lost her job as a Nature Conservancy attorney in November, only two years after graduating from American University's law school.

Money is now getting tight, said Cortes, who attended a George Washington University workshop on getting a legal job in the tough economy. "I hope to find a job soon," she said. "Otherwise, I will have to return to Puerto Rico because my savings will be depleted."

Tommy Wells, president of the American Bar Association, said the increase in lawyer layoffs is partly the legal industry's fault.

In the past, large law firms diversified by having lawyers work in areas such as bankruptcy and litigation that could support the corporate and mergers-and-acquisition work when the economy soured and vice versa, he noted.

"Firms probably got a bit out of balance in terms of their practice areas and put a lot of resources into areas that unfortunately are not nearly as active as they were a few years ago," he said.

The economy is being blamed for entire law firms going under.

In Philadelphia, WolfBlock, which has been in business since 1903 and has more than 300 lawyers in several states, is "unwinding" in preparation for closing. Partners blame the banking crisis, the recession—especially in the firm's core real estate practice—and lawyers and clients bailing as the writing on the wall became clearer.

In New York City, Thacher Proffitt & Wood, in business since 1848, survived the terrorist attacks of Sept. 11, 2001; it had offices in the World Trade Center and lost none of its more than 300 lawyers and support staff. But it couldn't survive the bad economy and closed in September.

Fanni Koszeg, 34, of New York City, lost her job at Thacher in April 2008. Koszeg thought she would take the summer off and maybe go back to work as a public interest lawyer.

"That was very naive of me," Koszeg said. "Now, all of the other law firms have been laying off hundreds of lawyers."

It has been more than a decade since the market was this bad for lawyers, said David P. Landau of Klein, Landau and Romm, one of the nation's oldest continually operating legal search firms in the United States.

"We'll come out of this, we always do," said Landau, who has been recruiting lawyers for more than two decades. This recession, he said, "is a little deeper. It may take longer."

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