Biglaw firms were thrilled to hire as many associates and business professionals as they could during the booming “post”-pandemic business years, but now that demand has cooled significantly, layoffs meant to “right-size” head count have spread across the industry.
Last week, Dechert — a firm that brought in $1,288,692,000 gross revenue in 2022 (down 3.94% from 2021), putting it at No. 36 in the most recent Am Law 100 — announced a global reduction in force, cutting 5% of the firm’s workforce, including attorneys and business professionals. In total, these layoffs impacted 55 lawyers and 43 business professionals.
But what was behind the firm’s sudden overcapacity? A source tells the American Lawyer that it was very likely a case of overhiring.
Dechert appears to have been caught up in a boom-and-bust hiring cycle, with the private equity and finance ranks in particular swelling to meet rising demand and then leaving the firm with overcapacity concerns.
One source with knowledge of the firm attributed the cuts to overhiring. After a surge in demand that led many law firms like Dechert to hire associates beyond the normal scope of its hiring pool, “demand is returning to normal or maybe worse than normal, depending on how deep the recession goes,” the source said.
According to Am Law, Dechert’s 5% global cut will return its workforce to just around its 2021 staffing levels. At the end of 2021, the firm had 1,815 employees, and these layoffs will bring the firm’s personnel count to 1,798. How incredibly convenient!
Did your firm overhire in 2021 and 2022? Are you expecting layoffs to occur in the near future that will “right-size” the firm? Please don’t hesitate to reach out to us by email at tips@abovethelaw.com or by sending a text message to (646) 820-8477.
Dechert Becomes the Latest Firm Caught in Boom-and-Bust Hiring Cycle [American Lawyer]
Earlier: Am Law Top 50 Firm Begins Reduction In Force, Will Cut 5% Of Global Workforce
Staci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.
