Lawyer Termination
 July 7, 2004

Our periodic surveys are usually sparked by a question from a law firm about a specific issue. This month, that issue is lawyer “involuntary” termination, i.e., the firing or layoff of partners and associates. Our unscientific survey tells us that, despite a lot of conversation about quality culls among associates, in a typical year, two thirds of firms have involuntary terminations of less than five percent of their total number of associates.

In terms of notice, 78 percent allow associates to continue working until they find a new job or for a specific period of time, whichever is less. This marks a significant tightening of notice policies from the last time we did this survey five years ago. Then, half of the responding firms allowed associates to continue working until they found a new job, with virtually no limit to how long it took. Only 11 percent of firms require associates to leave immediately upon termination.

The average notice period is between 60 and 90 days, with firms often providing 60 days and later extending it an additional 30 days if the associate has not found a job. After the notice period, many firms offer some form of severance benefit including salary continuation, insurance benefits (or firm paid COBRA premiums), and continued access to voice mail and e-mail. About 25 percent of firms offer continued use of an office or continued secretarial support. Three quarters of firms offer or have offered some form of outplacement services.

Typically, firms offer outplacement on a case by case basis but it seems to be offered about equally to departing partners and associates. The firms’ satisfaction with outplacement services is evenly divided between fair and good. None of our respondents considered it excellent or poor. The primary reason for not offering outplacement is cost and most firms pay a fixed fee for the service rather than the percentage of salary which is typical in corporate outplacement.

A third of our respondents were from firms with more than 500 lawyers, 22% were from firms with between 100 and 500 lawyers and 44% were from firms with less than 100 lawyers.