Among the top issues for most legal administrators in the new year is going to be a volatile hiring market that, for many firms, may include reductions in staffing. We don’t mean to be Casandras about the economic downturn but it only makes sense for us to address the issues surrounding its impact on law firm employment.

Most advice about layoffs are common sense but we found a guide that has some good suggestions. Among the thoughts are to Show Consistency by cutting bodies and then giving extraordinary severance benefits that eat up the value of the layoffs; and Don’t Let People Self-select by getting rid of your weakest links rather than letting some of your best people take a bullet for the team. Go to our website (www.LRGLLC.com) under Requested Publications on the home page, then click on white papers for a copy of “How to layoff employees”.

Law firms’ management at the partner level often assumes that, after a layoff, the surviving associates and staff will work harder and be grateful to have a job. However, a recent survey by Leadership IQ found that three quarters of survivors say that their own productivity has declined since the layoff. In fact, 87 percent say they are less likely to recommend their firm as a good place to work, 81 percent say client service has declined and 77 percent see more errors and mistakes being made. 

Psychologists explain that it is related to a minor form of post-traumatic stress syndrome. “It is easy for management to say that people are assets, rather than just costs,” according to the President of Leadership IQ. “But in difficult economic times when cutbacks are unavoidable, best-in-class firms demonstrate they mean it.” They demonstrate this by:

§ Communicating. Secrecy or lack of transparency adds to an employee’s sense of powerlessness. Don’t delay news of job cuts; tell employees why they are necessary.

§ Proactively addressing the downside of less staff for the same amount of work. Involve employees in rethinking how tasks are gong to be accomplished.

§ Demonstrating continued long-term interest in employees’ careers. Introduce stretch assignments and increase frequency of career-related discussions and possible advancement opportunities. 

§ Using periodic, systematic employee attitude assessments. Assessments help management keep abreast of the impact of the layoffs on day-to-day practice issues.

Common sense tells us that a buyers market should do nothing but benefit law firm recruiting efforts. As staff reductions occur, both within and outside the legal industry, there will be more highly qualified candidates for law firms’ senior staff management positions.   This is because positions at higher levels in law firms, or any industry, have fewer vacancies and there are, therefore, fewer opportunities for senior managers. As companies consolidate, and go out of business, there are fewer jobs driving managers into industries that appear more stable, such as law firms. 

It is likely that firms will receive resumes from candidates whose career experience has been in more responsible positions or with larger law firms. Traditionally, law firms have been concerned about candidates who are taking a step back in their career. The fear is that candidates coming from larger firms will be accustomed to greater resources and larger budgets than a smaller firm can offer. At the same time, many firms view management employees considering a step back in position level to be simply looking for a job until something better comes along.   

On the other hand, overqualified candidates may be capable of dramatically upgrading a firm’s operations and jump-starting much needed change. The price of a possibly short tenure may, in fact, allow the individual to operate more objectively and function as an internal consultant, accomplishing results that a manager seeking a long-term career path within the firm might be reluctant to attempt. The key is to speak openly and honestly with the manager about the firm’s needs and objectives. Also, make sure that you have a top notch in-house successor who can learn from the overqualified candidate.