Urban myths always spread the same way. And with 4,030 lawyers practicing in Richmond, Henrico and Chesterfield, the local legal scene is about the size of a big high school, which makes the rumor mill that much fiercer.
And like a classic urban myth, few lawyers in Richmond know personally an associate or partner who’s lost a job, but seemingly everyone knows someone who knows someone who’s gotten laid off.
It turns out that several local firms have indeed laid off lawyers, but none have let go more than 4 or 5 percent of their staff, and those cuts pale in comparison with the disappearance of entire industries in Richmond, such as the closure of Qimonda or the stagnating construction industry, where business is off more than 50 percent.
And plenty of small firms say business is just fine. DurretteBradshaw and Spotts Fain, for example, said they are not letting go of any of their lawyers. Several other local firms with litigation practices are hiring lawyers let go in bigger markets like New York. Bankruptcy law, meanwhile, is booming.
To be sure, some practices are slower than they’ve ever been, in particular those that specialize in mergers and acquisitions or real estate.
“The national firms that are doing layoffs had fairly heavy presences in those complicated financial transactions. Those have gone cold,” said Gary LeClair, a founding partner at the firm LeClairRyan, which has about 300 lawyers nationwide, with its main office in Richmond.
Nationwide more than 10,000 lawyers have been laid off, according to Lawshucks.com, a website that tracks industry trends. Many of those are from the larger firms in cities bigger than Richmond, and at firms that specialized in high finance (that dicey business of slicing mortgages) or commercial real estate transactions.
Most of the local cuts are occurring at the largest firms. According to Law.com, Atlanta-based Troutman Sanders has 28 fewer attorneys listed than six weeks ago, which would account for about a 4 percent contraction. The firm’s website lists 118 Richmond lawyers, which would mean if the cuts were equal at all branches, they might have lost about 5 lawyers. Troutman also pushed the starting date for incoming first-year associates to January 2010 and lopped two weeks off its 2009 summer associate program in each market.
Local law firms say they are cutting expenses where possible. One firm with around 100 lawyers canceled a fancy retreat last winter to a resort in the western part of the state. At Leclair Ryan, lawyers who are away on travel are encouraged to be frugal.
“Let’s make sure we’re staying at a hotel that’s reasonably priced, not one right next to the office that costs $200 more a night,” said LeClair. “We’ve got to be real careful about our expenses. Everyone is doing that.”
But even small shops around town report that even normal residential law is slow on account of the moribund housing market. And just this week, Virginia Lawyers Weekly reported that divorce lawyers are seeing a slow-down in parts of the state suffering from a post-housing-boom hangover.
In an industry that rarely sees such drastic contraction, it’s surprising some lawyers, who say that occasionally a colleague is at work one day and gone the next.
The cuts we’ve confirmed are as follows:
Hirschler Fleischer: let go six or seven.
Williams Mullen: has laid off around 5 associates but no partners. The firm is still honoring all its offers to law school graduates. The firm expects a slow-down as work with major companies including LandAmerica disappearing and deal volume slower than years past.
McGuire Woods: The firm handled legal work for Circuit City, so it stands to reason it lost a major client that could keep five associates busy full-time. In March the firm announced it was cutting associate pay for new graduates to $130,500 in Richmond and shortening summer internships.
Troutman Sanders: The firm declined to comment for this story, but a managing partner in the Hampton Roads office told a business magazine that there were layoffs firm-wide. “The word I’m getting from Atlanta is that we’ve completed our layoffs but we’re not disclosing the number of people,” Tom Betz told Inside Business.
Several local firms are expanding.
Bill Van Buren, the president at Norfolk-based Kaufman and Canoles, added a lawyer in Richmond last week. The firm has 16 attorneys here, 11 of whom are partners.
“During the past decade, a lot of explosive growth among firms. Not only numbers but compensation. In order to justify that compensation, firms pushed their rates aggressively. We helped back our rates,” Van Buren said, adding that now his firm has better rates than the larger firms and that is making them more competitive.
Meanwhile Leclair Ryan is planning on growing its revenue 10 percent this year and adding lawyers, including in the home office. (There are rumors circulating that the firm asked partners to put in more capital, but Gary LeClair said that is false.)
“A lot of firms in Richmond, like my firm, are well balanced,” LeClair said.
Aaron Kremer is the BizSense Editor. His favorite urban myths are 1) there was such a thing as a hover board and 2) the guy who played Paul on the Wonder Years was Marilyn Manson.