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Weil Gotshal & Manges is laying off more than 150 lawyers and staff from in one of the biggest cost-cutting exercises in years to hit an American law firm.
Around 60 associates and 110 support staff, predominantly legal secretaries, are understood to have been informed earlier today (24 June) that they will be made redundant. The firm said that the ”staffing adjustments” had been made across the firm’s international network but were predominantly in the US.
“While we have been able to avoid these actions in the past, and it is very painful from a human perspective, the management committee believes that these actions are essential now to enable our firm to continue to excel and retain its historic profitability in the new normal,” said Weil’s executive chairman Barry Wolf in an internal e-mail.
At the same time as the job cuts Weil is also cutting up to 30 of its partners’ annual remuneration.
In his email Wolf specifically addressed concerns that may have been raised by the demise of Dewey & LeBoeuf last year by highlighting the continuing strength of Weil’s financial position.
Wolf said the firm had continued to make “meaningful investments” over the last few years as part of a strategic plan to increase its revenue base for the future.
“We have been able to do this because of the firm’s balance of practice and geography as well as our strong financial position,” said Wolf. “We have zero debt outstanding. This has been the case throughout our history and we have no plans to change that. Further, our partner pension plan remains fully funded with over $500m of assets in it, and we do not have any compensation guarantees with partners other than for the first year a lateral partner joins the firm.”
Last May Dewey filed for bankruptcy partly as a result of partner remuneration guarantees (29 May 2012).
Wolf said the restructuring and litigation work relating to the 2008 financial crisis had been winding down, while the overall market for transaction activity remained at the lower levels which, he believed, was “the new normal”.
As a result, Wolf added, the firm needed to make these adjustments.
“We are taking these actions from a position of strength,” said Wolf.