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Ankus Consulting's Joseph Ankus
In another sign of the hard times facing the legal industry, particularly in real estate-heavy south Florida, two law firms -- Holland & Knight and Shutts & Bowen -- have laid off nonlawyer staffers.
On a day that could be dubbed "Black Friday" in south Florida legal circles, Holland & Knight, one of Florida's largest and most venerable firms with 1,150 lawyers, laid off 70 staffers on May 16, including legal secretaries, information technology and accounting staff. No lawyers were laid off.
The layoffs of about four employees in each of Holland's 17 offices represented 5 percent of Holland's nonlawyer work force.
Shutts & Bowen, a 200-lawyer Miami-based firm, the same day laid off nine people, all entry-level file clerks or paralegal clerks. No lawyers or legal secretaries were affected.
The news comes on the heels of a decision announced internally on May 16 by Fort Lauderdale, Fla.-based Becker & Poliakoff to temporarily and immediately cut all lawyer salaries by 12 percent. The firm, which is heavy in condo and real estate representation, said it was forced to take the action since clients are delaying payment in the lean economic environment.
Some south Florida legal observers noted that, although some firms with less diversified practices are hurting, not all south Florida law firms are in trouble. In fact, some are adding lawyers and offices.
"I'm very busy placing a lot of lawyers," said Joe Ankus, a south Florida legal headhunter with Ankus Consulting. "I think part of these layoffs is economic, and part is using economics as a smokescreen to release individuals who might be borderline employees. Part of this is a convenient excuse for housekeeping."
Law firms in the greater Miami area found out about Holland & Knight's layoffs when they received e-mails from the firm's office administrator offering up resumes of the laid-off employees. "It was a pretty unusual e-mail to get," said one local managing partner who did not want to be identified. "I've never gotten an e-mail like that from another law firm."
Holland & Knight spokeswoman Susan Bass said the layoffs were needed "to maintain our efficiency in a competitive marketplace.
"It was a difficult decision, and everyone got severance packages and outplacement assistance," she said. "It was a review of the operation and addressing of inefficiencies and redundancies."
With 31 domestic and international offices, Holland & Knight is among the 20 largest law firms in the world. It is also known for its strong pro bono department and commitment to diversity.
The firm has had layoffs and financial trouble in the past. In 2002, the firm laid off 60 lawyers and more than 100 staff members, or 5 percent of its attorneys and 10 percent of its staff. The layoffs came in the wake of publication of an internal memo sent from a partner to the firm's then-managing partner criticizing the rapid expansion, saying it was done at the expense of profitability.
There was no sign of a financial downturn brewing at a lavish cocktail party held by Holland & Knight for its clients and reporters two weeks ago at Mar-a-Lago, Donald Trump's Palm Beach, Fla., manse.
NOT EVERYONE IS HURTING
Joe Bolton, managing partner of Shutts & Bowen, denied his layoffs were related to financial problems.
"This was just our annual review of efficiencies of operation," he said. "We're doing fine. We're busy doing workouts, foreclosures and bankruptcies. We just opened a Tampa office, and we're leasing a new office in West Palm Beach."
Several other law firms interviewed said they were doing fine as well, including Philadelphia-based Duane Morris, which has 25 lawyers in Miami and Boca Raton, and Gunster, Yoakley & Stewart, which just opened an office in Tallahassee.
Matt Gorson, hiring partner at Greenberg Traurig, Florida's largest firm, said recently that he moved some Miami associates out of real estate and into litigation as real estate has slowed.
Greenberg, which froze equity partners' salaries at the beginning of the year, has had no "across-the-board" layoffs, according to spokeswoman Jill Perry.
Carl Schuster, managing partner of Fort Lauderdale-based Ruden McClosky, acknowledged his 175-lawyer firm is experiencing "a slowdown."
"Because we do a lot of real estate work, we do have a slowdown," he said. "Fortunately, we do so much work in other areas, including workouts, bankruptcy and litigation. Like Becker & Poliakoff, we are having trouble getting some of our developer clients to pay. But they've been good to us, so we try to be good to them."
Ruden plans no layoffs, but is not replacing some people who quit, Schuster said. The big worry for his firm is whether year-end bonuses will be distributed to lawyers, he said, adding that it's too early to tell at this point.
