As COVID-19 continues to wreck havoc among nearly all industry sectors globally, the economic downturn to the global client base has caused a rippling disruption to cashflow for the legal industry. It now appears that the largest law firms are not COVID-19 proof, as many have initiated traditional layoffs and "stealth layoffs".
The reputable BigLaw firm, Sullivan & Cromwell, is alleged to have laid off employees in multiple departments and offered buyout packages to many older employees. Additionally, Fox Rothschild, fired six associates. The law firm said the dismissals “stem from productivity and performance issues.”
While the few traditional layoffs in the legal industry have made headlines, it is the stealth layoffs, referred to as a “specialty” of Big Law firms, that raises more alarms about the industries health. Stealth layoffs involve the termination and reduction of lawyer headcount without confirming that they are making economic-based layoffs, and they sometimes justify the move with performance reviews.
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