Dear DLA: Is Death by 10,000 Cuts Really Better?

Dear DLA,

We write this because we care.

You need help.

We’re not saying you’re actually dying. No, with your repeated announcements of layoffs and other cuts, you’re just giving the impression you are.

Let’s review, courtesy of abovethelaw yesterday, http://abovethelaw.com/2009/07/draft_nationwide_layoff_watch.php, and as recapped in the lawblog of the Wall Street Journal. http://blogs.wsj.com/law/2009/07/08/law-firm-layoff-wednesday-paying-the-dla-piper-again/

On February 10, you cut 140 UK employees, whom you called ‘redundancies’, and released the following statement:

“Having carefully considered current volumes of business activity and the predicted impact of the ongoing downturn, we are conducting a formal redundancy consultation process in the UK which is likely to result in up to 140 redundancies. Approximately 30 are likely to be fee earners and the remainder will be direct and indirect business support staff in our 8 UK locations. This is a difficult but necessary decision based on our reassessment of resource levels following the continuing deterioration of the market. This prudent action will align our capacity levels with existing client demands.”

On February 12, as You Laid Off 80 US associates and 100 Staff:

“In light of the deepening economic downturn over the last number of months, we have carefully considered and reduced expenses across virtually all of our operations. While we had hoped for a rebound in economic activity, we believe that a major improvement in 2009 is increasingly unlikely.  … Our business model factors in some normal attrition in a healthy economic climate, but we have not seen that in this deteriorating economic environment. Given this, and overall market conditions, we have concluded with deep regret that we must reduce our ranks by approximately 80 associates and 100 staff in the U.S. …

“While we cannot predict the future with any certainty, we believe that this reduction will adjust staffing levels to match our current and anticipated workflow for the balance of the year, and allow the firm to ultimately emerge from the downturn in a strong competitive position.”

On May 15, and the following five days, you announced that you were rolling back associate salaries by 10 percent, noting that partners had also suffered decreased compensation (this was quickly revealed as a cut of up to 20 percent, which you then rolled back to 10 percent. At least you didn’t say you had ‘carefully considered’ this.):

“As the national and global economies continue to contract, and credit markets remain frozen, both governments and the private sector are working through the implications for the future. The broad consensus is that the business environment in the next few years will be fundamentally different, and our clients have taken dramatic action to reshape their businesses to fit this new reality. The legal profession has also been significantly affected, and is in the process of making the adjustments necessary to realign our business models for continued strength and success. …

“These measures will provide us with flexibility and additional competitive strength to win important engagements and continue to grow our business. No one can predict the next developments in the economy, but we believe that these actions will help protect the firm and our people.”

And then came July 8, when you announced the firm was shedding another 121 jobs in the U.S., 21 lawyers and 100 staff.

“During the last year, we have experienced the worst economic period in generations. We have carefully gauged its impact on our business and responded by closely scrutinizing and reducing all of our material expenses across the board. We also reduced our workforce in February, attempting to preserve as many jobs as possible while avoiding any further reductions later in the year. Unfortunately economic weakness has continued, demand across the legal sector remains soft, and it is increasingly clear that major improvements in the US and global economy will not occur before 2010. We have therefore regretfully concluded that we must reduce our ranks now by 21 associates and 100 staff. While the firm’s financial position remains strong, a tightly-managed cost structure is essential to compete effectively during these uncertain times. We value all of our people and are very grateful for their contributions to the firm, and we have worked hard to consider and employ every reasonable measure to avoid lawyer and staff reductions .”

While the firm’s financial position remains strong?

It’s called denial. Get help. Throwing another 21 associates out the door at this point is ludicrous given that you have apparently misjudged the economic tsunami for six months now, despite your careful consideration.

Look, we never thought your approach to conquering the world with a global brand named DLA was particularly great. OK? But you have some really sweet practices and some smart leaders. Some being the operative word in both cases. Some others? Not so much. Anyway, we were willing to suspend disbelief, especially when other fine firms followed you down the globally branded law firm path of strategic incoherency. And most of your peers in that group are suffering too, many with serial cuts.

Somehow, however, you are setting a new low-water mark for appearing to be incompetent.

Sit. Think. Deliberate. Do not issue more statements before you look inside.

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