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Career Journal: Downsizing

By Michael DeCosta
January 30, 2008

Discussing workforce reductions, RIFs, layoffs, downsizings, whatever you may call them, is never fun. It may certainly not seem the best way to start a career column for the New Year. But it is, nonetheless, all too topical. Not since 2002 has the profitability watch been so high in the legal industry. And with it, eyes have already been cast by many firms toward their greatest expense: their people.

Whether or not to adjust the number of employees or partners downward can be a critical decision for 2008. In the event it does happen, marketing executives will, undoubtedly, be asked to help craft appropriate messages to both the market and within their own firms in advance of rumor mills, blogs, and especially, the competitors offering their own take on the changes. However daunting the task, working through such scenarios can go a long way toward preserving your firm's reputation and bolstering your own career opportunities within your current firm or with a prospective employer.

A Year of Adjustment

After several years of record growth, all indications suggest that 2008 will be a year of adjustment for U.S. law firms. For firms mired in the woes of the sub-prime mortgage debacle, the adjustments are already upon them. For them, 2007 is a year to forget and prospects for a happier new year ' even for more general services firms ' sour with each passing day. Regardless of how diversified a firm may be, pressures to cut costs are mounting. Clients continue to push hard for reduced or fixed fees. Should firms look to curtail costs in a dramatic fashion, they may look to their single biggest expense: human capital. Yet downsizing, long an accepted practice in the modern business era, has remained a much avoided, nearly taboo action in law firms. Law firms, like any other business, must constantly make prudent decisions, including downsizing, or for those who prefer more palatable vernacular ” rightsizing.' Marketing executives play a key role in messaging this business decision.

Where to Start

What can marketing executives do to mitigate disruptions caused by these workforce reductions? In the near term, marketing leaders should work to craft an effective message. The easy explanation that many firms are quick to offer is that downsizing will serve to increase profits per partner. That's fine, but there may be better ways to rationalize the decision to downsize without sounding so draconian. You may want to consider the following:

  • Work with outside management consultants who specialize in change management consultation. This can allow downsizing to be viewed as part of an ongoing change management strategy. Encourage managing partners to do their part in delivering the message. Tell them to take this responsibility head on and coach them how to do so. They may be reluctant, but will eventually appreciate your sage advice.
  • Go beyond a perfunctory memo. Hold a 'Town Hall Call' for partners and employees of the firm ' together. Enlist leaders to discuss with their respective groups. Open dialogue.
  • See if the firm can avoid downsizing all together. Bolster your firm's existing talent management and alumnae programs by helping talented, yet financially underperforming, attorneys to transition into 'in-house' counsel roles at clients.. This can negate or mitigate the need to downsize.
  • Take it to the street. Tell the story externally before it is 'discovered' by the media. Getting ahead of the spin-doctors is critical.

One Example

Consider, for example, an effective message crafted by a prominent AmLaw100 firm that was facing the need to downsize a few years back. The firm essentially launched a powerful 'Leaner, Not Meaner' campaign around attorney attrition that was well received by Partners, Associates, clients, and law school students. The message ultimately thwarted industry pundits and their competition from offering negative commentary. It was critical for the firm provide the reasons behind its decision in a positive, proactive manner before the news hit through other channels. The more transparent the business decision, at least in this case, the more accepted it became.

What Can This Mean for Your Career?

Handling a downsizing correctly can in the end become a bullet-point for your resume. Minimally, it demonstrates how tied you are to the business realities of the firm, not just serving as a hired gun to spew the firm's mantra. Marketing executives who prove the value of marketing in good times and bad can further their own cause toward preserving budget, people, and perhaps their own jobs in a down market. Our clients repeatedly ask us to help them recruit marketing executives who demonstrate an understanding of the realities of law firm economics. Experience with workforce reductions certainly exhibits this and improves your marketability as a candidate.

Conclusion

Of course, we all hope for a hasty reversal of fortune in the economy. Perhaps the alarm has sounded too soon and 2008 will bring continued growth. However, being prepared for dealing effectively with workforce reduction is a timeless plan and being ready to go and can only have lasting career benefits down the road.


Michael DeCosta, who joins our Board of Editors with this issue, is a Client Partner with Korn/Ferry Inter- national, resident in their Stamford, CT, office. Michael is a member of the firm's professional services practice. He focuses on search assignments for management and IT consulting, accounting and law firms. He can be reached at 203-359-3350 or via e-mail at [email protected].

Discussing workforce reductions, RIFs, layoffs, downsizings, whatever you may call them, is never fun. It may certainly not seem the best way to start a career column for the New Year. But it is, nonetheless, all too topical. Not since 2002 has the profitability watch been so high in the legal industry. And with it, eyes have already been cast by many firms toward their greatest expense: their people.

Whether or not to adjust the number of employees or partners downward can be a critical decision for 2008. In the event it does happen, marketing executives will, undoubtedly, be asked to help craft appropriate messages to both the market and within their own firms in advance of rumor mills, blogs, and especially, the competitors offering their own take on the changes. However daunting the task, working through such scenarios can go a long way toward preserving your firm's reputation and bolstering your own career opportunities within your current firm or with a prospective employer.

A Year of Adjustment

After several years of record growth, all indications suggest that 2008 will be a year of adjustment for U.S. law firms. For firms mired in the woes of the sub-prime mortgage debacle, the adjustments are already upon them. For them, 2007 is a year to forget and prospects for a happier new year ' even for more general services firms ' sour with each passing day. Regardless of how diversified a firm may be, pressures to cut costs are mounting. Clients continue to push hard for reduced or fixed fees. Should firms look to curtail costs in a dramatic fashion, they may look to their single biggest expense: human capital. Yet downsizing, long an accepted practice in the modern business era, has remained a much avoided, nearly taboo action in law firms. Law firms, like any other business, must constantly make prudent decisions, including downsizing, or for those who prefer more palatable vernacular ” rightsizing.' Marketing executives play a key role in messaging this business decision.

Where to Start

What can marketing executives do to mitigate disruptions caused by these workforce reductions? In the near term, marketing leaders should work to craft an effective message. The easy explanation that many firms are quick to offer is that downsizing will serve to increase profits per partner. That's fine, but there may be better ways to rationalize the decision to downsize without sounding so draconian. You may want to consider the following:

  • Work with outside management consultants who specialize in change management consultation. This can allow downsizing to be viewed as part of an ongoing change management strategy. Encourage managing partners to do their part in delivering the message. Tell them to take this responsibility head on and coach them how to do so. They may be reluctant, but will eventually appreciate your sage advice.
  • Go beyond a perfunctory memo. Hold a 'Town Hall Call' for partners and employees of the firm ' together. Enlist leaders to discuss with their respective groups. Open dialogue.
  • See if the firm can avoid downsizing all together. Bolster your firm's existing talent management and alumnae programs by helping talented, yet financially underperforming, attorneys to transition into 'in-house' counsel roles at clients.. This can negate or mitigate the need to downsize.
  • Take it to the street. Tell the story externally before it is 'discovered' by the media. Getting ahead of the spin-doctors is critical.

One Example

Consider, for example, an effective message crafted by a prominent AmLaw100 firm that was facing the need to downsize a few years back. The firm essentially launched a powerful 'Leaner, Not Meaner' campaign around attorney attrition that was well received by Partners, Associates, clients, and law school students. The message ultimately thwarted industry pundits and their competition from offering negative commentary. It was critical for the firm provide the reasons behind its decision in a positive, proactive manner before the news hit through other channels. The more transparent the business decision, at least in this case, the more accepted it became.

What Can This Mean for Your Career?

Handling a downsizing correctly can in the end become a bullet-point for your resume. Minimally, it demonstrates how tied you are to the business realities of the firm, not just serving as a hired gun to spew the firm's mantra. Marketing executives who prove the value of marketing in good times and bad can further their own cause toward preserving budget, people, and perhaps their own jobs in a down market. Our clients repeatedly ask us to help them recruit marketing executives who demonstrate an understanding of the realities of law firm economics. Experience with workforce reductions certainly exhibits this and improves your marketability as a candidate.

Conclusion

Of course, we all hope for a hasty reversal of fortune in the economy. Perhaps the alarm has sounded too soon and 2008 will bring continued growth. However, being prepared for dealing effectively with workforce reduction is a timeless plan and being ready to go and can only have lasting career benefits down the road.


Michael DeCosta, who joins our Board of Editors with this issue, is a Client Partner with Korn/Ferry Inter- national, resident in their Stamford, CT, office. Michael is a member of the firm's professional services practice. He focuses on search assignments for management and IT consulting, accounting and law firms. He can be reached at 203-359-3350 or via e-mail at [email protected].

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