Shearman & Sterling has cut 26 business services professional roles as well as 12 associates in the United States, blaming economic headwinds and market conditions. The cuts come in the same week that Davis Wright Tremaine is reported to have cut 21 professional staff. As yet we are unclear as to the precise make up of those roles.
Shearman’s redundancies are said to be mainly focused on transactional practice areas most affected by the current market conditions. In a widely reported statement, a spokesperson for the white shoe law firm said: “In light of the continuing and growing economic headwinds and market conditions, we made the difficult decision to adjust the size of our team in the U.S.” It added: “While it is always painful to part ways with colleagues, and we have been able to avoid these actions up to this point, it was a critical step to align our capacity levels with existing client demands.”
The announcement from Shearman follows the news on Tuesday that Davis Wright Tremaine has made 21 professional staff redundant. The cuts were announced in an email by Scott MacCormack, Davis Wright Tremaine’s managing partner, as seen and reported on by the likes of Bloomberg Law. MacCormack told Bloomberg: “We unfortunately had to lay off some staff in areas where we either had excess capacity or redundancy and misalignment.” He added: “These adjustments enable us to recruit for and make investments in the areas of strategic importance or high demand.”
Shearman and Goodwin are by no means the first to make professional services redundancies: in December, Am Law top 50 firm Cooley laid off 150 US employees, including 78 lawyers, and 72 paralegals and business professionals. The layoffs were announced in an internal memo from chairman and CEO Joe Conroy, published in full by Above the Law, in which he conceded that the firm’s post-pandemic aggressive talent recruitment strategy was misaligned with the economic downturn.
While UK law firms have so far seemingly avoided making staff cuts, recruiters warn that they are on the horizon due to a lull in M&A activity.
The International Monetary Fund said at the end of January that the UK economy will contract by 0.6% in 2023, rather than grow slightly as previously predicted. It blamed high energy prices, rising mortgage costs and increased taxes. The UK is the only country – either advanced or emerging – forecast to shrink this year.
If you didn’t catch Legal IT Insider’s UK economy analysis in December you can read it here: