Oct 06
disappearing magician

The Truth about Stealth Layoffs 

A few months ago the phrase that was getting a lot of attention was “Quiet Quitting.”  Now it’s “Stealth Layoffs.”  Abovethelaw.com, in a September 9 article with the somewhat breathless sub-heading “Yikes! Sorry but the party’s over” reports that some large law firms are planning to reduce their attorney headcount without officially calling it a layoff. Instead, they will use a combination of attrition and poor performance reviews to reduce the size of the flock. The article refers to this practice as “disturbingly popular” and implies that large law firms are somehow unique in employing these tactics. 

As career coaches to law firms and recruitment and retention consultants to law firms, we know firsthand that law firms have long avoided publicly announcing layoffs. This is hardly new nor limited to law firms or employers. How often have we seen politicians who fear losing the next election announce that they have decided to spend more time with their families? 

The Above The Law article implies that the disturbing part of this process is that this leaves lawyers “doubting their own skills.” This is a curious position in that it reduces lawyers and other employees to toddlers who treat the words of their employers as gospel. It shouldn’t come as a surprise at this point that performance reviews are not the byproduct of an objective, scientific inquiry. Thus, employees should always understand what employers tell them in context; they should recognize that employers have their own agenda, which regularly doesn’t coincide with theirs. 

Most importantly, it is more practical and accurate to understand what is going in much less dramatic terms. Some large law firms are seeing a reduction in demand for transactional lawyers. This is in part tied to the increasing concerns about an upcoming recession. It would have been much better if this article touched on what is going on in terms of the usual ups and downs of supply and demand and the business cycle. Certain practice areas are showing decreases in demand and unsurprisingly transactional lawyers are more likely to be impacted should we enter a deep and prolonged recession. 

Moreover, there is a straightforward anecdote to the so-called “Stealth Layoffs.” If you happen to be one of those who will be subject to a surprisingly bad performance review, when you are interviewed, consider intimating that the firm was going through some tough times. It is easy to find articles that, for example, show that in August 2022 the legal services industry shed 9,000 positions. During the interview you can express a reluctance to say bad things about your employer and still explain that the now former employer was being economically impacted. And most of the time, you are under no obligation to volunteer a negative performance review.   

Employers aren’t the only ones that can be and have been “stealthy” in describing what happened in their careers.