© Reuters. A man walks down the street carrying a briefcase in Manhattan, New York City, U.S., August 19, 2020. REUTERS/Andrew Kelly
By Sarah Merken
(Reuters) – New York-based law firm Shearman & Sterling said on Wednesday it had laid off lawyers and business professionals, citing the need to “align our capacity levels with existing client requirements”.
Shearman has laid off 12 associates and 26 business services professionals in the United States, in what a company spokesman described as a response to “continued and growing economic challenges and market conditions.”
The layoffs follow similar moves by several other major U.S. law firms amid reduced client demand for legal services, particularly for work involving corporate affairs.
The cuts at Shearman, which has about 850 lawyers worldwide, are “focused primarily on transactional practice areas most affected by current and anticipated market conditions,” the firm said.
Seattle-based law firm Davis Wright Tremaine laid off 21 professional staff this week in areas where the firm “either had excess capacity or redundancy and misalignment,” its partner Scott MacCormack said in a statement Tuesday. The cuts did not include any attorneys there, the spokesman said.
Other law firms that have cut the number of lawyers and specialists in recent months have also cited staffing levels that exceeded demand, including Goodwin Procter, Cooley and Stroock & Stroock & Lavan.
Law firms surveyed by Wells Fargo (NYSE:)’s Legal Specialty Group reported a 1.9% drop in demand in 2022. The number of lawyers rose 4.5% after firms retained most of the lawyers they hired in 2021 and early 2022 to at the time engaged in increasing M&A business, the report said.
Shearman has seen some partner departures to rival firms recently, including this week’s departure of London-based lawyer Phil Cheveley, who was head of the firm’s M&A practice for EMEA and Asia. A team of seven lawyers went to Abu Dhabi and Dubai last month, and a group in France including Sami Toutounji, head of Shearman’s European governance and benefits team, left in October.
The company also acknowledged reports in December, without confirming or denying, that it was in early-stage merger talks with Hogan Lovells. Shearman was also reportedly in talks with other companies.
Shearman generated about $1 billion in gross revenue in 2021, according to figures published by The American Lawyer, which ranked it 50th in that magazine’s revenue ranking for that year among US firms.