A recent survey from Wells Fargo Private Bank found that 15 percent of U.S. law firms plan to reduce their number of partners in the first quarter of 2013.
The survey, which comprises financial data from 115 firms, found that firms saw modest revenue gains in the third quarter of this year, but their overall growth is stunted because some of their partners aren’t billing enough hours. Some firms reported that they plan to cut underused partners. Survey respondents said the total number of hours their attorneys billed in the third quarter dropped 1.5 percent compared to the same period last year. Jeff Grossman, the national managing director for Wells Fargo’s legal specialty group, told Thomson Reuters that the problem of underused partners is “one of the biggest challenges the industry is facing.”
Partnership reduction due to financial challenges isn’t a new phenomenon. In 2009, during the height of the recession, a quarter of law firms that Altman Weil Inc. surveyed said they had cut equity partners, and 26 percent said that had cut some of their nonequity partners.
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