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Corporate law firms cut staff, slash pay

Chicago's Katten Muchin Rosenman, Jenner & Block insist they are financially solid

By Ameet Sachdev | Tribune reporter

March 20, 2009

Two corporate law firms in Chicago eliminated jobs and slashed salaries Thursday in bids to withstand one of the worst falloffs in the legal business in decades.

Katten Muchin Rosenman LLP fired 23 attorneys and 46 staff members in its second round of dismissals in five months. The layoffs included 12 associates and seven non-equity partners out of more than 600 lawyers.

Jenner & Block LLP laid off 34 support people in its Chicago and Washington offices. None of its nearly 500 attorneys were let go, but the firm has asked dozens of partners to leave in the last two years.

Both firms asserted in statements that they remain on solid financial footing. Revenues are falling across the legal industry, as the one-two punch of the recession and the credit crunch has curtailed corporate mergers, commercial lending, real estate deals and other staples of the business.

Corporate clients also are balking at high legal fees, noted Susan Levy, Jenner's managing partner.

"Increasingly, price sensitivity in the marketplace demands that we more closely align the firm's cost structure to best serve clients," she said.

The restructuring at law firms also includes taking a hard look at compensation policies, which traditionally have rewarded associates, younger lawyers working toward partnership, with annual salary increases regardless of their performance.

In an effort to preserve jobs, Katten associates who fell 200 or more billable hours short of their 2008 target will have their pay cut by 20 percent.

Katten also reduced its summer law-student program to 8 weeks from 10 weeks and cut interns' salaries by 20 percent. Also, its new class of lawyers graduating from law school in the spring will not start with the firm until Feb. 1. These associates will receive an undisclosed stipend.

asachdev@tribune.com