Performance Improvement Plans: The New Way For Biglaw Firms To Conduct Stealth Layoffs

// It may be the middle of summer, but many Biglaw firms are still trying to slim down (in terms of head count) in any way they can. Hence, the rise of the midyear review, which inevitably leads to associates being put on performance improvement plans (PIPs), a process that could later leave associates jobless.

Is this Biglaw’s new modus operandi for stealth layoffs?

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“Right now, I do think PIPs are being used in a way they haven’t been used in the past in giving firms a strategy to facilitate layoffs without having to call them that,” Summer Eberhard, a partner in Major, Lindsey & Africa’s associate practice group, said during an interview with the American Lawyer. Here are some additional insights:

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In the same way Big Law firms evolved to use stealth layoffs in lieu of admitting overhiring and overcapacity, performance improvement plans have become another favored method of managing head count at some law firms.

“It used to be that, in pre-pandemic years, it was hard to get a review done. Associates would be like, ‘I was supposed to have my review in December and I haven’t had it,’ it’s because they’re doing fine. Everything is going at status quo,” said Jessica Chin Somers, managing director at Kinney Recruiting. “What we’ve seen here is more firm leadership calling or more reviews, a half-yearly review they would call it. … They’re letting people go based on those ‘performance reviews’ even if they’re performing fine.”

We’ve reported on several firms that have made associate cuts following so-called performance reviews (Kirkland & Ellis; Ropes & Gray; Goodwin), but associates are now being quite vocal on social media when it comes to PIPs and ensuing job loss — and they’re not happy about it.

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“PIP might be one of the most terrible things law firms have come up with,” one associate wrote on Fishbowl. “How do we fire people in a few months if market conditions don’t improve while covering our ass from wrongful termination lawsuits and still extract as much sweat as we can from these people? PIP.”

Is your firm using performance improvement plans to show associates the door? We certainly hope not. Good luck out there, everyone.

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If your firm or organization is reducing the ranks of its lawyers or staff, whether through open layoffs, stealth layoffs, or voluntary buyouts, please don’t hesitate to let us know. Our vast network of tipsters is part of what makes Above the Law thrive. You can email us or text us (646-820-8477).

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Midyear Reviews, Performance Plans Create Pretext for Future Layoffs [American Lawyer]

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Staci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter and Threads or connect with her on LinkedIn.

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Biglaw, Layoffs, Performance Improvement Plans, Performance Reviews, Stealth Layoffs