Top 50 Am Law Firm’s Leader Explains His Decision On Layoffs, Deferrals Amid Turbulent Economy

// Earlier this summer, several firms conducted layoffs and deferred their incoming associate classes, with some offering more transparency than others as to the reasons why such decisions were made. Now, the CEO of a top 50 Am Law firm that cut 6% of its global workforce in June is offering his insights on why, exactly, layoffs took place at his firm.

Mitch Zuklie, the leader of Orrick — a firm that brought in $1,379,702,000 gross revenue in 2022, putting it at No. 32 on the most recent Am Law 100 ranking — recently sat down for an interview with the American Lawyer to discuss what led up to last month’s reduction in force.

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At the time, when Biglaw firms were feeling the effects of the tech industry’s implosion, Orrick cited “reduced client demand” related to “market uncertainty.” Zuklie got real about that in his chat with Am Law.

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“The reality is tech is a big part of our business,” Zuklie said. According to the firm, the tech sector accounts for about half of its overall revenues. The firm’s other primary sectors—energy and infrastructure, and finance—account for about 20% and 25% of revenues, respectively, with a variety of other sectors accounting for the remaining 5%.

“Things haven’t fallen off a cliff, but they haven’t been on fire,” Zuklie said of the tech group. “The economy is at a moment where there is a down market and we’re in a service industry. When our clients are pausing, it’s not surprising that we need to do so as well.”

While other firms overhired during the 2021 talent wars and used outright and stealth layoffs as a way to cut their oversized head counts throughout 2023, Orrick took a more reasoned approach to hiring and is using its own layoffs and deferrals as a service to its remaining attorneys and staff.

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“The truth of the matter is, if we don’t have enough work for everyone to get the required experience to advance their careers in a thorough way, it’s not healthy and it doesn’t provide the best results for our clients,” Zuklie said. “We want inspired lawyers who are getting opportunities to progress with a full plate of work, not a situation where no one gets those opportunities.

“We thought it was the responsible thing to do for Orrick, for our clients and for the people who are relying on us to create career advancement opportunities,” Zuklie told Am Law. “We hope we did it in a way that was transparent and fair to everyone with whom we’re cutting ties.”

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Best of luck to Orrick as the year unfolds. Zuklie says he’s “optimistic” about it, concluding in his Am Law interview that he “hope[s] [the firm will] emerge from 2023 as a stronger firm than we started the year.”

Orrick CEO Unpacks Latest Layoff Decision in the Face of Uncertainty [American Lawyer]

Earlier: Top 50 Am Law Firm Announces Reduction In Force, Will Cut 6% Of Global Workforce

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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, Mitchell Zuklie, Orrick