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SAN
FRANCISCO, March 16, 2009: Layoffs aren't the only way for
law firms to reduce their payrolls, according to an economic
analysis of layoffs issued today by the Project for Attorney
Retention (PAR). The analysis finds that balanced hours,
which are reduced schedules that are designed to meet law
firms' business goals, can significantly cut costs and save
jobs at law firms.
PAR
Co-Director Joan Williams explained, "Layoffs and flexible
downsizing are two models for matching supply and demand
when there is not enough work to keep everyone busy. Our
analysis shows that flexible downsizing with balanced hours
may save as much or more than layoffs. Flexible downsizing
also helps firms retain their investment in high-performing
attorneys and avoid certain legal risks."
The
analysis provides an example of how balanced hours can be
used to align attorneys' schedules with current workloads.
It provides a hypothetical of a law firm department with
six associates, each averaging $200,000 per year in salary.
Cutting one associate would save the firm about $211,000,
which PAR calculates by looking at the savings from salary,
benefits ($60,000) and malpractice insurance ($4,000), less
the cost of severance ($50,000) and outplacement services
($3,000). A balanced hours program, on the other hand, would
save this same law firm department $240,000 by asking each
associate to reduce his or her hours and compensation by
20%.
Using
balanced hours has the added benefit of providing a means
to handle fluctuating periods of workflow without demoralizing
layoffs and the expensive and time consuming hiring process
when business picks up. "The firm retains its high-performing
attorneys that it paid dearly to recruit and train,"
said Cynthia Calvert, Co-Director of PAR. "These attorneys
are immediately available to jump in when workloads increase."
Balanced
hours differ from traditional part-time programs in that
balanced hours programs have a focus on professional development
and client service. The balanced hours program developed
by PAR is designed as a business initiative that firms use
to recruit and retain high performing attorneys, who provide
superior client service because their longer tenure at their
firm allows greater familiarity with client business. Key
elements of balanced hour programs include the elimination
of the stigma often associated with traditional part-time
programs and the promotion of balanced hour associates to
partner. PAR advises that firms implementing balanced hours
programs as a cost-saving strategy provide strong reassurances
that reducing one's hours will not result in negative career
consequences.
For
the complete analysis and to learn more about balanced hours,visit
PAR's website. The report
can be downloaded here.
The
Project for Attorney Retention, a nonprofit organization
that studies the advancement of women lawyers and work/life
issues for all lawyers, is headquartered at UC Hastings
College of the Law. Its co-directors are Joan C. Williams,
distinguished professor of law at Hastings, and Cynthia
Thomas Calvert, a former law firm litigation partner. This
analysis was spearheaded by Linda Bray Chanow, PAR's director
of research. PAR is funded by the Alfred P. Sloan Foundation
and other grantors, and by its law department and law firm
members.
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