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The Shift: Time to Lay Off Lawyers or Scale Up? Big Law Faces Quandary

What a difference just one year makes. At this point last year, law firms were in a hiring frenzy, gobbling up groups of associates because of a deluge of transactional work, including for SPACs, M&A matters, IPOs and real estate deals. Five or even six-figure bonuses were being offered to associates to get them to move—or stay in place without getting recruited.

With the slow down in most types of deals in 2022 however, law firms have less work on their hands. Associates at some firms—especially those with large corporate practices—are "underutilized," as some firm leaders say. Law.com has reported on associate cuts several firms, including at Kirkland & Ellis after performance reviews and at Gunderson Dettmer Stough Villeneuve Franklin & Hachigian. And just on Wednesday, Cooley announced it was laying off  150 lawyers and staff. Meanwhile, concerns are rising that more law firms, especially in New York, could also lay off lawyers.