Midsize Chicago firm cuts handful of attorneys

Neal, Gerber & Eisenberg, a 200-lawyer Chicago firm that counts real estate, litigation and mergers and acquisitions among its strong suits, has cut a handful of attorneys following annual performance reviews that have taken on a harder edge amid the economic downturn.

The firm this month cut fewer than 10 attorneys across various practice groups, said Jerry Biederman, the firm’s managing partner. He declined to be more specific. The cuts weren’t that different from those the firm has made on an annual basis in the past, though evaluations are naturally tougher in a downturn when there’s less work to go around, Biederman said.

Biederman left open the possibility that the firm may have to make additional cost reductions if the economy continues to sour and negatively impacts law firm work. The new Obama Administration and its proposed stimulus program will likely determine whether there is new work created for law firms. The proposed stimulus could accelerate companies’ disposal of real estate and other assets and thereby boost transactional work, he said. An expected rise in restructuring work could also finally develop, he said.

“Things could change for good or ill,” Biederman said in an interview. “We’re monitoring the situation like everybody else and the fear that we all have is that we haven’t seen the bottom of this downturn.”

Neal Gerber’s financial results for last year are likely to be about the same as in 2007, though the firm doesn’t have final figures yet, Biederman said. That would be a positive outcome for 2008 even though it wouldn’t have been considered good in other years, he said.

The Obama Administration and its legislative priorities may also spur more work for law firms in practice areas related to healthcare law and labor unions and organizing, Biederman said.

“I think the economy will get worse,” Biederman said. “We just don’t know what that means for law firms.”

Wildman, Harrold, Allen & Dixon, another Chicago firm with about 200 attorneys, said last week that it was cutting 10 attorneys, including five income partners and five associates. While the firm said the reduction resulted from the standard annual review process, it noted in a statement that “the current economic conditions bring heightened attention to these otherwise normal business processes.” The firm also said that it had added seven lawyers this month, including three partners and four associates.