While the true reasons behind the Sullivan & Cromwell layoffs are not known—the firm has not made any public comment regarding layoffs of around 50 staff members that were reported last week—the assumption from sources is that it was a business decision rooted in pandemic-fueled economics. But that might not be the full story. 

Sullivan & Cromwell ranks fourth in the Am Law 100 in profits per partner, is not leveraged and owns its own building. If a firm like that is jettisoning staff to save money, what does that mean for those who don't enjoy the stability and resources of the white shoe, Wall Street giant? 

It means firms are taking a long, hard look at their staffing arrangements. The pandemic, among other things, has been a great experiment in the effectiveness of remote working and the capability of attorneys to do much of what was formerly done by legal secretaries and or legal administrative assistants (LAAs).

According to several legal consultants and Big Law leaders, legal secretaries and other administrative staff are in trouble. What happened at Sullivan & Cromwell may in fact be a bellwether for cuts to come. 

One Am Law 100 firm leader, speaking anonymously, said that the past four months have brought to light that their firm is "overstaffed," specifically around legal secretaries and/or LAAs. 

While some firms took decisive measures around staff cuts right off the bat during the pandemic, this firm wasn't one of them. 

"I'm struggling with the moral end of it," the firm leader said. "We probably won't reduce marketing and billers, but rather those administrative personnel that work with the lawyers that are not revenue producing."

The leader said that even if that does come to pass, it most likely wouldn't be until the new year, as the firm continues to evaluate its financial future against what the leader sees as a moral obligation to its employees. But the writing is on the wall, now more visible thanks to COVID-19-inspired working conditions. 

"I would say the pandemic has given the opportunity to rethink the shape of a law firm," Jennifer Johnson, founder and CEO of legal recruiting and consulting firm Calibrate Legal, said. "I think it has heightened an awareness that the traditional model may not be what we are going to see as having the most success going forward."

Kent Zimmermann, veteran legal consultant and partner at the Zeughauser Group, said in an interview that while he does not expect a round of sweeping layoffs, his discussions with various firm leaders have led to the conclusion that this is not just an acute reaction to economic hardship from the pandemic, but rather that the pandemic has laid bare the fact that many firms are in fact overstaffed. 

"In a time like this, sometimes firms look to address inefficiencies," Zimmermann said. "If they really look to address them, overcapacity is low-hanging fruit."

He said that a variety of factors play into the decision to get rid of staff, including firm financial performance, culture and the firm's nonequity partner situation, as the latter can provide significantly more cost savings to the firm than shedding lower-paid staff. 

Another Am Law 100 firm leader who didn't want to be named said their firm has participated in some furloughs and layoffs of staff thus far, but has not gone to the full extent the firm believes is appropriate for its business needs. 

"We were already moving toward a complete reorganization of the staff before the pandemic," the firm leader said. "We are good at managing expenses in pretty much every other category. But we have not been good at that with legal administrative assistants."

The firm leaders interviewed for this piece pointed to the pandemic and the success of remote work as essentially proving the theorem that lawyers can in fact do many of the things their legal assistants had been doing for them when everyone was in the office, buttressing the case for lower head count and higher ratios of LAAs to attorneys.  

"I go days now without talking to my legal assistant," one leader quipped. 

The firm leaders said that the conversations they are having with their peers at other firms are pointing in the same direction: Administrative staff head count will go down for many firms in the upcoming months, but it is unfair to suggest that this is strictly a COVID-19 issue. 

Read More: 

Open, Not Stealth, Layoffs the Way to Go With Current Generation of Associates

Multiple Staff at Sullivan & Cromwell Laid Off, Sources Say

Pay Cuts, Layoffs, and More: How Law Firms Are Managing the Pandemic