Up to PAR

In today's National Law Journal, Karen Sloan explores an idea advanced by PAR: law firms should consider offering nonstigmatized reduced hours schedules to associates as an alternative to layoffs. (Cost-saving option for firms: reduced hours, by Karen Sloan, Jan. 05, 2009; subscription required.) Here's a brief summary for those of you who don't subscribe:

• PAR and several law firm consultants are recommending that law firms look seriously at implementing reduced hours programs to manage their workforce and protect their reputations during the down economy. Many firms have laid off attorneys in recent months due to a lack of work. Linda Bray Chanow, PAR's Director of Research, said that associates would work fewer hours and receive proportionally reduced compensation, which would allow firms to lower their costs without losing their associates. The proposal is a business initiative, according to PAR Co-Director Cynthia Thomas Calvert. (Okay, the article really said that Calvert was the assistant director at PAR. But we're taking the liberty here of setting the record straight while we're summarizing.)

• The article quotes Linda Headley, shareholder at Littler Mendelson, as saying that although her firm has not had to consider layoffs, if it were facing the issue, it would look at all of its options to preserve its talent. She noted that it is hard to get talented lawyers, and worth working to keep them. Michael Nannes, chairman of Dickstein Shapiro, is reported to have said that although firms use flex-time programs to accommodate changes in lawyers' lives, he doesn't think many firms will reduce hours to cut costs because reduced hours do not result in the same savings as layoffs. An example given is the a firm has to continue to provide office space to attorneys working reduced hours. Nannes also noted, however, that clients want continuity in their outside lawyers, and the reduced hours alternative would maintain client relationships.

• Chanow, the article continues, notes that the reduced hours alternative gives firms the ability to handle increases in workloads by recalling some associates to full-time. She also notes that the alternative will maintain diversity among firms' associates, because the young associates who are most likely to be laid off are also most likely to be the firms' most diverse lawyers. Charles Santangelo of Hildebrandt International adds that firms that use reduced hours in lieu of layoffs will earn their associate's loyalty and make future recruiting easier. Douglas Richardson of Altman Weil questions whether clients may feel they are not getting value if a number of associates work on their matters.

• Two final issues are raised in the article. The first is stigma. Calvert notes that the perception that reduced hours schedules are career-enders needs to be addressed by firms in order for the layoff alternative to be successful. The second is whether the reduced scheduling should be voluntary or mandatory. While PAR recommends voluntary programs, Richardson recommends that the programs be mandatory to avoid the reluctance of associates to reduce their hours. He suggests that firms spell out the terms under which reduced hours schedules could return to full-time in the future.

Sloan has done a nice job of laying out both sides of the issue, and we hope that frank conversations will result in law firms that are facing the need to cut costs due to declining workloads. Tomorrow, we will explore the topic a bit more in this space. In the meantime, if your firm is considering reduced hours in lieu of layoffs, please drop us a line and let us know.