Cooley lays off 78 lawyers as U.S. law firms fight demand dip

Cooley LLP offices in New York. REUTERS/Andrew Kelly

(Reuters) - Silicon Valley-founded law firm Cooley said Wednesday it has laid off 150 U.S. employees, including 78 lawyers, amid a drop in client demand for the firm and the broader U.S. legal industry.

Joe Conroy, Cooley's chairman and CEO, said in a firmwide email reviewed by Reuters that certain practice groups were "substantially overbuilt" after aggressive hiring to meet soaring demand in 2020 and 2021.

"Simply put, we hired more talent than we can reasonably develop, train and deploy against current and anticipated client demand," Conroy said.

None of the attorneys who were laid off were partners, and a majority of the reductions came from the firm's business department, which handles M&A work, according to a person familiar with the layoffs.

Cooley earlier this month confirmed it had conducted an unspecified number of "attorney separations" as a result of annual mid-year associate performance reviews it held over the summer. A person familiar with the matter said those performance review-related departures were different from Wednesday's layoffs.

The layoffs come as many large tech companies — a core Cooley clientele — have also been trimming their workforces. Facebook parent Meta Platforms Inc said earlier this month it would slash 11,000 jobs, and Amazon.com Inc said it had laid off some employees in what could preview much larger cuts.

Cooley had revenue of $1.98 billion last year and had more than 1,200 attorneys, according to trade publication American Lawyer.

Many U.S. law firms went on a hiring spree last year to keep up with record-breaking global M&A activity that topped $5.9 trillion in deals. But that transactional work has slowed in 2022, and the demand for legal services has dropped overall, Wells Fargo's Legal Specialty Group found earlier this month.

Conroy said the firm's recruiting success "proved to be misaligned with the unexpected economic downturn that has occurred and will likely persist well into the year ahead."

Conroy said the employees who have been laid off will receive severance benefits and other services.

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David Thomas reports on the business of law, including law firm strategy, hiring, mergers and litigation. He is based out of Chicago. He can be reached at d.thomas@thomsonreuters.com and on Twitter @DaveThomas5150.