Merger off, lawyers fired, and lawyers hired – Rational?

A major player in the IP field announced that its merger plans with another IP firm have been called off. The assertion is that there were conflicts issues with one major client that could not be resolved and the client would not waive the conflict. While I may be dubious about the veracity of this assertion, sitting on the outside, it does happen.

But, then the firm announces that "… the downturn in patent litigation persists, with fewer cases being filed and more settling earlier…. (C)ases coming in are smaller with tighter budgets and leaner staffing expectations…."  And this results in firings/terminations/layoffs (say it anyway you want, the people are gone) of lawyers and staff.  In other words, the troubled economy is still having its impact on law firms.

So far, so good. But, then the firm also announces that it sees an increase in patent prosecution, counseling and reexamination work, particularly in the electronics and software practice and the firm will hire first-year associates. Again, from the outside, it looks like the firm is firing experienced lawyers who get paid 3X and will hire first year associates who will get paid 1X. You fill in the numbers. When industry does this, it’s called "age discrimination." It may also be called "stupid" because it negatively impacts the morale of the organization … and you don’t build a loyal, cohesive and capable workforce by seeking the least expensive team members. Why couldn’t the firm offer the presumably lower paying jobs to the experienced folks? In this economy, they might not like it, but they’d rather stay employed and working with colleagues they know and like and trust. And, the organization will look like a caring place to work, making needed economic changes but also sensitive to the needs of its current work force.

Just seems to me to be a better way to do things.  And, at the very least, the PR ineptness of these announcements coming on the heels of one another is just astounding.

Categorized in: Cash Flow - Finances, Management