By Sara Merken
(Reuters) - New York-founded law firm Shearman & Sterling said Wednesday it has laid off attorneys and business professionals, citing a need to "align our capacity levels with existing client demands."
Shearman cut 12 associates and 26 business services professionals in the United States, in what a firm spokesperson described as a response to "continuing and growing economic headwinds and market conditions."
The layoffs follow similar moves by a handful of other large U.S. law firms amid cooling client demand for legal services, especially for work involving corporate deals.
The cuts at Shearman, which has about 850 lawyers globally, "focused mainly on transactional practice areas most affected by current and projected market conditions," the firm said.
Seattle-founded law firm Davis Wright Tremaine laid off 21 professional staff this week in areas the firm "either had excess capacity or redundancy and misalignment," according to a Tuesday statement from its managing partner Scott MacCormack. The cuts there did not include any lawyers, a spokesperson said.
Other law firms that have trimmed their lawyer and professional ranks in recent months also cited staffing levels that outmatched demand, including Goodwin Procter, Cooley and Stroock & Stroock & Lavan.
Law firms surveyed by Wells Fargo (NYSE:WFC)'s Legal Specialty Group reported a 1.9% drop in demand in 2022. Lawyer headcount was up 4.5% after firms kept on most of the attorneys they hired in 2021 and early 2022 to handle surging M&A work at the time, the report said.
Shearman has recently seen some partner exits to rival firms, including the departure this week of London-based lawyer Phil Cheveley, who was head firm's M&A practice for EMEA and Asia. A seven-lawyer team left last month in Abu Dhabi and Dubai, and a group in France including Sami Toutounji, head of Shearman's European governance and benefits team, left in October.
The firm in December also acknowledged reports, without confirming or denying them, that it is in early-stage merger talks with Hogan Lovells. Shearman has reportedly also been in discussions with other firms.
Shearman generated about $1 billion gross revenue in 2021, according to figures reported by The American Lawyer, placing it at number 50 in the magazine's revenue rankings that year among U.S. firms.