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Monday, May 27, 2024

Mass Attorney Layoffs Yet to Materialize in Valley

In spite of recent large-scale layoffs at downtown L.A. law firms, San Fernando Valley area attorneys appear to be facing no near-term threat of similar actions on this side of the hill. According to San Fernando Valley Bar Association executive director, Elizabeth Post, the only notable layoff in the Valley recently was at Bollington, Stilz, Curry & Bernard, a Woodland Hills firm that has supplied staff counsel to insurance behemoth, AIG. Numerous attempts to reach the firm for comment yielded no response. Other than Bollington, Stilz, there has been little or nothing in the way of news about layoffs at Valley-area firms. “I don’t know of any other firms locally that have had to lay off,” Post said. That may be because the local legal profession has few firms with corporate clients at the stratospheric level of corporations such as AIG, or Citigroup. Stunning layoffs at big downtown law firms like Latham & Watkins, LLP, which cut loose 190 attorneys in late February, have been a result of corporate demises and major contractions on Wall Street. “Most firms in the Valley are not going to be representing the major, major corporations,” said Jim Felton, managing partner at Encino-based Greenberg & Bass, LLP, one of the top 20 firms in the region. “So we’re somewhat insulated from the current problems at the very top of the corporate world,” he said. He added that there is good and bad in the Valley’s mid-sized legal industry paradigm. For now, Felton believes, we’re in the “good” end of that spectrum. “We’ll always be in the middle,” he said. “If United Airlines went into bankruptcy and they called us and wanted us to handle the case, we couldn’t do that case; we don’t have enough lawyers.” That brings up another reason Valley firms may be well-poised to tough out the recession without having to initiate widespread layoffs. Unlike high-profile downtown firms doing corporate law for Fortune 50 clients, many Valley firms are narrowly focused on what are perhaps less glamorous, but perennially essential practice areas, such as bankruptcy, probate, and estate planning. Those are all practice areas which are, for now, flourishing. But the lack of layoffs locally is primarily attributable to firms’ sizes and the sizes of their clients, according to Felton. “If United called, I would need 15 lawyers just on that case,” Felton said (adding that if United called, he would probably find a way to accommodate the airline-industry giant’s needs). “But I would have to think about it, because once I hired those attorneys, I would need to keep them working even after the case was done.” Indeed, there is a corollary to that scenario and what happened at Latham & Watkins. The firm opened a New York office during boom years on Wall Street, expecting to forge global client relationships in the financial industry. To that end, the firm hired scores of associates associates who have been looking for new jobs since the February announcement about layoffs. One example of a typical small Valley firm is the Law Offices of Doron Tisser. Tisser has two associates working for him at his estate-planning practice in Woodland Hills. “I have not been affected,” he told the Business Journal during a recent interview. “But to the extent that estate planning is discretionary spending, it’s conceivable that there could be a slowdown for us in the future. It just hasn’t happened yet.” He believes his good fortune so far during the recession is attributable to the economic status of the clients he serves. “You have to look at the type of clientele,” Tisser said. “If clients understand the need for it they will pay to have it done.” Most of his clients are very well off, he said. “Nevertheless, I have had very wealthy clients who are holding off on doing stuff,” he said. “But it’s really about how wealthy they feel rather than how wealthy they may be in absolute terms.” How one feels about wealth, said Tisser, has to do with how long she has been wealthy and whether or not a loss in wealth has occurred recently. “If someone had $40 million and now has only $20 million, they may hold off on legal services, but someone who was worth $2 million but is now worth $1.5 million may see little reason to hold off.” Tisser believes clients’ perception of the economy will be the biggest determinant of whether or not his practice area and the overall Valley legal community will experience layoffs this year. “Just watch the general economy and the jobless rate,” he said. “But don’t forget if a client was smart enough to cash out of the stock market and they still have money, they’re probably smart enough to keep working with their attorneys.”

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