New York Lawyer
January 2, 2003

Q:
Our partnership recently decided to cut some costs by laying off a couple of dead-wood partners. (We've also laid off some associates.) I didn't have to deliver the bad news, but I saw a guy who had been let go in his office, actually crying as he sat at his desk. I have to tell you, it made me feel awful.

He probably shouldn't have been made partner in the first place, so when we had problems it made sense for him to be let go. This guy is usually the most stoic, centered person. And the person who delivered the bad news also felt miserable and continues to feel that way.

Does everybody react this badly to layoffs, whether you're the one laid off or not? Aren't there other ways to deal with a slow economy?

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A:

The extreme nature of layoffs, and their effect on an organization, is often poorly understood by those wielding the axe.

A good example is the emotional reaction from normally stoic types, such as the one you observed; that's often the case when something as drastic as a job loss occurs. It's quite common for men, even those who ordinarily are unemotional, to fall apart in these situations. If they are the main or sole breadwinner in a family as well, it's obviously that much worse.

Even when the situation is not so much about performance but about a lack of available work, thus not a merit issue, it's devastating. No matter how much they rationalize, the people who have been laid off are ones who have been shown the door, and it hurts badly.

And watching layoffs is painful all around. "Survivors" tend to feel guilty and miserable. They wonder if they are next, they suffer from anxiety, they doubt the loyalty of the institution, and their dedication to their present workplace diminishes.

I read comments that law firms want to take advantage of slow times and make people feel pressured to work harder, and that they deliberately stifle transparent reporting of financials to keep the anxiety alive and make people fear for their jobs. A more cynical and short-sighted approach is hard to imagine.

Sure, today the economy is bad and people are worried for their jobs, thus they may dig in deeper and work harder. But they will do it with resentment and bitterness towards those they suspect of being duplicitous or of taking advantage of uncertain times for their own ends. And think about the bad blood it sows for the future. As soon as the economy turns up again, those people (unencumbered by any loyalty or feelings of gratitude toward their workplace) will be out the door if they so choose.

In my opinion, yes, there are other options.

A workplace can make a commitment that layoffs are absolutely only a last resort, in a time of clear crisis, and utilize other approaches when times are slow -- reducing hours, reducing pay across the board, and encouraging flexible work arrangements. The way to stick to a commitment against layoffs is to have stronger systems and procedures for hiring, for deciding who becomes partner in the first place, and any other decisions informing the size of the workforce at a given time.

You say this man shouldn't have been made a partner in the first place. Good times often result in a softening of the criteria for partner. A long-term orientation would ask the hard question, "What will happen if the economy sours? Will we be able to sustain this person and his contributions?"

It's unpopular, often, to ask these fundamental questions, especially when times are flush and when (even in the face of so much history to the contrary) people think they will go on forever. But it's critical to insist on rigorous procedures at all times. Having gone through a cycle or two sharpens people's perspective, but nonetheless many practitioners tend to put on blinders while they go through an up cycle.

By the way, there are lots of studies of corporations showing that companies that routinely resort to layoffs do not reflect better results than those that have a more stable workforce, and in fact often do worse over the long term. Constant seesawing -- hiring in good times, layoffs in bad -- suggests an organization that is not focused on long-term strategies but that only thinks in the short term.

Sincerely,
Holly English
Principal Consultant, Values at Work