So some firms are doing fine and still looking to hire. But Lepofsky says he knows there are others that have been quietly letting people go since November. Some of that is due to normal factors at play every year, but part of it can be attributed to the economy. “Some of that is due to the economics, and some of that is the natural attrition . . . [associates] that aren’t fitting in, or lack a level of competency, partnership track, and those sorts of things,� says Lepofsky. “So with normal variables, that yearly attrition is always in play, from about November to February. The reason for that timing is that bonuses and raises are announced usually mid- to end of February . . . [and] those that they want to get rid of, they want out before that time because they don’t want to pay their bonuses.

“So there’s some of the normal, run-of-the-mill attrition, and there is definitely that which they’ll chalk up to that, but will be a product of what we’re seeing economically,� he says. “The firms have slowed down.�

Lepofsky says 2008 was a very good year for law firms still running off the fumes of 2007’s successes. “But it’s what’s in the pipeline, or what’s coming down the pipeline, which is what we’re looking at.� This sort of thing has happened before, says Lepofsky. In referring to the tech bubble burst of 2002, he says “there was quite a purging on Bay Street of associates and those that weren’t on partnership track and partners that weren’t producing at a particular level. And that will happen again, and it is inevitable.�

It may be hard to identify them though. Lepofsky offers some reasons for firms trying to keep their downsizing quiet. “Firms generally don’t want to get on the radar screen like a Clifford Chance . . . did,� he says. “They try and avoid being pegged by the media as laying off.� He says layoffs right now are being done under the guise of performance issues or not fitting in with the firm’s team, but in reality, the market is playing a role. “They’re all going to be very quiet about it . . . and that’s all about the image and protecting it, it’s all public relations,� says Lepofsky. “They don’t want to be seen as the firm or one of the firms that are in bigger trouble than somebody else, that they’re not doing as well as someone else.�

“It’s the stealth purge,� he says.

Guy Joubert, president of the Canadian Bar Association, agrees that you can’t argue with the fact that firms are starting to feel the effects of a failing economy. “I think, generally speaking, there is no doubt that the legal profession is starting, and is experiencing, the effects of the downturn,� says Joubert. While he’s quick to point out things aren’t as severe in Canada as the are in the U.S. and U.K. markets, he says “obviously things may change in the future.�

The fear of layoffs, real or imagined, likely means most associates are paying close attention to their numbers and working hard to stay busy and remain a valuable asset to the firm. “It’s inherent in the Bay Street associate, any major law firm associate, and for that matter almost every lawyer, that when they’re not busy or ‘busy enough,’ they are especially paranoid, nervous, [and] uncomfortable,� says Lepofsky. “Lawyers inherently need to be busy, need to feel busy, need to [do] things. If they’re not, or if they sense they’re not, then absolutely they’re nervous, scared, apprehensive, all that sort of stuff.�

Joubert says: “I think it’s fair to say that the legal profession will be impacted, and there will be some areas of law that will be impacted more than others.� Certain specializations are positioned to weather the storm better than others. “In restructuring and insolvency areas, there would likely be an increase of activity there, litigation there could be an increase of activity, and even potentially in the labour law area,� he says. “If all of the sudden Canadians are faced with layoffs that they feel are unjustified — there are unjust dismissals and those kind of things.� Lepofsky notes: “On the positive side of it, litigators are doing pretty well, and in the next few months . . . we will see more and more insolvency/restructuring lawyers starting to do very well. So the firms that have solid groups, and have a good bench in the lending, real estate, insolvency, [and] refinancing arenas, will be doing just fine.�

Gage confirms they are seeing that trend at Ogilvy. “Bankruptcy and insolvency practitioners are extraordinarily busy right now. Employment and labour lawyers also tend to get very, very busy during a downturn in the economy,� says Gage. “Obviously the work that they’re doing tends to involve things like layoffs, and perhaps plant closures, that kind of thing — but it certainly makes for busy practices for those folks.�