In a recovering economy, law firms in the Baltimore area and across the nation are likely to continue some of the practices that helped them compete in the recession — staff reductions, hiring pullbacks, limiting partner slots and offering clients alternatives to hourly billing.

That's according to a recent survey of more than 200 firms nationwide by consultancy Altman Weil Inc. It tracked changes spurred by the recession and found that some of the biggest staffing and overhead cuts ever made in U.S. law firms happened last year. The findings are echoed by local attorneys and experts.

The survey showed widespread layoffs as 67 percent of law firms cut support staff, 43 percent cut paralegals and 44 percent cut associates. Nearly 40 percent of firms polled also said they made fewer partnership offers last year, a trend that the survey indicates will continue through this year.

While workforce reductions at firms are not over, they are expected to be more limited this year, according to Altman Weil.

Several Baltimore-area firms either shed employees during the economic downturn or managed to avoid layoffs but took other steps to control costs, such as holding off on hiring associates or limiting the number hired.

Venable LLP, which has about 550 lawyers and about 2,000 employees in Baltimore, Towson and several other offices, was forced to lay off 64 employees last March, including 3 percent of its attorneys and 7 percent of its paralegals. The firm has not made further cuts and now is hiring, though more conservatively, said Michael J. Baader, partner in charge of Venable's Baltimore office.

"The numbers may be down a little bit, but we never turn off the hiring spigot," Baader said. "If you just don't hire anybody for a couple of years, you will have a big hole in your organization."

James P. Nolan, managing director of Council, Baradel, Kosmerl & Nolan, a 24-lawyer firm in Annapolis, said the recession hurt practice areas such as real estate but that other areas were up enough to counteract the declines. He said the firm has resumed hiring after holding off through much of the downturn.

"Going into this year, we've seen an increase in business and are going to be hiring four new associates who will be joining us in September," he said.

But the downturn years have been difficult ones for new attorneys.

"Young lawyers are finding it more difficult to find employment opportunities this year than they found, let's say, a handful of years ago. So these last couple of years have been difficult ones for recent graduates," said Edward J. Gilliss, of Towson firm Royston, Muller, McLean & Reid. He said his firm has had a constant number of practicing attorneys during the past few years.

Nearly all respondents to the Altman Weil survey said they offered fee arrangements other than hourly billing to satisfy requests from clients.

That strategy helped draw more clients to Jackson Lewis LLP, which opened a Baltimore office in January. Alternate payment structures include fixed or capped fees, or an annual fee.

"This was all driven by clients' needs," including companies looking to lower their legal budget as they struggled to lower expenses, said Richard J. Hafets, managing partner in the firm's Baltimore office. "We have done a lot of alternative billing arrangements that we never would have had the freedom and flexibility to do in past environments."

The Altman Weil survey also found it has become harder to reach the level of partner in law firms. Nearly 40 percent of firms polled made fewer partnership offers last year and half said they expected to make fewer offers this year.

Lorraine.mirabella@baltsun.com

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