Legal.io
Jun 30, 2022

Community Perspectives: Do most companies follow 'last in, first out' during layoffs?

In-house legal professionals talk about how they think layoffs are conducted within companies.

Community Perspectives: Do most companies follow 'last in, first out' during layoffs?
(Author) Counsel
In your experience do most companies follow “last in, first out” during layoffs? I’m not the most junior, but I am also not senior level and I am the newest overall. I get the impression that some people that have been here longer than me do less work. I’m not the most junior, but I am also not senior level and I am the newest overall.
 
General Counsel Responses:
  • I saw the writing on the wall and left my previous company prior to a round of layoffs. They cut an entire title class when COVID hit…kept the more “experienced” and expensive folks, and cut all the junior titled lawyers as part of a merger. Upper management clearly only valued certain folks. I knew that while I had some specialist knowledge bases, there were smaller areas that may or may not have been valuable. (Ironically one of them was critical during COVID, so perhaps I would have survived the layoff). It was a gut instinct. I talked to a law school friend who was in a higher CLO role in a wholly different industry and she advised me to get out. I also had a competitor offer on the table so I took it.
  • I've been through a few as a contributor, and I think they're normally first to cut under-performers. I can say as a leader now, there's no way I'd follow last in, first out, unless those people were also (a) so expensive that I could cut fewer people by cutting the newest people and/or (b) those people had not yet demonstrated that they'd provide value. At the end of the day, I need the best people I can keep, regardless of when they got here. Particularly when you're a new leader, those aren't always those who have been there the longest.
Counsel Responses:
  • Not from my experience. I went through something like that at a previous job about seven years ago. I was the newest hire in a team of 15 attorneys. A significant downturn causes them to start making cuts - first was a middle manager and a couple of more senior folks. I lasted another year before I left voluntarily for a new/better job. Also, once the cuts started, people started looking and leaving voluntarily one by one. This made it harder for company to make more cuts as they needed us to absorb the work of those who left.
  • It’s more about profitability and ROI. The biggest skill as an in-house lawyer is marketing to the C-suite how you save them money and, ideally, even make them money. Metrics are a corporate lawyer’s best friend.
  • It’s a combo I think. My former company targeted me as the most junior attorney and last in, first out but I was also highly paid (I guess they thought overpaid) as were all the other folks (all non-legal) that got laid off. It’s about how much you cost vs how much value you bring to the company. Legal often gets viewed as a cost center only.
Attorney and Associate Responses:
  • In my opinion, the decision is mainly based on whether the big boss likes you or not. The people staying at the job for a long time already proved that. As a new person, if you can get the big boss to like you more than others (either by crazy 'brown nosing' or doing much better work, depending on the culture), you should be fine for a while.
  • My department hasn’t historically let people go during downturns, but my sense is that if we did, we wouldn’t do it based on seniority; instead, there are some under-performers who would likely be culled before we started cutting muscle.
  • I don’t think so. Why would a company hire you, invest in you to learn its procedures and then let you go?
 

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