Any lawyers who thought that they were safely out of the woods might need to think again. Orrick has completed its second redundancy consultation, and has just decided to lay off another 300 staff.
 
In one of the largest rounds of layoffs to date, the firm said that 12% of its nonpartner lawyers would be cut. Twenty-five lawyers will be given the chop in Asia, the same amount in Europe, and 50 in the US. The firm also announced that 200 staffers would be let go.

Last November, the firm booted 40 associates and of counsel in its structured finance and real estate practices to the curb. It also decided that 35 staffers were surplus to requirements. Those 75 staff were offered five-month severance packages, but the people laid off this time around only receive a three-month package. By contrast, Latham & Watkins offered its associates a six-month severance package capped at $US100,000.

But aside from the fact that such activities are necessary in the current economic environment, they raise a number of prickly issues for law firms. The most notable of these is the impact that multiple rounds of layoffs have on staff morale.

Law firm consultant Wendy Tice- Wallner said that firms considering layoffs may need to make them all in one fell swoop so as to not erode staff morale.

"Most firms would prefer to do one round of layoffs. The ideal situation is to not be doing this very often and to know where you want to be six months or a year from now," she said. "You don't want people waiting for the other shoe to drop."

"It's not just a slow practice area or underperformers. These cuts are really targeted at keeping the bottom line from becoming intolerable to the owners of the business," she said. "When you are talking about this large a volume of people, you are inevitably cutting into people who could be keepers. You can't help but cut some potentially quality lawyers."

The firm most recently lost former Beijing managing partner Sherry Yin to Morrison & Foerster.