A Marketer's Take on the Mayer Brown Layoffs
What's the marketing impact of Mayer Brown's elimination of 45 partnerships? Why not ask than longtime MBRM Marketing Director Jonathan Asperger, a veteran of seven years at the 1,500 lawyer firm?
(Note: Mayer Brown has been Jon's client and will be in the future, but he has no current engagement.)
The firm had too many partners -- roughly one per 1.7 associates. "Relative to the firms with which it competes on a national and global basis, Mayer Brown was underleveraged. Some of these firms have 4, 5 or 6 associates per partner," he said, "and leverage has a big impact on profits per partner calculations."
Now a business development coach and captain of Asperger Partners LLC, of LaGrange, IL, Jonathan thinks Mayer Brown's clients will be sympathetic. "An enlightened corporation will say 'we face the same market pressures. If you feel this will enhance your ability to attract and hold top talent, do what you need to do.'"
The layoffs keep the survivors loyal. The remaining partners will be sharing the pie with fewer people, thereby giving them the equivalent of a 10% pay raise. "That assumes the departures have no significant effect on revenues, which is a fair assumption. This isn't a firm in trouble. It's a firm whose profitability keeps growing, but at slower rate than some of the firms with whom they compete," Jon said.
He was not surprised by the layoffs. "The partner-for-life arrangement has become anachronistic. Most lateral moves are initiated by the departing partner, but it's a two-way street - if lawyers can pick up and go to other firms, firms should be free to tweak their partnership ranks," he said.
Were so many layoffs at once necessary? "They could have stretched it out over a year or two, but by doing it in one, fell swoop they bump up their PPP immediately while creating less uncertainly for those who remain. It says, 'we've raised the standards of partnership here - and you make the grade.' It's not unlike former GE Chairman Jack Welch's practice of firing the bottom 10% of his managers each year. Some of Mayer Brown's remaining partners may find it disconcerting, some may find it motivational.
In fact, the layoffs could be good for recruiting. "While the security of a Mayer Brown partnership may have slipped, the value of the partnership just went up. That makes it more enticing to laterals and, arguably, more attractive to recruits. Lawyers and law school students do look at PPP as a measure of firm prestige," he said.
Were the layoffs based on greed? "It's easy to say 'you're making $1 million year, isn't that enough?' But many of the top lawyers in the world, at Mayer Brown and elsewhere, make far more than $1 million a year. What drives them isn't so much greed as it is ambition. They want to be the best."
