Reed Smith is letting go of lawyers and staff in a move it is putting down to a “reduced level of demand for legal services across the industry”. 

Announced internally last Friday (9 June), the top 30 US firm said the cuts represent a “less than 2%” reduction of its workforce, with around 30 lawyers and 20 staff being let go, according to Law.com.

News of the cuts comes hard on the heels of a decision by Orrick Herrington & Sutcliffe to cut around 6% of its global workforce. The two US firms are the latest of a growing roster to cut lawyers since the end of last year in response to a sudden slump in deal activity preceded by an unprecedented boom in work, especially in the tech sector. 

“These decisions are in response to a reduced level of demand for legal services across the industry,” Reed Smith said in a statement, adding that they are “in line with the continual goal of best positioning our firm to meet its commitment to excellent client service while prudently managing our business”.

The firm said it would provide laid-off employees with severance benefits and outplacement services. 

The Pittsburgh-based firm has a substantial international network, including a large London office, thanks largely to the legacy of its merger with UK firm Richards Butler. However, it declined to comment about which offices and practice areas would be affected by the cuts.

Nick Robbins, founder and director of London-based legal recruiters Nicholas Scott, said Reed Smith had a good reputation in London during the 2008 financial crisis for looking after its partners and associates.

He added: “I think it’s likely that other law firms will lay off staff in the near future. They aren’t a reflection of the state of the affected firms but rather their profitability in certain areas – the war for junior talent is ongoing in niche areas like funds, cybersecurity, regulatory and risk management, so it’s more likely general corporate associates that have been affected by the cuts.

“The demand for senior associates with eight-to-nine years PQE is very high at the moment, but there is a feeling amongst some partners that associates with five-to-six years PQE have a level of qualification, and pay, that doesn’t match their experience.”

Tech-focused West Coast firm Cooley became the first prominent law firm to announce large-scale cuts last December, when it said it would axe 150 US employees including almost 80 attorneys. 

Then, in January, Goodwin Procter said “approximately 5%” of its “timekeeper” and operations personnel had been affected.

Other firms known to have cut staff include Dechert, Shearman & Sterling, Davis Wright Tremaine, Stroock & Stroock & Lavan, Gunderson Dettmer and Kirkland & Ellis, although Kirkland characterised its letting go of associates as “performance-based decisions” resulting from its attorney review process rather than layoffs.