Layoffs from law departments

Tough legal issues surround companies that are having difficulties, which suggests that their inside lawyers might be relatively immune to reductions in force compared to other employees in a company. But layoffs scythe through all groups (See my post of March 1, 2008: Ford’s law department lost 32% of staff.).

Recently, at Home Depot, according to a piece by Katheryn Hayes Tucker on Law.com, Feb. 26, 2008, an estimated 17 people from the law department lost their job. What was the percentage laid off? The article cited one person’s estimate that the company has 80 lawyers. (A directory of corporate counsel for 2005-2006 lists only 16 and the Georgia Bar shows 41 lawyers.) If we assume 80 is about right, and that there were somewhat less than one non-lawyer per lawyer, the department might have had about 150 people. If so, the layoff was in the vicinity of 10 percent.

Three other management points come from the short piece. The first is that the new approach of the department is called “lawyer light” and it “includes cuts in compliance,” so it appears that compliance reports to the general counsel. Second, the CEO of Home Depot is a lawyer (See my posts of May 26, 2007: GCs who become CEO.). Third, or a period of months in 2007 the company had an interim general counsel (See my post of June 5, 2006: designated successors and Sears and Coca-Cola with interim general counsel.).