The slowdown in the Washington economy is starting to hit its law firms.
Several Washington firms have laid off attorneys this week as legal work in areas such as real estate and banking is becoming scarce and the economy is slowing down in general, sources said yesterday.
Law firms tend to lag other businesses in layoffs and, in fact, this area has not yet seen the rash of layoffs that cities such as New York and Boston have experienced, legal experts said. Some firms with strong practices in energy, environmental and bankruptcy law are adding attorneys.
But Melrod, Redman & Gartlan, a District firm of about 50 attorneys, this week laid off four associates, sources at the firm confirmed. The firm's real estate business has declined drastically in recent months because of the downturn in the area's commercial real estate business.
Among Melrod's real estate clients was Prince George's County developer Mark R. Vogel, who recently declared bankruptcy. Vogel owes the firm more than $1 million in legal fees, according to court records.
However, the decline in the firm's real estate business is broader than the Vogel loss, said one source at the firm. The firm's real estate business was heavily concentrated on local deals.
"There is nothing starting now," the attorney said. "Any law firm that does a substantial amount of commercial real estate transactions is hurting."
In addition, the firm recently lost much of its bankruptcy business when a lead partner left to head another District firm's bankruptcy section.
At Washington, Perito & Dubuc, nine associates have been let go, sources confirmed. "We haven't had any layoffs," said managing partner Robert B. Washington Jr. "We let associates go," he said later in the same conversation. "We do it every year."
The 100-member firm is the successor firm to the Washington office of Finley, Kumble, Wagner, Heine, Underberg, Manley, Myerson & Casey -- the 700-member national law firm that filed for bankruptcy two years ago. Members who were with Finley will be billed for their part of the bankruptcy plan later this year. Nationwide, partners will owe $42 million to the estate of the bankrupt firm.
Washington denied that the firm was suffering from any particular debt burden, but noted that law firms are generally tightening their belts.
At the District firm of Brownstein, Zeidman and Schomer, five associates have recently been laid off, sources said. However, Barry Rosenthal, a partner in the firm, said that no one had been told to leave for economic reasons. "People leave law firms all the time," Rosenthal said. "People are told their futures aren't bright." The firm primarily does real estate, franchising and litigation work.