Layoffs Offer Few Silver Linings

Times of High Anxiety Lessened by Outplacement
Counseling and Career Review

By: Peter M. Newton

It`s a tough decision for firm owners and managers. But it`s a decision that will become more common if the economy continues to decline: layoffs.

Despite long-term economic studies, which show that downsizing does not save money in the long run, firm CEOs are under great pressure to lay off employees at the first sign of revenue trouble - this means even longtime partners may need to leave the firm.

The stereotype of the CEO depicts a rational bottom-liner unencumbered by much fellow feeling. In reality, few executives lay off employees comfortably. Many dread the prospect. In fact, I have interviewed some who remain distressed many years later. Occasionally, a CEO`s good feeling about his job never fully returns, and the event becomes a turning point in his own life as well as in the lives of the people he has let go. In a few cases, the executive suffers from a post-traumatic stress disorder, including the intrusive return of memories of termination interviews with a devastated employee.

Some employees are badly hurt by being caught in a downsizing. Not only is their company diminished, they feel their own value as human beings is diminished. They feel "downsized" as persons and few of us take that well.

In a society that tends to regard financial difficulty as a moral failing and wealth as a sign of virtue, it is likely that the employee has internalized these beliefs and will blame himself for his misfortune. For some, a psychological choice between depression and anger is posed, and studies show that domestic violence is related to job stress, especially demotion or termination. In a predisposed individual, the reaction to job loss can be floridly psychopathological.

Healthier people react to being laid off with depression rather that paranoid retaliation. The depressed are healthier in the sense that they internalize the problem and try to work it out, rather than yielding to the temptation to blame others and attack them. Nonetheless the depressive approach of exaggerating one`s own failure involves needless suffering and can lead to its own dangerous extremes, such as excessive drinking, dangerous driving and suicide.

Layoffs Force Introspection
The challenge both for the newly jobless individual and for former employers offering help is to understand the employment termination not as an ending, but as a beginning, one which initiates a transitional period in the person`s life. This transitional period must be used to chart new and better directions.

Consider the following disguised but real case. It is an example of a depressive reaction. Alan was a 50-year-old partner of a midsize, full-service firm. His practice area was insurance defense, an area that his firm had been de-emphasizing for several years because of billing rate pressures from clients. When the economy slowed and showed alarming signs of a serious downturn, his firm asked him and some other in his practice group to leave. In a sense, this had been as inevitable as the business cycle, yet Alan had wanted to believe that his partners wouldn`t do this to him. And so the news came to him as a painful surprise.

As part of Alan`s termination from the firm, the managing partner offered him outplacement counseling, which he accepted. When I met with Alan, he was depressed, angry and lost. He felt hurt by his colleagues but mainly critical of himself. He said that he saw himself as having failed at what had been the most important thing to him. He compared himself to others in the firm and came out the loser, left witless, without what had mattered most. He spoke of waking up in the night near panic, when he realized that he would soon have no office to go to, no clients to serve. He asked himself how, if by 50, he had failed to create a successful work life, he would ever do so? He described days in which he felt like a miserable failure, asking himself over and over, "How did I get into such a mess?"

During several interviews, we traced Alan`s career backward in time. He shared that it had been some years since he had really enjoyed his work. Somehow he had ended up doing more work for the clients he enjoyed least and less work with the ones he liked best. Although he had kept his billable hours up, the erosion in his profitability year by year had been eroding his own sense of value.

His work, he now realized, had become so commodified that he had been feeling less like a professional than a clerk. What he had lost in the termination, it now became clear, was not important work but the feeling of importance that came from being a well-paid partner in a good firm. The rewards for his work had become increasingly extrinsic and its connection to his self more and more distant. He could now see that his termination from his firm constituted - not a sudden departure-a landmark on a trail that had been going downhill for several years.

Often in cases like this, there is a path not taken. One finds it by asking, "What would you have done, if you had not gone to law school?"

At first, Alan had trouble thinking about the question and answered it in the way many lawyers do: "When I graduated from college, I didn`t know what I wanted to do, so I went to law school." Encouraged to think about the matter more deeply, Alan recalled that in his late teens and early 20s he had had a nascent dream of going to sea, which his father had done as a career navel officer. His parents discouraged this: They wanted a more lucrative employment for their oldest son. During his 30-year career, Alan had relegated his dream to the status of a sailing hobby that he and his wife enjoyed. Indeed, they had hoped someday to retire to a life of cruising in Mexico, where the weather is warm and living cheap.

Upon being terminated from his firm, Alan`s inclination was to go straight to a recruiter. Now, he had second thoughts. He realized he did not want to get a job doing exactly what he had been doing, and that he needed more time to find a better path. He was not ready to make a choice that might lock him in for the remainder of his working life.

Instead, Alan and his wife decided to take a sabbatical and allow themselves time to consider next steps in a more leisurely manner. Why not, Alan asked: the children were grown, educated, and living independently? The couple`s mortgage was small, yet the home could be rented out-to young professionals, both law firm associates, as it would turn out-at a substantial price. The difference between mortgage and rent would cover outfitting their sloop to make it more seaworthy and comfortable and cover the living costs of as much as a year cruising the coasts of Baja California and mainland Mexico.

Layoffs Drive Assessment and Career Shifts
Not every outplacement counseling ends idyllically. Most results are more prosaic, at least as viewed from the outside. Consider the case of Richard. It is an example of a more paranoid reaction.

A civil litigator, Richard had been with the same firm since law school. He was now 55 and over the years had served the firm in various ways: as a mentor to young lawyers, two stints as managing partner, and as a reliable rainmaker.

The firm operated on a consensus model. This meant that when a strong leader had been in power, like Richard, some direction occurred. The managing partner who followed Richard had little inclination to lead and the partnership napped its way into over reliance on a few large clients. Richard observed his successor`s failure and predicted the firm`s increasing vulnerability. He made indications to important partners that he was ready to serve again, if asked, but his overtures were not returned.

Unexpectedly, one of the firm`s major clients announced it was leaving the state. This woke up firm owners and led to realization that they needed to run it like a business. Richard was not named managing partner. Instead, the firm recruited a lateral partner with an MBA.

Richard quickly found himself at odds over management style and philosophy with the new managing partner. Before long, the partnership became divided and immobilized with conflict. Unable to resolve their differences and create a reasonable working relationship, the managing partner, with executive committee approval, asked Richard to leave. As part of the severance offer, Richard was given outplacement counseling.

When I saw him, he was nearly speechless with outrage.

"After all I`ve done for the firm, this little pip-squeak comes along and orders me out. And the partners go along with it!" He bitterly claimed that partners who were supposedly friends were paying him back for "tough decisions" he had made for the good of the firm. Richard spoke bitterly of a rival rainmaker in another practice group who he imagined was behind the move. It seemed to Richard that his man had hated him ever since he`d blocked his "girlfriend`s" promotion to partnership. Richard vowed to get back at the firm by going to the legal press and airing dirty laundry about a botched case, and drive their biggest clients away. He swore that he would not allow his old "friends" and sleazy leaders to betray and attack him and get away with it.

After Richard cooled down, we began a career review. What we found was that Richard had not been happy or comfortable in the firm since he had stepped down for the last time as managing partner five years earlier. Though he had remained influential, he did not really like being out of power, and he did not like, nor value, the skills needed to be effective behind the scenes. He liked having power legitimately and being able to exercise it openly. The more subtle style of subsequent MPs in the firm, especially the new business school types, had made him uneasy and suspicious. He found them viscous and untrustworthy.

Indeed, Richard had always enjoyed running things. He had been student body president in college and a leader in law school. He had been active in the state bar association and had held elective office in the community in which he and his wife lived.

He began to understand that his conflict with the new MP was not primarily philosophical or personal: A new generation of leadership, men and women in their 40s, was taking over the firm and people in their mid- to late 50s and early 60s were finding themselves set aside. He had thought he had stepped aside gracefully when he had left the MP position. Now he began to recall occasion after occasion when he had opposed and obstructed - always for the best reasons, only on the merits - new leadership over the past five years and that this had finally come to a head. Richard had either to give up his interest in power and truly step aside or leave.

Richard had long imagined opening his own firm and running it the way he wanted. He had been kept from doing so by his attachment to this old firm and by the gratification of his own importance within it. He admitted that he had also been afraid that he might fail. Clearer about what he wanted and no longer wasting energy in angry fantasies of revenge, Richard now decided to open a real estate litigation boutique with some other young lawyers from his own practice group. They found suitable space, signed a lease agreement and began to set up shop.

In the end, Richard felt relieved that he had restrained himself from acts of revenge against his old firm. The firm meant a great deal to him and to hurt it would have been to hurt himself. Public controversy might also have soiled the new firm he was starting. Instead, he was content with the civilized satisfaction of stealing two great associates, one superb paralegal and the future prospect of defeating his old partners in court.

Outplacement Counseling
Because the best result of outplacement counseling is not always knowable at the beginning, precipitous decisions need to be avoided. Psychologically wiser choices ordinarily require several in-depth interviews. A person may need to go in house, on his or her own, choose to practice a similar kind of law in a similar firm, make a radical departure in kind and setting of practice, take up another line of work.

What matters most is that the lawyer engages in a genuine reappraisal of his or her work life and of his or her own real self, considers alternatives, and makes an examined choice. The future is always uncertain, but taking one`s inner self seriously and acting with courage restores and sustains pride.

Asked to identify the capacities that would characterize a healthy person, Freud answered "lieben und arbeiten," the ability to love and to work. Freud meant to love and to work in a truly engaged, not timid, obligatory way. Done with psychological skill and sophistication, outplacement counseling should lead to a decision that better connects self and work, mobilizes the attorney`s creative energy, and adds zest to living.

Dr. Peter Newton can be reached at (510) 521-3848 or at

Reprinted with permission from Legal Management, November/December 2001 (Volume 20, Number 6), published by the Association of Legal Administrators, Vernon Hills, IL; Web: