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The Mean Economy: Even law firms hit hard by recession
Second in a series
MARLTON, N.J. — Terri A. Doring never expected her middle-class life to be threatened by prolonged joblessness. She always had plenty of work, got paid well and had good job prospects during her long career as a legal secretary at well-regarded law firms here.
All that has changed since the Great Recession. As corporations slashed their spending and staffs in the deepest downturn since the 1930s, they left no stone unturned. Once-plum legal jobs and prize contracts got jettisoned along with rank-and-file workers, and many American lawyers, perhaps for the first time, found out what it was like to be without a job.
Ms. Doring lost her job in 2009 along with 52 other people at the Cozen O’Connor law firm in Philadelphia, and she is now on the verge of losing much of what remains of her middle-class life in this suburb outside Philadelphia. Unable to find steady work and scrambling to make mortgage payments, she must either find a tenant or try to sell her town house to prevent a takeover by the bank.
Ms. Doring has taken whatever temporary or freelance legal work is available, while earning a little cash by house-sitting for vacationing neighbors. After 60 unproductive interviews for work in the legal field, she considered a career switch to medicine, but was told by hospital administrators that she would face a substantial cut in salary. Now, she is interviewing for jobs in child care.
A generous severance package and 99 weeks of unemployment benefits carried Ms. Doring through until February 2011. Then she spent sleepless nights before dipping into her retirement funds and cashing in a bond inheritance from her father to make ends meet. She eats only one meal a day to save money. She sold off some jewelry and applied for food stamps, but was turned down because she had not exhausted her retirement savings.
“I am still shocked that I did everything right and find myself on the brink of destitution,” she said. She tears up when she thinks about how quickly her life has unraveled.
“It’s very difficult. It leaves you with emotions — anger, depression, insomnia,” she said. Then a look of anguish comes across her face and she adds, “It’ll kill me if I lose the house.”
After working hundreds of overtime hours over 11 years at the Cozen law firm and honing her skills at the prestigious Pepper Hamilton law firm before that, Ms. Doring didn’t expect to get swept up in a mass layoff.
“I was proud to work there, and I was rewarded with a yearly bonus,” she said. In discussion groups with other middle-class job seekers, she finds that many like her subsist on cereal and eggs and make once-unimaginable economies just to scrape by.
“Every day, it gets scarier. What’s going to happen to all of us?” she asked.
Ms. Doring’s neighborhood is sprinkled with good restaurants and popular bars. Dinner out is no longer an option, and a trip to the nearby Jersey Shore to take her ailing sister on vacation, as she once did, is out of the question. For Ms. Doring, such luxuries have become “a memory from when we were part of the rich working class.”
Older workers shunned
Ms. Doring said she thinks her age makes it more difficult to find a job. She is 57 and finds many doors closed as employers prefer not to take on people who have high salary requirements and possible health concerns. Ms. Doring has not had health insurance for a long time, and recently developed a stress-related rash that had to go untreated.
“I have an excellent career record. It all comes down to age discrimination,” she said, adding that she wishes she lived in “a new country where expertise is valued.”
Other people in her Facebook discussion group agree. During the depths of the recession, they found that corporations of all kinds seemed to pay no heed to the tenure, years of work or knowledge and experience of the people they let go in their haste to cut costs and improve their bottom lines.
“It’s kind of like, ‘Out with the old and in with the new,’” said Margie Osborne, who works part time after losing her full-time job with health and retirement benefits two years ago. She has heard many stories of people older than 55 getting pushed out of their jobs by corporations around the world.
“Early retirement happened to me,” she said. “I will never see a nice retirement now.”
Many in the discussion group said they considered going back to school to secure jobs in different fields. But they also have heard horror stories about people who take out student loans to go back to school and end up with big debts and no jobs.
“I’d go to school, but who can afford the fee to apply?” said Michael Joseph Ormond, who has been out of work for a long time. “I can’t even feed myself. My phone is going to be turned off this week. I can’t even get an interview as a cashier at McDonald’s.”
Jackie Allen said she lost her job taking care of mentally and physically abused children in October 2007 after cutbacks in social programs. Given the hostile political and social environment, she feels few people care about her predicament as a long-term unemployed person or about the children who are going without care.
“Americans have lost their touch with humanity” and have become consumed by “lust for the almighty dollar,” she said.
One laid-off partner from a law firm in California, who asked that his name not be used, said he never expected to lose his job in the most litigation-happy country in the world.
“Typically when the economy goes down, lawsuit filings go up,” he said. “In this economic downturn, that didn’t happen. This recession was different. Lawsuit filings went down.”
He has been scraping by doing small contracts and living off his retirement funds for the past six months. He didn’t attempt to conserve money at first because he expected to find a full-time job quickly, but now he regrets that.
“If had to do it all over again, I would have gone to the bottom line and started living like a church mouse. But you think of yourself as a middle-class person,” he said. Within a few months’ time, “the balloon mortgage payment came due and I lost my house.”
Ms. Doring said she found that her many years of experience are no asset and, in fact, may represent a liability because employers know she wants to be paid more than younger secretaries. Her ending salary at Cozen was $55,000, although she says she would accept much less than that now.
She also has found that her skills are outmoded. Knowing shorthand and taking dictation are lost arts, and no one seems to care anymore that she has an excellent phone manner, can coddle important clients expertly and knows how to spell difficult words and names without resorting to a computer spell check. Employers these days seem to be looking for younger people who are speedy and — even if ill-mannered — know how to use an array of word-processing programs to produce legal documents and letters.
“Somewhere along the line, there was a shift. The skill package is now more important than having somebody the clients like on the phone,” she said, describing herself as a “people person” at a time when “personal assistance is passe.”
Ms. Doring found a position briefly last year working for a lawyer who valued her dictation abilities and typing speed of 85 words per minute. But he was so verbally abusive that she ended up leaving in tears like his previous secretary.
“I’d rather do housekeeping than take that kind of abuse. I felt like a punching bag,” she said. “I was lucky, working at prestigious law firms. I always felt respected.”
Economists from Federal Reserve Chairman Ben S. Bernanke on down have lamented the plight of the long-term unemployed, who represent a record 41 percent of the country’s 12.8 million unemployed workers. Mr. Bernanke worries that six months or more without work will cause people’s skills to atrophy and business contacts to dwindle, making them even more difficult to place in jobs. Ms. Doring, her friends and many others find themselves with outdated skills or feeling too old to take advantage of job openings aimed at those just entering the workforce.
Ingrid Schroeder, an analyst with the Pew Research Center, said older workers hit by permanent layoffs have been especially in danger of falling into long-term unemployment. “Workers aged 55 and older were the least likely to experience unemployment, but among people without jobs, these workers were the most likely to have been jobless for a year or more,” according to a recent Pew survey, she said.
Scarred by joblessness
Part of the reason may have to do with the “scarring” of being out of the job market for a prolonged time, she said. “Some individuals have been out of work long enough to face the risk of depressed wages in the future or a lack of interest from employers that may fear that they have lost some of their skills,” she said.
Gary Burtless, an economist at the Brookings Institution, said that the plight of the long-term unemployed is a concern not only for people who lose jobs but also for society at large.
“Some of those affected eventually exit the workforce, retiring long before their capacity and willingness to work end. Others may find employment, but in jobs that are a poor match for their skills and experience,” he said. “These losses have consequences for the broader economy, shrinking potential output and increasing the burden on costly transfer programs,” including food stamps, Medicaid and Social Security disability insurance.
The longer workers struggle to find jobs, the more they are in danger of slipping out of the middle class for the first time in their lives.
Tony Fitzgerald, a financial adviser, has encountered many jobless people — including former lawyers, corporate executives and business owners — who she says are struggling to maintain their dignity and middle-class lifestyles.
“People are trying to scrape together money any way they can. They are trying to go back to school and learn a new profession or taking small part-time jobs that don’t pay well — anything they can to pay their bills,” she said.
The American middle class was hit like never before by the Great Recession, she said. Millions of people are still reeling and some may never fully recover.
“They’ve been using credit cards to live on. Their mortgages are out of control,” she said. “A lot of people have maxed-out credit cards. They’re just not able to get out from underwater.”
While some people have been able to get by with help from their families and the government, others have had to give up the homes they have owned for decades and place their longtime animal companions in shelters because they no longer can afford to keep them, she said.
“There’s a lot of depression and anxiety going on out there,” often under the radar and out of public sight, she said. “People are very fearful about their futures, whether they can stay in their homes, whether will ever be able to buy a home again.”
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