Lay offs of corporate counsel when companies merge (Oracle hard on PeopleSoft)

The National Law Journal (May 9, 2005 at 15) reported that when Oracle completed its acquisition of PeopleSoft, “almost all of PeopleSoft’s 50-lawyer legal department” was laid off. I also heard that when Allied-Signal bought Honeywell, senior management told the merged company’s General counsel (Peter Kriendler) that the combined department’s budget would be the amount spent by the department that had spent more – significant layoffs must have followed. Two aerospace acquisitions I know of shrank the acquired law departments from 69 lawyers to 33, a bit more than a fifty percent reduction.

Other mergers cut less deeply. When El Paso Energy acquired Coastal, I recall the layoffs were less than a third of Coastal’s lawyers. The hard facts are that being acquired is likely to put most of the target company’s lawyers at risk.