Yes, people do. How common layoffs are, however, is difficult to state with certainty because (i) firms prefer to not comment on reasons for the termination of the engagement barring in cases of extreme performance or character lapses, and (ii) attorneys prefer to represent that they resigned voluntarily and lateraled out, to save face (and many firm HRs counsel attorneys being let go to specifically frame it this way on email, etc., for this reason). Anecdotally speaking, even accounting for the lack of candor among people having been laid off, layoffs are neither routine nor very commonplace.

However, they do occur. At the junior level, the usual reason is non-performance, which can include lack of sufficient availability on several occasions (e.g., if Associate X is constantly turning down work, not billing enough, being unavailable beyond usual office hours (which like it or not, comes with territory)), shoddy work (weak or insufficiently rigorous legal analysis on advisory mandates or litigation -- the extreme example of which includes misapplying statutes, using obsolete statutes, overlooking major precedents, etc., as well as the more garden variety lack of attention to detail, sloppy writing (bad English, incorrect grammar, syntax) -- by reference to class-year linked benchmarks. Senior lawyers typically expect juniors to learn on the job, consistent with lawyering being an apprenticeship-based profession, and the inability and/or unwillingness to learn (particularly, learn from one's mistakes) over and over, can cause performance issues. Repeating the same mistakes is the textbook example of a performance issue that warrants eventual firing. The less common reason is lack of personality fit (e.g., lack of polish, demonstrated and repeated inability or unwillingness to play well with colleagues - both senior and junior). Sometimes, it could also simply be a function of there not being enough work to justify keeping someone on, though firms tend to be a lot more loathe to layoff attorneys for temporary economic reasons.

As a senior, the rope becomes much smaller. And business case can become a stronger basis for layoffs. Without knowing which year you are, and the kind of firm you work in (I can only speak to the so-called Tier 1 firms, having worked in two of them, but understand that recruitment and termination modalities materially vary), it is difficult to state any more conclusively.