The Law Offices of Marshall C. Watson, a Florida-based foreclosure law firm that paid $2 million to settle an attorney general investigation into the firm's operational processes earlier this year, is laying off staff members and hiring new employees for its compliance division. "To streamline our processes and minimize inefficiencies, the firm has had to eliminate temporary and overlapping positions," according to a spokesperson for the firm. "We are, however, adding positions to our compliance department as part of our continuing commitment to providing quality service to our clients." Marshall Watson would not elaborate on how many positions were cut from the firm's payroll. However, sources put the number somewhere around 20 to 30 positions. Earlier this year, the firm agreed to pay $1 million to Florida after the state AG reviewed complaints over the firm's handling of foreclosures that were allegedly filed before legal standing was established. The investigation also looked into the work of process servers, affidavits and other documents issued in foreclosure actions. In addition, the law firm agreed to pay another $1 million to the Florida Bar Foundation to help the group fund its mortgage foreclosure grant program. As part of its deal with the AG, Marshall Watson agreed to ensure the case filed always has the original note or a lost-note affidavit, as well as an original mortgage or a copy of the recorded mortgage and documentation establishing that the loan and mortgage are in default. Write to Kerri Panchuk.