As noted recently in The American Lawyer, the credit market crisis isn’t good news for firms with big securitization / structured finance practices. We previously discussed the topic here.
One firm mentioned in Ben Hallman and Aruna Viswanatha’s AmLaw article was McKee Nelson. Hallman and Viswanatha wrote: “[S]maller niche firms are more vulnerable [to credit market problems]. About half of McKee Nelson’s 200 lawyers, and almost forty percent of Thacher Proffitt & Wood’s 350 attorneys, work in structured finance.”
Today we received this tip about McKee Nelson:
Name partners Bill McKee and Will Nelson had a meeting with all associates and counsel on Monday afternoon. While the mantra “we are not going to have any layoffs” was repeated over and over, lawyers were encouraged to take sabbaticals, consider changing practice groups to tax or litigation, or “self-identify” to take a “change of venue” to another firm or field. They announced that each associate and counsel would meet individually with hiring partners in New York and DC.
At one such meeting, held yesterday, a first-year was told that, while there was no timeline required, the firm would help the associate find another job and was given the name and web address of a recommended recruiter to work with.
Sounds like a layoff to me! Oddly, despite encouraging these “changes of venue” the firm still intends to follow industry standard for bonuses for this year (whatever that means).
We reached out to the firm for comment. Founding partner William Nelson responded promptly to our inquiry:
The difference between a layoff and what we are doing is that no one is losing their job. As a result of the fundamental disruption in the credit markets, we do not have enough work to keep all of our structured finance lawyers fully busy. We want to keep these lawyers productively engaged while the market sorts itself out.
To do that, we have given people options that include moving into other areas of our practice where we have significant need for additional lawyers, possible secondment to clients, or taking sabbaticals (which many associates have requested in the past). In addition, we asked any lawyers who already are planning a near-term career change or change of venue (meaning moving to a different firm or in-house) to please let us know and we would help them make that move.
We thank Mr. Nelson for his response. While the credit slowdown and its consequences for law firms are certainly regrettable, McKee Nelson is taking reasonable and sensible steps to address a difficult situation. Nobody is being forced to leave the firm; people are just being encouraged to consider all their options.
A special request: please go easy on McKee Nelson in the comments. The firm should be commended for (1) its openness and transparency with respect to its current situation, and (2) responding to us so promptly and in such detail. We would like firms to feel “incentivized” to come forward with such information and to cooperate with ATL’s inquiries. Thanks.
P.S. Please note that our filing of this post under the Layoffs category should not be construed as a statement that layoffs are taking place. We use this tag rather liberally, applying it to any post that arguably falls within the penumbra of layoff talk (which may or may not be founded).
Earlier: More Woe Ahead for Private Equity and Mortgage-Backed Securities Lawyers?