Nice to see someone being up-front and honest about the situation. Tough times, but at least they are doing what they can to make it easier on everyone.

It is commendable that they are being transparent about this matter, however, I feel for the associates that are affected by this matter.

I am actually very impressed with the way they handled this. For a (semi) big firm to actually show an iota of regognition that their employees are human is not something often seen in this industry. I know that if my firm ever found itself in a situation where it didn't want X number of associates, they'd just disconnect our Blackberries, cutoff our network access and have the Security Guards escort us out.

Then again, that's actually what DOES happen at my firm

Sounds to me like a very good way for the firm to address the current economic environment. Certainly seems like the firm is making every effort to address both the needs of the firm as a business and the needs of its employees.

I am actually very impressed with the way they handled this. For a (semi) big firm to actually show an iota of regognition that their employees are human is not something often seen in this industry. I know that if my firm ever found itself in a situation where it didn't want X number of associates, they'd just disconnect our Blackberries, cutoff our network access and have the Security Guards escort us out.

Then again, that's actually what DOES happen at my firm

I think this is about as diplomatic and considerate approach to a difficult situation as a firm could take.

Does anyone have info on what terms are applicable to sabbaticals? If my firm offered a six month sabbatical with no pay but with benefits, I'd take it in a heartbeat.

Very impressive moves by McKee. These people have good values.

SPIN CONTROL!!! Partners could take small pay cut and keep everyone employed... didn't they have highest RPL in industry?!?

Good job McKee! That asshat factory Shearman & Sterling could learn a lesson or two from you.

Kudos to McKee Nelson for being so upfront and not trying to disguise what they're doing.

A sabbatical sounds appealing. I wouldn't mind taking six months off, knowing that I'd have my old job waiting for me on the other end.

I agree that this is commendable ... for now anyway. It will be interesting to see what happens if/when not enough associates go in house, change firms, change practice areas, or go on sabbatical. What will happen then?

Very well done McKee.

If you can afford a six month sabbatical, and your firm asks you take one, and you don't take one, you should be fired for stupidity.

2:08 -

Do you have any reason to believe Shearman & Sterling will be laying anyone off? Sure, they made a major mistake a few years ago when they laid some people off, but I don't think they're stupid enough to make the same mistake twice.

2:11: Nelson's comment seems to indicate a willingness to bring people back once the markets figure out where they're headed. Agreed that there appears to be uncertainty about what might happen if not enough people make changes. Even so, this seems less like a push out the door and more like a temporary redeployment of assets, with an open invitation to return.

Maybe this is why McKee got #1 on Vault's QOL rankings this year--honesty and a human touch.

Not to be negative, but it seems to me that the tipster's account of the first-year who was asked to leave doesn't really jive with the official story.

Unless the first year was planning to leave anyway (in which case the tipster should have said so), that sounds like a layoff.

1. Great approach the firm is taking in terms of transparency

2. WHO THE HELL WOULD LEAVE?!?!?! - as long as they arent kicking you out the door that just means market pay + "industry bonus" without the work.

seems like a no brainer to me

I respect the way McKee is handling this, the way ATL is handling the story, and the tone of the comments in this section.

Good marks all around. Even Justin Timberlake agrees.

for those in this area, now is a GOOD time to start saving.

Where exactly will these people go? Is anyone hiring structured finance types right now?

I'll bet mid-levels w/o families to support are jumping all over the sabbaticals, though.

Honesty triumphs at a law firm, who wouldathunkit. Although I would not be happy being an associate asked to personally reconfigure my career, it beats a bogus review. Thanks for taking the high road McKee.

And market bonus for people who don't make hours is ____?

I mean, I guess if you billed 1700 hours then your bonus was getting to leave the office, which after what these guys probably billed in 2006 (best year ever for what they do) is priceless, but I'm just saying.

Lat, you should do a post on sabbaticals offered by firms. I, for one, don't know of a firm that offers them (apart from McKee), but surely there must be other firms out there that do. I would be interested to know, for example, what the minimum period of service would be for a firm to offer you one (e.g. after 5 years at a firm you can take 6 months off), do you have to do something related to the law when you take a sabbatical or can you just go on a very long vacation, how long are they generally offered for etc etc.

Good move by McKee. Everyone knows that there will be some shakedowns among any firm/practice group hit by the credit crunch. It's nice to see some honesty, as opposed to mass layoffs and press releases saying those associates "couldn't hack it".

bravo.

New list of shame - firms that are less McKee and more Latham.

Lat,

thank you for confirming what I have known since Griswold; penumbra IS latin for "we're making this shit up as we go."

Honey, don’t be upset. I wasn’t “laid off”, I just had my venue changed. To the unemployment office.

1:58 -- where do you work?

Very nicely done McKee!

ROLLIN' CASH 5!!!!!

Wow, after reading this, I would be strongly inclined to work for McKee when their work picks up. They really have adopted a very honest and refreshing attitude to the harsh realtities of today's world. A+...

"A special request: please go easy on McKee Nelson in the comments."

"I respect the way McKee is handling this, the way ATL is handling the story, and the tone of the comments in this section.
Good marks all around. Even Justin Timberlake agrees."

New List of Shame: Wusses who like being respectful and civil.

as my lacrosse coach used to say, "grab your sack and hit somebody"

lacrosse is for wusses.

"Change of venue"??? - Hey suckers, these are (very nicely phrased) layoffs plain and simple. Doesn't sound like that first year was "considering a change of venue" when s/he was effectively shitcanned. Don't paint this as some sort of cutting edge generosity. The only difference between this and layoffs by big firms who don't give a rat's ass about associates is the way it is phrased. I'd love to have been a fly on the wall for the wordsmithing committee that generated Nelson's statement. You're a fool if you don't think this is a shove out the door - it obviously is.

Gallion OUT!

I'm pretty sure CWT does offer sabbaticals, although I don't know exactly how it works...
I think after 5 years you get a month or two paid time off... someone that works there want to offer some info?

LOL@"change of venue."

I will give credit where credit is due for the firm having the balls to actually address the issue publically.

I heard the situation with the mentioned first year is not true and was merely a misunderstanding.

Here is an earlier post about sabbatical policies:

http://www.abovethelaw.com/2007/08/biglaw_perk_watch_sabbaticals_1.php

Not to disagree with all the "We [heart] McKee" comments but I think they are probably more smart than nice, or at best nice because it's smart.

They probably figure they'll be rolling in cash again in six months, it's a pain in the ass to train people to do this stuff, anyone more than a year in costs between 200 and 500 to replace, and it would kill recruiting for years (and McKee is a well-respected firm but not a firm that people are currently tripping over themselves to get into).

If you start firing, everyone who can (i.e., the people who are most valuable) are walking.

Machiavelli says there are two options - (i) lay off people, do it once, make sure everyone knows it's a one-time thing or (ii) announce as loudly as possible that you are not and will not.

Letting people suffer thinking they might be laid off is the worst. Smart people leave and you take the cost of keeping the deadwood anyway.

Given that they are taking the hit (paying people in bad times) they are right to issue a press release, in effect. It does tie their hands a bit, but it's a smart move.

Yes, kudos to McKee for handling this difficult situation so well - but it's still a layoff.

"[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."

Not inconsistent with the firm's claim. Since there's "no timeline," this person can stick around indefinitely. They've just been told that they don't have a long-term future at the firm (which happens even in the best of times).

2:20, someone who actually wants to gain useful skills and experience will not want to be sitting around all day reading ATL when s/he could be out taking depositions or heading up loan negotiations.

3:11, probably a big part of it is good business sense, yes. But, with the experience I have had at my firm, I'll take "nice because we have to" over "asshole because I can" any day of the week. Similarly, my firm would NEVER help me find a job elsewhere, unless it was in-house with someone they want, but currently don't have, as a client. Moving to another law firm? I've known partners to trash-talk those people behind their backs after they have left.

You can tell Lat is being nice by the absence of a snarky re-wording of the firm logo.

Very good points, 3:11 (1). Lateral recruitment is extremely costly and difficult for firms. Recruiting laterals with the right skill-set is even more difficult. There's only so many CWT, Thacher, Sidley, Skadden, etc. structured finance associates; how many would move to McKee if the firm's reputation was tainted by lay-offs? I'm sure they sat down, ran the numbers and concluded they'd save more in the long run by eating the short term loss. Then, partners being partners (PEP numbers are sacred!), they decided to take steps to mitigate that short term loss - e.g., encouraging associates to leave.

3:13, I'm pretty sure that "no timeline" means "no timeline yet." That first year better be circulating a resume.

3:22

Guess your just as lazy a bastard as I am seeing as you are, how did you put it, "reading ATL when [you] could be out taking depositions or heading up loan negotiations"

Stop pretending people WANT to work

People work to make $ Dont tell me you would bill 2500 hours for "experience". If i can work less and make the same $...im in...and you are too

I agree in commending McKee for their honesty but where exactly are these people going to go? ALL the structured finance groups are slow regardless of the firm and most of the in-house attorneys right now are shitting bricks about losing their own jobs. Short term outlook does not appear so rosy. Might be a nice time to finally learn the alpenhorn, write the great American pornographic novel, or perhaps encite a bloody coup in a small developing nation.

wtf? nice? maybe at the moment, but if people don't start jumping ship and/or the work picks up, the pressure will intensify and the associates will get axed to save PPP. when i interviewed at mckee - NY - it seemed that at least 60-70% of the associates were in structured finance, i don't see how they can keep all of those people busy in their other small groups, obviously they are hoping people find new jobs quickly.

agreed w/ 3:43. when i was there the attorneys went out of their way to say that the market problems were a predictable and short term hiccup. now they are encouraging people to change venue? nice or not, how could this not give pause to someone considering an offer to work in structured finance?

"change of venue?"

What's next, 2 + 2 = 5?

It seems to me that they're handling this better than we've seen firms do in the past. Hopefully there are enough associates who were looking toward the door anyway that nothing harsher will be required.
I doubt this hurts them going forward. If anything it improves my impression of the firm.

The difference between McKee's approach and a lay off is that we (yes, I am an associate at McKee) will continue having jobs until we find something else. The fact this took a few days to hit ATL is a sign, I think, that none of us wants our firm (or former firm, as the case may be) to take a beating from commenters.

I don't necessarily feel a need to be nice to a law firm because they've responded to ATL (which they SHOULD do in anyway, if they have a PR department with half a brain, they would know that it is often best to control the rumors and spin with a response).

But, I'm not going to bash on McKee Nelson because (1) not having work due to a market slowdown isn't a moral failing on their part; (2) if there isn't work, they are taking a reasonable and kind approach vis-a-vis their associates (i.e., not unreasonable to tell someone that they don't have a job in structured finance but they can work in litigation); and (3) they are a relatively small firm which means that these slowdowns and the drain of salaries, overhead costs, etc, are going to be more pressing than say at Latham and Watkins which would have a better ability to spread structured finance associates out amongst its offices and practice groups.

The curious thing is that mckee is still making offers in other departments, such as litigation. i'm probably heading there next year...

4:23: It's not curious at all. I'm in a non-structured group at McKee, and it's going gangbusters here. Will Nelson's comment that our current structured associates' options "include moving into other areas of our practice where we have significant need for additional lawyers" is a testament to that. Here's hoping we see you soon.

4:32: you believe that other groups can take on 100% the displaced structured associates?

I don't have insight into what kind of additional headcount management has in mind. All I intend to convey is that the other groups are in need of additional lawyers.

2:20, there's a difference between having a productive day and taking a break to read a blog and spending your whole day with nothing to do. I have been in both situations and the former is decidedly more rewarding.

I would never willingly work 2500 hours. But at the same time, I don't want to be sitting on my ass billing 1200. No one "likes" working, but non-lazy people also don't like doing *nothing*. And since I've made my choice of careers, I would prefer to do things that will help me enhance that career, than sit around doing nothing.

I think firms that are willing to move good associates around to new practice groups (even where it means that they will have to retrain those associates) deserve props. That form of job security -- if an associate works hard, the firm will be loyal in return -- is worth a lot. In 2001 when everyone was busy laying associates off, I remember that MoFo took great pains to try to keep people around, offering corporate associates spots in litigation when corporate associates elsewhere were being laid off, etc. I know that some corporate associates weren' t happy about being placed in litigation, but at least they still had their jobs (and, if they really wanted a corporate job, they could try to look elsewhere in the rapidly shrinking market).

anyone know anything about what has been going on in the structured finance practice at cadwalader? are associates being moved into other areas? are summers and new associates being placed in other areas?

Let me by the first poster not to comend McKee. While their actions compared to most firms appear to be a tad more humane, the partners deserve the blame for structuring the firm in such a way that it was so reliant on one practice area, and albeit one that is cyclical and highly subject to market fluctuations (much more so than say litigation).

Yet, not a single partner is being dismissed. The firm waits until now to release this bit of bad news. What about the summers who accepted their offers under the false assumption that would be placed in structured finance. Surely, the firm had reason to know that there was a problem with sub-prime loans during the summer. Moreover, how many people think the firm won't start laying off associates if they have trouble placing them with clients, which unfortunately given the state of structure finance is a realistic possibility.

McKee did better than most firms in a similar situation but they could have done better.

I cannot even COUNT the number of structured finance resumes I have seen from CWT and Thacher Profitt....

And even we're being nice, how could Lat pass up the chance to mess with the logo?

"This is where business is going . . . out the door."

Sucks to be up for partner this year.

Cheers for being straight forward with your associates!

Jeers for not sticking with them through thick and thin!

what's curious is that mckee is still hiring law students for other departments like litigation.

what's curious is that mckee is still hiring law students for other departments like litigation.

what's curious is that mckee is still hiring law students for other departments like litigation.

Any word on the fall-out in Charlotte where many (if not all) of the BigLaw firms from NY/CHI/Philly/DC focus exclusively on structured finance?

2:04, I hear the partners WILL be taking a significant pay cut. So much for being the richest guys in town.

To 7:56pm:

I was a trader at a structured finance hedge fund, and it was just like musical chairs--everyone knew the party was going to stop (and there were clear signs that paper quality was deteriorating, and the daily axes were full of crap secondary paper from second-tier structured finance firm (hi ML!). So really, everyone was just hoping to keep the game going until the music stopped for real.

If the summers were too dumb to read the Wall Street Journal, or say, the BusinessWeek cover story of 2005 entitled "Map of Misery" which was all about WHEN the structured finance (MBS/CDO) fallout was going to happen, not IF, then the summers deserve it. I'm sorry--anyone who worked in anything remotely connected to credit, capital markets, investment management, M&A or derivatives could see the signs a million miles away.

On a slightly related note, having been subject to a really awful layoff policy at an investment bank during the post-2001 downturn, (imagine round after round after round, interspersed with denials of layoffs, and then finally being escorted out by security alphabetically by floor--NOT FUN), this is the best way to handle a truly awful situation.

Yes, the firm ought not to have put all of their eggs in one basket, but....it's too late for that now, and they are doing the best they can to do right by their employees. I join others in saying that how McKee handled this actually raises them in my esteem.

The partners are handling this market slowdown with dignity and respect. I think it says a lot about the partners that they are willing to absorb the financial fallout necessary to avoid laying off their associates.

10:47 - No one cares about Charlotte.

Realistically, this probably isn't so bad for the young lawyers. I have a few friends who are junior associates at McKee, and they don't really give a shit about structured finance, they just took the job because it's a job. I get the impression that a lot of people feel the same way, and might even appreciate a change in the drudgery. The worst part of the whole thing might be the prospect of working for a different firm or for a bank, because I'm sure the vast majority do not offer the same perks and job comfort of McKee.

As for the more senior level associates and counsels and partners-- they obviously knew what they were getting into when they chose this career path.

11:24 - where'd u hear that? i thought mckee was an "eat what you kill" shop, where everyone got paid what they were worth, so i would think only the structured finance guys would be taking a hit if the other areas are going "gangbusters" as 4:23 says.

I definitely agree with the "go easy on McKee" crowd.

I lateraled into NYC from another market recently, and had my final choice narrowed down to offers from McKee and a V15 firm for lit. While I chose the V15 firm (because I did not have Biglaw experience under my belt, and believed it to be indispensable in this city) over McKee, I found McKee to be the only firm that has an ingrained culture of caring about its associates. The business lit group (headed by Steve Brody) has gone through two different firms before joining McKee, and each time they made it a condition of the acquisition to bring every willing associate along. Sure, this was a bit of a spin piece, but that doesn't mean that the firm won't go an extra mile for its associates.

Once again TTTs get crapped on. I won't even make that much when I graduate and work in some ID hellhole, and I'll have to actually show up 5 days a week.

Sabbaticals to 64k (plus bonus) NOW!!!!

[I would take that deal in a heartbeat.]

I have a nearly-one-year-old, and I'd takte that partially paid sabbatical + full bonus. Figure in the daycare bills I'd be saving, and it would be a great way to improve the world by staying home with the baby! I'd be all over it!

I don't necessarily approve of how cwt and a number of firms similarly positioned to cwt are keeping their new hiring of associates at a steady pace. Adjustments to their current associates positions are currently underway there as they are at many firms. high levels of new hiring will only make the necessary adjustments for people currently working there more difficult in the future.

This hiring choice must be a deliberate business decision to focus on market signaling. You can't signal weakness, lest the markets' smell the weakness and pounce upon it, thereby aggravating the condition. And if CWT reduces it's hiring before other firms then ( in classic game theory fashion) it will suffer relatively drastic reductions in its ability to recruit from the top tier schools.

Underlying business weakness is already apparent at firms that have specialized in capital markets work. Keeping record levels of new associate hiring at a steady clip won't fool anyone. Now is not the part of the business cycle where businesses should be worried about recruiting top 'new' talent. Cwt and others would be well advised to worry less about recruiting top talent than retaining it. This would also be better for moral. I think honesty is generally good for moral.

On the plus side, If cwt has proven anything by its track record and managerial talent, it's that it's better positioned to deal with change than other lawfirms. Allowing some associates to take severance packages, and perhaps retracting a few new hire offers is a decent way to save money in the short run. but in the long run, you must bring in business to make money, saving money alone won't do with an eroding client base. I trust cwt will once again figure out it's next strategy for courting legal work better than most other lawfirms.

Consider the example of its recent expansion of its bankruptcy department ahead of the pack of firms. Just about everyother lawfirm is immitating cwt when it now has become patently obvious that bankruptcy partners are now entering 7 years of plenty. Rest assured, CWT knows how to turn legal services into earnings. Meanwhile we can only hope all lawfirms deal as best as we can hope for with the upcoming transitional period. ....it's only business, it's not personal.