Don’t believe everything you read in these pages. If a gossip site isn’t flat-out wrong a sizable percentage of the time, it’s not sufficiently gossipy.
But we were right about something being afoot at Dechert LLP. This morning we wrote:
We’ve been hearing vague rumblings of something about to go down over at Dechert LLP. Said rumblings are reminiscent of what we heard in the days and hours leading up to Cadwalader’s Thursday Morning Massacre….
We hear that certain groups at Dechert are super-slow, and morale in some quarters is super-low. These are, of course, often harbingers of lawyer layoffs.
Now we learn this, from Gina Passarella in the Legal Intelligencer:
The slowing economy has hit home at Dechert which has just let go 13 associates strictly in its finance and real estate practice, according to a source inside the firm….
Dechert has given the 13 associates, who have worked in Dechert offices throughout the United States, until the close of business Tuesday to leave. No one was asked to leave Friday, the source said….
There were no additional layoffs prior to today, but some attorneys were shifted into other practice areas, the firm source said. The layoffs comprise less than 10 percent of the 167 attorneys listed in Dechert’s finance and real estate practice, which includes mortgage finance, structured finance and securitization, investment, and mergers and acquisitions.
The attorneys who are leaving were offered three months severance, six months of paid medical benefits and transition placement support, the source said.
Three months seems to be “market” in terms of severance. There was some fear that laid-off Dechert associates were going to get less.
ATL gets a shout-out in the piece:
Legal blog Above The Law has reported extensively on associate and staff layoffs across the country. The reports included associate layoffs at Thacher Proffitt, Cadwalader Wickersham & Taft and Clifford Chance, mainly in the structured finance, real estate and capital markets practices of those firms.
Today, Above The Law posted a blog on rumors of low morale at Dechert, questioning whether layoffs were imminent.
The article closes with a helpful overview of the layoff landscape:
Dechert’s news puts the U.S. legal scene over the 100-attorney mark in terms of attorney layoffs and offered buyouts this economic cycle. According to data collected by The American Lawyer, 35 attorneys were laid off at Cadwalader Wickersham; 24 Thacher Proffitt mid-levels were offered buyouts plus an additional five first-years took optional buyouts; six Clifford Chance associates were laid off and 23 associates at McKee Nelson took buyouts.
Check out the full article, which also discusses Dechert’s record-setting year in 2007 — $836 million in gross revenue, and more than $2.3 million in profits per equity partner — by clicking here.
Update (5:15 PM): Okay, we’re confused. We just received this email, sent out by firm chairman Barton Winokur, and forwarded to us by a Dechert source. Our source had heard that the 13 were being laid off. But this email implies otherwise:
From: Winokur, Barton
Sent: Friday, February 29, 2008 4:37 PM
To: ALL Dechert Users
Due to the major shift in market conditions affecting client demands in our Finance and Real Estate practice area, we currently do not have sufficient work for all the associates in FRE. As a consequence, we have told 13 associates in the U.S. FRE group that we see no demand for them in that group in the foreseeable future. However, due to increased and substantial demand in other practice areas, we will be offering those lawyers the opportunity to work in those other groups.
Barton J. Winokur
Update (5:40 PM): We have reached out to Barton Winokur for clarification. We will let you know if and when he gets back to us.
Update (6:20 PM): The Legal Intelligencer has revised its piece somewhat, in light of the Winokur email:
The slowing economy has hit home at Dechert which just issued layoff notices to 13 associates strictly in its finance and real estate practice, according to a source inside the firm.
Shortly after the firm confirmed the planned layoffs, the source said Chairman Barton J. Winokur issued a statement that the firm would then offer the 13 associates positions in other practice groups. [Reprints the email.]
There was no word as to whether those associates, who had been given severance packages, accepted the revised offer to switch practices.
Update (6:35 PM): We’re hearing conflicting things about whether these 13 lawyers really are being given the opportunity to switch practice groups, or whether they’re being laid off outright, with additional lawyers getting moved internally.
We will continue to monitor and report about what’s going down at Dechert. If you can clarify this somewhat murky situation for us, please email us. Thanks.
Layoffs Hit Dechert Following Record Financial Year [Legal Intelligencer]