An Update on Clifford Chance

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Two quick items about Clifford Chance, concerning two favorite topics here at ATL: layoff rumors and bonuses. A tipster at the firm told us:

CC/NY has laid off more structured finance associates in the wake of the six associates laid off last October. At least two more structured finance associates have been laid off in February — one straight layoff and one “pushed out,” i.e., strong-armed to leave — and there are rumors of more to come in other areas as well (such as M&A)….

The morale is low and associates [fear] that the CC/NY of the 2002 Memo vintage has come back. How can a firm which pretends to be one of the New York elite firms resort to layoffs as soon as market has slowed down? This is fantasy.

We contacted the firm, and spoke on the phone with a spokesperson:

“There have not been any layoffs since the six associates affected last October, not in structured finance nor any other practice. There aren’t any plans [for layoffs] in any practice area.”

“I’m not saying that we don’t continually monitor our business and work allocation. But we haven’t had layoffs in terms in terms of people being asked to leave for economic reasons. The layoffs in October were in direct response to market conditions in a very specialized product area, rather than a trend.”

We’re inclined to credit the firm on this. A firm that openly acknowledges layoffs, as Clifford Chance did, has more credibility when it denies layoffs than a firm that sheds a suspiciously high number of lawyers, but claims that everything is “business as usual.”
But we do have a correction to our prior report that Clifford Chance paid market bonuses, on an across-the-board / lockstep basis. Read more, after the jump.


From a source at CC – New York:

Most associates did not get their full bonuses (both base and special bonuses), and the mean appears to be 50% or less for each of the two bonuses. The management was deceptive in representing that it was going to pay Cravath market bonuses and that the hours would not be a factor. Despite its representation, the firm went out of its way to fabricate reasons to deny associates their full bonuses…. An associate told me that he did not get bonuses simply because some partners felt that he was not friendly enough (even though the quality of his work was beyond reproach)…. We do not see how Clifford Chance could compete with fellow Magic Circle firms like Linklaters and Allen & Overy in recruiting.

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Another source has similar things to say:

clifford chance is telling associates in their annual review interviews they’re not getting the special bonus for performance reasons. except that’s not why — the departments aren’t being given enough money to pay special bonuses. this is also reminiscent of shearman laying off people for “performance” reasons.

clifford chance pretended to match the bonus structure and run with the big guys. however, it never planned to pay it out except to a select few.

The firm’s spokesperson disagreed with the foregoing characterizations of its bonus policy:

The vast majority of associates did receive full market bonsues, including the special bonuses. Bonuses are awarded on a performance basis, so not everyone gets a full bonus in every year. But [the bonus process] was run on the same basis as in the past, and the great majority received the full market bonus.

The firm informed us that bonuses ranged from a $35,000 year end bonus and $10,000 special bonus for the class of 2006, up to a $65,000 year end bonus and $50,000 special bonus for the class of 2000 and senior.
The firm added, in a supplemental statement:

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It is vital to us to support our associates in their career development, and to reward their continuing dedication and hard work. The great majority of associates were paid full bonuses, including the special bonus, in January this year, and we were pleased to recognize associates’ performance in this way.

Also, CC associates, look on the bright side: at least you’re still gainfully employed (and pulling down a six-figure salary). Like many other law firms, Clifford Chance is outsourcing work to India. Will this lead to job cuts down the road? Time will tell.
Diligent and a long way from Chancery Lane [Financial Times]
The Clifford Chance Memorandum from its Associates to its Partners [Lawcost]
Earlier: Associate Bonus Watch: Clifford Chance Matches (For the Survivors)
Nationwide Layoff Watch: Clifford Chance

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