Update: What's Going on at Sonnenschein - CLT?
(And a discussion of the Charlotte market in general.)
Here's a bit of follow-up on last week's post about Sonnenschein Nath & Rosenthal. We heard from a number of tipsters, and their reports are consistent with the rumors previously reported:
1. Sonnenschein is rescinding offers of summer employment to incoming summer associates in the Charlotte office.
2. Sonnenschein is rescinding offers to full-time associates who were set to start work in the Charlotte office in the fall.
We have not heard from the firm since our initial inquiries last week -- despite repeated efforts, including some made yesterday. We are inclined to agree with this commenter:
Their lack of response must mean it's true. Rescinding offers is about the worst thing a firm can do for its rep. There's no way they're going to confirm it if it is true, and they would've immediately disputed it if it is false.
Read what our tipsters had to say, after the jump.
From a student at Wake Forest law school:
Both rumors are true. The summers' and the full-time associates' offers were rescinded. They were all classmates of mine at Wake Forest.
From another law student in North Carolina:
I can tell you, to a 100% certainty, that the rumors are true: the summer associates and the first year associates both had their offers rescinded. One of my classmates here at the law school whom I speak to almost every day pulled me aside the other day and told me that the firm had rescinded [its offers].I understand why they had to do it, given the sluggish economy, but their timing is awful -- [the rescission victims] lost essentially an entire year of job searching -- given that graduation is right around the corner.
From another friend of someone scheduled to start at Sonneschein - Charlotte in the fall:
[My friend] had already bought a house in Charlotte. Sonnenschein did rescind the offer.... The associates that came to Sonnenschein from Kilpatrick Stockton came with guaranteed three year contracts, so I doubt that they are going anywhere.
And the cuts may have gone deeper than incoming summer and first-year associates:
I have good friends who work at the firm and it is definitely struggling. They laid off three associates in the fall, but didn't do it as transparently as Cadwalader. They just laid off another associate though you'll still find [that person] on the letterhead, and YES, they rescinded offers to the summer associates they interviewed for this summer. And they rescinded the offers to the two summer associates they gave offers to from last summer.Talk about class, they did it one month before their graduation! I don't blame the partners in that office, they are a great collection of attorneys. But Sonnenschein Corporate - aka Chicago - needs to handle this with a little more thought. They didn't even offer the summers who had full-time offers the option to go to another office.... [T]o me this indicates the firm is having problems across the board.
Could Sonnenschein be guilty of a little duplicity? Writes a tipster:
I saw one of the recently unemployed students in the student lounge looking at this article that came out out only days before the Charlotte layoffs. Sonnenschein reported to Law.com that they would not let anyone go from their Charlotte office because it was "entirely inconsistent" with the firm's culture.... It seemed quite two-faced to me after the glowing statements that [firm chairman Elliott] Portnoy made about the Firm's culture. You should definitely check into this!
In that article, by Leigh Jones of the National Law Journal, there's a nice overview of the troubled Charlotte market:
Commercial mortgage-backed securities work has slowed "considerably," for Sonnenschein Nath & Rosenthal, said Elliott Portnoy, chairman of the 644-attorney law firm. In April, it opened a Charlotte location with 16 capital markets attorneys. The group came from Atlanta-based Kilpatrick Stockton.Sonnenschein has "integrated" those attorneys into other practice areas, he said, which includes more traditional real estate work and litigation. Laying off people would be "entirely inconsistent" with the firm's culture, Portnoy said.
But earlier this year, Cadwalader, Wickersham & Taft did just that. It let go of 10 capital markets and global finance attorneys from its Charlotte office, which now has 82 attorneys. The New York-based law firm opened its North Carolina office in 1996.
Another firm, Dechert, earlier this month offered reassignments to 13 of its finance and real estate associates, three of them in Charlotte. Dechert opened its Charlotte office in 2004.
Given these grim realities, this account from a job searcher in CLT didn't surprise us:
Weird things are happening in Charlotte. I'm a recently discharged JAG looking for a litigation job in Charlotte. Of course everyone says "oh, you'll have no problem finding a job!", but of course no one wants to put their money where their mouth is. During the course of this job search, I learned from a partner-level contact at a regional firm that his firm has received several letters from students who have had their offers rescinded by large firms. Apparently this is happening only to transactional associates-to-be, and the market is flooded with students.
Law Firms Lured by Charlotte's Banking Culture Find It's Cooled Down [National Law Journal]
Earlier: What's Going On At Sonnenschein?
(117) Comments
First! Go hogs.
First! Go hogs.
That is shocking conduct on the part of the firm. Laying off incoming first years is a mark of utter desparation.
First! Go hogs.
That is shocking conduct on the part of the firm. Laying off incoming first years is a mark of utter desparation.
Obviously the new comments system is working well.
On behalf of all students who will be summering in Charlotte, let's pray that our firms are optimistic that work will pick up by Fall of 2009--because if not, it could be a slaughter of no-offers!!
Sonnenschein's management is a bunch of idiots. They went full throttle into Charlotte and Phoenix making some obscene guarantees to partners for their compensation for the first three years and those offices both ground to a halt shortly thereafter. Their plan was to grow a ridiculous amount in just 5 years to be a $1.0BN revenue firm, which is almost triple where they were and do it entirely through lateral partners. Just a completely stupid strategy cooked up by some consulting firm. They basically have destroyed alot of their more stable, low growth modest PPP practices to jump entirely into the corporate transactional world just as it is slowing down.
I, personally, do not think there will be a more than normal amount of no-offers in the Charlotte Market for incoming SA's--the market is going to pick back up eventually and when it does these firms are not going to want to try and fill demand through lateral hires--so i wouldn't worry too much summer associates (Sonnencschein is definitely a rare exception).
Only a few summers were going to the Charlotte office and yet they can't give them the office of summering at another office?
What a shit firm. They're really screwing that student and that 1st year associate. Not that I'm surprised. According to http://www.law.com/jsp/article.jsp?id=1170237758743, between Oct. 1, 2005, and Sept. 30, 2006, 33 partners left the firm -- including more than 15 who were asked to leave. About a dozen more partners were de-equitized last year.
The big problem isn't that the market won't pick up, it's that all of these firms have overhired like crazy the last two years. Look at their rosters, they've brought in over half of their numbers over the last 3 years, they were planning on the market continuing with it's 20% jumps, which just isn't realistic, yes, the market will pick up, buy i don't think a 100 person office really needs to keep all 28 summer associates it gave offers to for this summer, do you?
And just for the record, as the comments here seem to be generally on topic, let me note that the new layout is atrocious.
Terrible...way to throw your recruits under the bus. Smart students will avoid Sonnenschein in the future if they know what's good for them.
Hey Lat,
Since they won't comment on this situation - I advise you to leave this story on the home page until they deem us worthy of a statement.
What a bunch of passive agressive FUCKERS.
It's not like they didn't see this coming - the least they could have done was give notice further in advance. Even an extra month would have helped some of these folks.
The thoughtlessness with which this was handled indicates a certain level of panic and desperation on the part of the firm.
I hope people considering sonnenschein next year do their research.
On another note, the new ATL format is worse than the German invasion of Poland.
these poor summers were sonnenscheinized.
Interesting that so many firms are having lay offs in Charlotte and McGuireWoods just merged with Helms Mulliss. What does that do for the market?
Interesting that so many firms are having lay offs in Charlotte and McGuireWoods just merged with Helms Mulliss. What does that do for the market?
Also, the guest icons are SEXIST.
This thread encapsulates both the worst formatting, as well as the worst law firm behavior, ever! Also, your worthless system did not respond to my attempts to make a user ID, complete with a photo of me dressed in Klingon garb. Therefore, I am forced to sign my name in the text section sans photo.
-Comic Book Guy
Also, the guest icons are SEXIST.
Update: What's going on at ATL - Interweb? (And a discussion of horrible formatting choices in general)
Isn't it time that some other "law" related blog did a post about what a disaster this has been? Is SEN available? Could she interview Lat?
Terrible to do, and hopefully it will not be forgotten in years to come by law students, associates, partners in other firms, and clients. I mean if your lawyers can't even manage their hiring properly, what does that say about their ability to manage your work.
However, given the partners involved in the Charlotte office, lets just say its not surprising. Class and Less go hand in hand with those guys.
I thought the German invasion of Poland went pretty well.
4:12 - Isn't it sexist of YOU to assume that a person with no hair wearing a business suit is a man? I see the guest icon as gender-neutral.
What's with the picture of Barack Obama to the left of every guest posting?
I agree with 4.32. Some of my colleagues in Charlotte are bald faceless suit wearing freaks. I wondered why Greta, the prettiest of that group, was having her picture taken. Now I know.
More on point, those of us in Charlotte are hoping that the powers that be take a somewhat long term view. Our wage still means we earn more than NY, and even in the down turn a 3rd year assocate does more interesting and productive work than a 6/7th year in NY, LA or even CHI. Fire those goons and send work to us!
The new site is awesome; it has completely solved the double posting problems.
I second 4:09 -- the guest icons have to go.
4:35- highly credited
This is just more proof that every single bloody firm out there is trying to imitate the CWT model of 1:10 partners to assocs/of counsels/slaves. Sonnenschein is de-equitizing like crazy in an effort to boose their PPP. The problem is that they are not that prestigious. So they just end up screwing over a bunch of decent kids with their clumsy greed (and making an ass of themselves).
thanks Lat for calling them out on this.
They deserve it.
The new site is awesome; it has completely solved the double posting problems.
this font is difficult to read. i'm ambivalent about the rest of the changes to the site, but this new font is a problem.
4:35- highly credited
This is just more proof that every single bloody firm out there is trying to imitate the CWT model of 1:10 partners to assocs/of counsels/slaves. Sonnenschein is de-equitizing like crazy in an effort to boose their PPP. The problem is that they are not that prestigious. So they just end up screwing over a bunch of decent kids with their clumsy greed (and making an ass of themselves).
thanks Lat for calling them out on this.
They deserve it.
the new format sucks
Who 'proofed' this new site layout? It's awful...
This needs to be publicized as much as possible. Withdrawing offers to graduating 3Ls has ruined careers. Let Sonnenschein's punishment be a warning to other firms who are tempted to do this.
Good work David!
Who 'proofed' this new site layout? It's awful...
I hate the "guest" screen name. Whither Frat Stud, JT, SLJ, Gallion, and the rest?
Sonnenschein Charlotte probably doesn't care about its future reputation. With so many lateral partners, they probably think they can get as much profit as possible now and just jump ship when things go wrong later.
FYI. Pillsbury just changed its summer program from 12 weeks to 10.
Charlotte will rebound, but the days of wine and roses are over. Glad I moved on to another city.
5:04 = the only good comment on this entire site today. I love it. She is too much sexy for Lat.
Dewey LeBoeuf in Charlotte will be next.
Isn't this how Brobeck's implosion started?
The firm will now be known as Sonnenscheit.
Dewey LeBoeuf in Charlotte will be next.
back?
Hey, can anyone tell me if these poor bastards are looking for work in other NC cities? We're in Raleigh and we need litigation associates. Good times.
I know people that have been laid off in Charlotte and looking for jobs for the last 6 months, with no luck. If you're not positive your firm is going to hang on to you, I think it may be worthwhile to check out what firms in other *safer* cities are gonna dip into the 3L market.
You have to think the McGuireWoods Helms Mulliss merger was a way of McGuireWoods trying to save itself. All it means is one less firm out there that could potentially hire someone, and with none of the nationals hiring, if you get no offered this summer, finding something in charlotte as a 3L will be next to impossible.
back?
Only a few summers were going to the Charlotte office and yet they can't give them the office of summering at another office?
That's really the worst sign. Clearly, the Charlotte office isn't working out, but if they can't absorb those summers elsewhere, the whole firm has a problem.
We need a new font!!!
The spacing for "i" is off--the "i" is placed too far to the left.
For example: in "what is" the i floats directly between the t and s even though there is a space between the t and i and no space between the s and i.
See also a work like tiki. That's just horrible.
For the record, I like the format.
From GW:
Come join in a casual conversation with attorneys from the law firm of Sonnenschein, Nath & Rosenthal about what to expect from a summer legal job. This is also a great networking opportunity!
Wednesday, April 9th
5:00pm-- SCC
Lat - ATL is great, but yeah, the new layout could use some work.
horrible new layout
Hope and change, 4:35. Hope and change.
- BHO
Lat- How about a poll on the new format?
Keep it, revert back to old, or toss it and try something else.
How are other Charlotte firms going to be affected by the down turn in the economy?
Mayer Brown?
Moore VanAllen?
Parker Poe?
Any ideas?
Why couldn't they just offer those summer and starting associates positions in other offices? What the hell can a 2L and 3L do this late in the game? Even non-profits are done hiring at this point... this is one of the worst things you can do to an incoming associate.
Nobody cares about the Fourth Circuit.
to 7:31
Ummm, not good. I think MVA is probably the best out of that group, becuase they're full service for their client and they do a lot of traditional lending work which won't dry up. Mayer is probably the hardest hit out of that group considering they've hired away pretty much every junior and midlevel from CWT and Dechert the last two years before the new shops came in to get their piece of the securitization game. To be honest, i'm not sure what Parker Poe does, maybe shopping mall leases and stuff? I thought they had some litigators or was that nelson mullins that was gutted a little while back, eh, oh well.
RE the new style: This new font is hard to read, and it's "shadowy" on my monitor. I rate it "needs improvement" but A for effort.
Let Sonnenschein's punishment be a warning to other firms who are tempted to do this.
Puinishment? really? Haaaaaaaaaaaaaaaa Please- you're a dime a dozen- you'd lick my ass for a job
I spent a summer working for this toilet firm. IMO, it is terribly, terribly managed. It does not surprise me that Sonnenschein did something like this. What pisses me off is that they won't own up to it.
In case you're wondering, I didn't work for the CLT office, I got my offer, but didn't take it.
8:47 this will hurt their rep tremendously. While there's no shortage of law students to fill their ranks, they're going to have to scrape the bottom of the barrel to take students who received no other offers. Sonnenschein would be my absolute last choice after this.
I agree with 401 Lat, please leave this story at the top for a while until Sonneschein decides to come clean, or miraculously has a change of heart and offers the would be incoming 1st years and SAs spots in other offices. If it were me I know I'd rather go to another market than have my career completely ruined.
About this being a mark of desperation, I bet their half baked plan to grow corp is f*cking them up the ass right now. I'd be very, very afraid if I had plans of working for them.
Chuck Norris is gonna put the smack down on this firm.
If I were this toilet firm I'd have a sudden change of heart and offer the victims spots in other offices. I'd play it off like that was in the works all along, and swear the victims to secrecy.
Were the rescissions in writing? Lat should offer the victims $10 for a pdf of the letter or $5 for a copy of the email. They could use the cash.
Sucks for the summers.
BTW, ATL's new layout is TERRIBLE.
Guys at my high school rescinded offers to summer associates all the time. It was no big deal.
I (a male law student) interviewed with Sonnenschein's NYC office this past fall. The (female) attorney I interviewed with told me the NY office was the best place in the U.S. for a woman to work at, but that they hated men. She wasn't making a joke.
I feel bad for the attorneys and summer associates who lost their offers, but I hope the firm as a whole suffers.
12:01, I worked for the NY office. Almost 80% of the partners are men, so I really doubt Sonnenschein has a man hate problem. I never noticed any sexism towards men. I hope Sonnenschein sues you for defamation.
I have never even heard of this firm until today.
Two ideas I like: (1) getting a copy of the e-mail/letter sent out rescinding the offers, and (2) LAT leaving this post at the top for a few days as a 'punishment' to Sonnenschein.
Protest to their Managing and Hiring partners and a selection of their associates directly. Their emails are listed here:
http://sonnenschein-managing-amp-hiring-partner-emails-here.autoadmit.com/thread.php?thread_id=796409&mc=8&forum_id=2
1:06 - Good one. Just sent them a piece of my mind.
That is my first time ever going to autoadmit.com. I don't think I'll be going back.
Some of those message threads/comments are so ridiculous that my disgust goes from Sonnenschein's actions to the law students who are posting
pillsbury definitely just cut its summer program down.
150, elaborate please
Excerpt from today's Charlotte Observer, http://www.charlotte.com/breaking_news/story/572772.html:
The latest-hit: Chicago-based Sonnenschein Nath & Rosenthal, which rescinded two job and two summer associate offers in Charlotte last month to law students, the firm said last week.
The students had accepted the offers last year and had planned to start in the capital markets practice area -- working with mortgage bankers and other investors on real estate loans and other complex transactions -- this summer and fall.
"Capital markets work has slowed considerably," firm spokeswoman Linda Butler said. "It's a step we would have preferred not to have taken, but we felt it was necessary."
Sonnenschein also has asked its existing capital markets attorneys -- 17 of the 23 lawyers in its Charlotte office -- to take on different kinds of work, she said.
I think that banking and securitization in CLT is going to be tough for a while, and especially for more senior attorneys. A lot of groups jumping shops had local firm equity partners who were de-equitized (but given guarantees), with a result that non-equity partners (or those about to become them) were kicked down to associate status, made to take some additional laps, and not given guarantees. Now that firms are hurting and loyalty is non-existent, I am guessing that firms will send their junior attys to do litigation and ax their higher-cost headcount.
And for every group jumping from local to national firms, can someone explain to me how the banks will somehow pay multiples of people's former rates just because the letterhead has changed? The folks at the banks aren't stupid or bad with math.
The firm bio should be Portnoy's Complaint Volume II. Would you expect any more from a firm led by a titan of lobbying?
At least they're still one spot above GT in the Vault rankings...however long that lasts...
Did they give them anything? Many years ago, I heard of midwestern firms rescinding offers, but they gave three months.
Speculated* Sonnenschein Firing Policy
1. Invite associate to lunch
2. Offer to drive
3. Have movers pack up associate's office
4. Make polite conversation at lunch for approximately 30 minutes (e.g. have you purchased a house in the Charlotte area?)
5. Go to the bathroom and never come back
6. Have movers deliver associate's effects to the restaurant.
*Speculations not based in fact, but rather in the apparent policy of letting associates go with little warning and without notifying colleagues
I do not know where else to post this so I guess it will go here. Like 2 others have stated already, Pillsbury (new york) called all the summers yesterday and told them that the summer program will be cut from 12 weeks to 10.
Oh noes, two summers got their offers rescinded. Two people. The sky is falling!
What is worse--to have your summer associate offer rescinded now or to work at Sonnenschein with no possibility of getting an offer--in other words would a no offer hurt more than being notified a month before the summer begins that your offer has been rescinded??
Its no big deal -- in 10 or 15 years most recruits will not even know of this.
In '93, Morgan & Finnegan (an IP firm) dumped their entire incoming class two weeks before the bar! It has already started to recover.
answer to 10:24
I think have your summer associate offer is worse. I think having worked the summer and gotten a no-offer would leave a better possibility to shop the 3L market (if any will exist).
to 10:22
I sort of agree with you. The fact that Sonnenschein rescinded offers to two people does not mean (hopefully) that the Charlotte legal market is doomed. It just really sucks for those two Wake Forest students (I think someone has posted that these were Wake Forest students).
"Oh noes"?
From now on I'm going to think of Sonnenschein's golden O every time I look at a urinal deodorizing ring. That way I can have the satisfaction of pissing on them.
Don't try to sugarcoat the current state of affairs at Sonnenschein!!!
10:37: Oh...only 10 or 15 years to recover. Maybe you could have just laid out a year's salary for those folks, recovered financially in a couple of years, and then saved yourself the PR nightmare and 15 years to recover.
I used to work at SNR. The bonuses alone are hilarious. You have to make the hours requirement (1950) to be eligible for a bonus, which, surprise, is just a percentage of your salary "held back" until you make your hours. Where I come from, that ain't a "bonus."
You have to bill 2100 hours to qualify for an actual bonus and even then, it was literally like 5 grand. That place is a joke.
Any thoughts on general litigation in Charlotte? How are other practices holding up?
This is a good example of what happens when greedy partners jump ship and drag their associates with them. The two ego & money obsessed partners who led the drive from Kilpatrick to Sonnenswein are to blame. While they couldn't predict that their work would dry up, they have exposed their associates to the ill wind. Of course the associate do not have a 3 year gaurantee, and they will be next on the chopping block. For Sonnenswein, it is easy to make cuts at an office where you have no ties, no interaction, and have only had opened for almost a year.
While it couldn't have happeneded to a nicer pair of partners, I do feel sorry for the associates that will ultimately pay the price.
Morgan & who?
Milbank also reduced their summer program from 14 to 12 weeks. Things are getting bad out there.
Milbank also reduced its summer program from 14 to 12 weeks. Things are bad everywhere.
Here is a link that works for the Observer article:
http://www.charlotte.com/business/story/572772.html
http://www.charlotte.com/business/story/572772.html
Milbank reduced its summer program from 14 to 12 weeks. Not a good sign.
I think that the Charlotte legal market actually is really hurting right now. The number of lawyers at large firms in Charlotte has been decreasing over the past year, even with all of the new firms moving in. That is a bad sign, that means they're starting to recognize that the work they did here is drying up. The firms here are going to need to find new things to do for clients that they typically only did a small segment of legal work for, and that means fighting their current counsel for market share, which isn't easy when your rates are twice as high than the local/regional firms that already have the business. The raises in Charlotte to 160 doomed the securitization shops in the city to stagnant growth, if any at all.
Good job to the partners for pricing themselves out of the market, 3:35!
3:36: Disagree with you that the Charlotte legal market "generally" is hurting right now (in structured finance, yes, but not generally). According to the Observer article, the number of attorneys in Charlotte has increased from 1500 to 4000 over the past 20 years (contrary to your post).
You wouldn't happen to be a partner at one of the firms paying 160k or an associate at a firm paying below market?
4:30 ... You're obviously not, considering that your reading skills are horrible.
The readers on this site aren't concerned with the legal market as a whole, they're concerned with the big firms, which in Charlotte, definitely doesn't stretch below Parker Poe and Nelson Mullins, if it even includes them. (I include them, as a sign of respect to their attorneys who do good work for their clients, and pay respectably).
More Importantly,
1) I said that that the number of lawyers had decreased over the past year, not over the last 20. Under your reasoning, the market has been booming lately because the dow was only at 8000 in 1988.
2) I said the number of lawyers at large firms has been decreasing over the past year, not the total number of lawyers in the charlotte area, which is the number the article quotes. Do you really think that all law jobs are the same? I personally don't want to make 56K a year working at some small insurance defense firm. While the total number is growing, the number at firms that pay 145K + is not. There are more firms, and firm A may get a new lawyer, but they got that lawyer from firm B. And in case you need help with math, too, that has a net effect of zero additional law jobs.
Every one of us knows someone that was laid off and either had to leave Charlotte to find work or is still in Charlotte, unemployed.
Please read more carefully than you did in this instance before giving client advice, they're not paying you to be stupid.
Charlotte will be a great market ..... in 5 years ..... if the city keeps growing. But for the next 12 to 18 months, it's going to be hanging on for dear life. I don't know a single transactional person that is at hours right now (i'm sure there are some, just not any of my friends) so everyone should take delusions of cushy summers and guaranteed offers out of their mind. Long run, it's a good market and a decent town (it's not a real city) but short term, hiring is going to grind to a halt, they don't need anymore people, because the volume of work isn't keeping up, and no one is leaving because there aren't as many business jobs available in this economy.
4:57: Most people on this board don't read the posts as thoroughly as they would a document on which they were advising a client. But if you do, perhaps that explains the short-fall in billable hours.
And, by the way, with the influx of regional and national firms over the last 12-18 months, the # of $145k+ jobs has certainly increased (though maybe not in the last 3-6 months).
great job sonnenschein. this is a total fiasco for the reputation and credibility of the firm. you might have saved a few bucks now, but in the long run none of the best law school grads are going to want to work for you because youve sullied yourself in the eyes of everyone who reads this blog! and everyone i know who interviews at firms reads this blog. given the choice, any self-respecting law grad will just go to another new york firm that 160k.
when i interviewed at sonnenscheins new york office, they told me that their goal was to double in size in the next couple years.
DOES ANYONE KNOW THE STATE OF THEIR NY OFFICE RIGHT NOW? OR THE FIRM AS A WHOLE?
clearly, underestimating technology and the blogosphere, and trying to sweep this stuff under the rug is a great sign for a firm trying to grow.
The influx of new firms to charlotte has brought almost zero net lawyer, they have come in and taken groups from firms that were already here. They're not sending in their own people to set up camp. Sonnenschein is a perfect example, took a group from KilStock, and a group from Nelson Mullins, then poached a lateral from Cadwalader (or two) ... that creates zero new lawyers, just moves around the old ones. By the way, they also laid off people in the fall, so technically, the influx of Sonnenschein COST the city lawyers.
There are now more people making 145 or 160, but that's only because groups left firms paying 130 to start a new office of a new firm that set market at 160.
Sonnerschiessered!