Readers have demanded more information about the so-called “stealth layoffs” at Dechert. Finally, we have additional information to report.
Readers, commenters, tipsters, recruiters, employees, and the Virgin Mary who appeared to me in a breakfast grapefruit are all reporting that a number of associates will be laid off at the end of this month. These layoffs have nothing to do with the March departures from the firm, and contradict the firm’s official statements on the matter.
As best we can tell, no less than 10 and no more than 30 associates were told at the end of July that they would be laid off in 3 months. According to one tipster:
Effectively we were told that we can come in to work, but do not have to, and we can tell the recruiters and places where we interview that we still have a job at Dechert. Now, at the end of the three months our salaries would stop coming. These three months was our severance. At the same time the partners did absolutely nothing to help us locate jobs because most were too afraid to do anything.
As many of you know, Gina Passarella of the Legal Intelligencer was able to speak at length (free version) with Dechert Chairman Bart Winokur. Mr. Winokur declined to speak with ATL directly, but in the Intelligencer article he does not really deny that associates were asked to “move on” in this manner. Instead, the Intelligencer reports:
“In my view, layoffs are when you decide to cut head count,” Winokur said. “It’s not when you decide to replace people with better people.”
Winokur said the culture of the firm is to improve year over year and when people reach a point of seniority and still aren’t getting better, the firm will sometimes tell them they don’t have a future at Dechert.
Whatever advantages there are to stealth layoffs are pretty much destroyed when your firm chairman starts talking about replacing people “with better people.” People we’ve talked to have emphasized that the firm is doing nothing to help associates put on notice find new jobs.
Even if you look at all of the evidence in the light least favorable to the firm, it doesn’t look like the number of July/October layoffs rise to the level that has been mentioned by some of our commenters.
But, there might be some other stealth moves going on. Read more after the jump.
Have you ever heard of a “pro-bono sabbatical?” We understand that number of Dechert associates have been “temporarily transferred” to community organizations because there is not enough work for them at the firm. According to our source:
The sabbatical itself involves associates being transferred to pro-bono agencies to work for a period of several months. They will still be listed with the firm, but no firm work will be given to them. Agencies to which they will be transferred vary greatly in what they do. These agencies are not affiliated with the firm in any way other then this project or other [regular] pro-bono work.
We are working on coming up with a list of agencies that could be receiving full-time help from Dechert associates. We believe that these externships began last week.
Just like the associates who were effectively laid off in July, this “sabbatical” sounds like another way for Dechert to push people out without admitting that they are laying anybody off.
As of this writing, Dechert has not denied these specific allegations. In the Intelligencer article, Winokur tried to leave the impression that most associate turnover was due to normal attrition:
Winokur was adamant that there had been no layoffs since those in the finance and real estate practice announced earlier this year. He said there are a total of 68 U.S. associates who were at Dechert in January 2008 who were not there by the end of September. For that same time period in 2007, he said, 82 U.S. associates had moved on. He wouldn’t specify whether those numbers were all associates who were asked to leave or if some left on their own accord.
If it is true that associates were told in July that they would be laid off in October, if it is true that associates were put on “sabbatical” for an indefinite amount of time, then associate head-count numbers as of September looks like a disingenuous “fact” by Winokur.
Putting it all together: if you look at perhaps as many as 30 associates that could be out of paycheck at the end of the month, and then add any number of associates who are now being forced into a pro-bono externship pending a future layoff, the huge numbers of 80 or more associate layoffs that have been posted in our comments (which I openly mocked) don’t look so crazy.
It certainly looks like the “slightly exaggerated” headline was “greatly understated.”
But the most damning evidence of all is that the firm has not directly denied any of these rumors. Read Winokur’s comments to the Intelligencer. He calls the rumors “bull” and bemoans the anonymity of commenters. But when we asked Dechert a simple question: “Did you tell associates in July that their paychecks would stop coming in October,” the firm decided not to answer.
We’ll keep digging and keep you posted on any new information we uncover.