A firm-wide memo from Charlie O’Neil, managing partner of Chadbourne & Parke, announced that the firm was instituting a legal and non-legal hiring freeze in response to the economic downturn.
The lengths O’Neil went to try and bury this important piece of firm information are slightly amazing. The firm-wide email was entitled “How Are We Doing?” and the first 4 paragraphs read like the “Yay Us” emails we’ve seen from firms like DPW and STB.
However, in the sixth paragraph, O’Neil gets to the part where he talks about keeping control over firm expenses:
That said, expenses have been under constant review and we have taken a number of steps to better position us for the remainder of this year and next. Among the more significant is the decision to delay much of the planned technology upgrade. We recognize the need to improve technology and certain of the more important upgrades will continue. Others, including the upgrade to new desktop computers and software, will be postponed. We will review this decision in 2009 as the economic picture becomes clearer. Should conditions improve we will begin the upgrade sometime in 2009; otherwise it will be delayed until 2010. We will be issuing new guidelines pertaining to controls over Firm business expenses, including travel. We will also more closely monitor and limit certain other expenses which in a more robust economy might otherwise be acceptable We have also instituted a freeze on hiring legal and non-legal personnel. To the extent a practice area has need of additional legal personnel, we will seek to temporarily shift lawyers from a less-busy practice area to assist, rather than hiring laterally. We will take the same approach with non-legal personnel and departments. We welcome your thoughts on other cost saving measures.
Catch that? I bet O’Neil hopes you didn’t.
More after the jump, including the full Chadbourne memo and the firm’s response.
You might remember that back in September we incorrectly reported that Chadbourne canceled their Harvard Law School OCI interviews. The firm quickly corrected us and we posted that correction. In September, the firm told us:
In an item on Abovethelaw.com today headlined “Open Thread: How is the Fall Recruiting Season Shaping Up?” you say that Chadbourne & Parke has canceled “their whole Harvard OCI.” This is wrong. We are continuing to recruit for our summer program at Harvard Law School. In fact, Chadbourne recruiters are at the Harvard OCI taking place today
In light of this hiring freeze, what does that mean for students who interviewed with Chadbourne? Are they de-facto canceling their 2009 summer program? If so, it seems like an awful waste of resources to send recruiters around the country for jobs that are no longer available.
Even if their 2009 summer program goes ahead as scheduled, a hiring freeze cannot inspire confidence among prospective 2009 summers.
And, of course, we have no idea how this will affect 2008 summers associates. We assume that any of them who received and accepted offers for full time employment next fall still have those offers.
Chadbourne & Parke and Charlie O’Neil did not respond to a request for comment about this story.
If the firm decides to comment and clear up some of these questions, we will update this post.
Update (1:20): A firm spokesperson assures us that the 2009 summer program has not been canceled:
The hiring freeze will last until it becomes clear that the economic picture is improving. This will not have any impact on our 2009 summer associate class.
Check out the full memo below.
CHADBOURNE & PARKE — MEMO — HOW ARE WE DOING? — CHARLIE O’NEIL
How are we Doing?
More than ever in the last month, people have approached me with the question, “How are we doing?” The questioners are more earnest than they were a few months ago and seek more than my usual “Just fine.” There is no question that we are in uncertain times. Some of you have never experienced a downturn, much less a recession. Many of us have seen both, more than once. Perhaps the most severe in the last 20 years was the 1991 recession. Back then, by carefully husbanding our resources and taking advantage of the business opportunities presented by the recession, the Firm weathered the storm better than many and in 1992 had its then best year ever. In the wake of the fiscal crisis in Russia in the summer of 1998, many firms closed their Moscow offices. Unlike them, we saw the opportunities in restructuring, litigation and other work and in that process established our Moscow office as a significant “go to” player in the market. In 1999 that office had its best year ever up until that time. We similarly weathered the downturn in 2001 and the aftereffects of 9/11 and the Firm had a very successful year in 2002.
All indications are that we are in for a recession which could be longer than that experienced in the early 90’s. The obvious question is what does that mean for all of us at Chadbourne? We are fortunate that the Firm is not dependent on any one market segment or geographic region and our practices are balanced. Typically in a downturn or recession, law firms see a decided uptick in bankruptcy/restructuring and litigation. While this recession is different in that law firms did not see this uptick happening as quickly as it occurred in prior downturns, we are now seeing an increase in activity in these practice areas and expect that increase to continue. We are also fortunate that our transactional practices have not seen a decline to the extent that many other firms’ transactional practices have experienced. We have been particularly fortunate in that our renewables and alternative energy practice has been very strong through the first three quarters although, with the continuing pressure on corporate profits and the continuing credit crunch, we do expect some slowdown in that area as well. A slowdown in transactions is typical in a recession but it will be balanced by an increase in bankruptcy, restructuring and commercial litigation perhaps even more than proportionally. Lastly we also have some practices which tend not to be as affected by economic swings as some others. Our activity in insurance reinsurance disputes continues at a strong level as does our work in product liability.
The geographic spread of our offices has been very beneficial. The current slowdown began in the United States and has taken time for its effects to be felt in other regions, typical of past slowdowns. Despite the turmoil in stock markets worldwide, we are experiencing significant activity in the CIS, the Middle East and other parts of the world. While we may see some slowing of transactional work in the coming months in these regions, we can expect a corresponding increase in restructuring and litigation here also. Lastly, just as our geographic spread helps us at the beginning of the recession, it helps us at the end of one also. Typically global recessions end first in the United States. Thus, as the recession works its way through the world economy, we can expect that when and if work slows appreciably internationally it will soon be followed by increased activity in the United States.
You should take some comfort in the fact that we are doing better than a number of our peers. That, in part, is due to the fact that we are not overly dependent on any one practice area, such as capital markets. Nor were we a firm with a significant practice involving the various financial instruments which have now become “toxic” as were a number of other firms.
Nevertheless, we face a challenging time. However, such times do present opportunities for us, and practice groups have been working on initiatives to better service clients in these challenging times. One such initiative is the newly formed Financial Crisis Task Force, a cross-disciplinary group focusing its efforts on assisting clients work through the thicket of problems associated with the current economic conditions. Another is being undertaken by an interdisciplinary team to deal with insurance company related issues, including the multi-trillion dollar credit default swap market. Our second Green Business Summit held on October 17 focused on renewable energy initiatives in light of the financial crisis, was attended by over 500 people and received widespread media coverage. Other initiatives are in formation and we are in frequent contact with our clients in order to understand and meet their developing needs.
In addition to increased attention to client relations and business development, we as a firm, just as we do individually, must live within our means and watch expenses. Fortunately, we have always operated on a “lean and mean” basis. That said, expenses have been under constant review and we have taken a number of steps to better position us for the remainder of this year and next. Among the more significant is the decision to delay much of the planned technology upgrade. We recognize the need to improve technology and certain of the more important upgrades will continue. Others, including the upgrade to new desktop computers and software, will be postponed. We will review this decision in 2009 as the economic picture becomes clearer. Should conditions improve we will begin the upgrade sometime in 2009; otherwise it will be delayed until 2010. We will be issuing new guidelines pertaining to controls over Firm business expenses, including travel. We will also more closely monitor and limit certain other expenses which in a more robust economy might otherwise be acceptable We have also instituted a freeze on hiring legal and non-legal personnel. To the extent a practice area has need of additional legal personnel, we will seek to temporarily shift lawyers from a less-busy practice area to assist, rather than hiring laterally. We will take the same approach with non-legal personnel and departments. We welcome your thoughts on other cost saving measures.
Working together and focusing on what is important to our business we will manage through the uncertainty and emerge as a stronger firm, just as we have done in past downturns. We all must recognize, however, that we cannot proceed as if it is business as usual. It clearly is not. All must go the extra mile to ensure continued success.