More bad news, this time from the Los Angeles market.
We’ve received word that O’Melveny & Myers has cut ties with five associates from their L.A. office. A tipster reports:
There were at least 5 associates let go today in the OMM Los Angeles office. Ranging from first years to mid-level associates. I’m not sure if they are being called performance related or if they are admitting they are layoffs.
OMM is calling them performance related. A firm spokesperson told us:
There have been no economic layoffs of associates at O’Melveny & Myers and there are no plans to conduct such layoffs. We are in the midst of our annual associate evaluation process, which began as scheduled in September, and some associates, as is always the case, are receiving less than satisfactory performance reviews.
More on O’Melveny after the jump.
We talked with the firm last night and alerted them that we would be posting the information today — after our California readers had a chance to wake up. After we spoke with the firm, a tipster reports that OMM associates received an interesting voice mail:
Steve Olson, Partner in charge of the partner compensation committee left a voice message claiming that there have been no associate lay offs due to OMM’s financial state, which he maintained is strong, and the associates who were told that they were let go, were told that for financial reasons.
The tipster also offered some background on the associates who were let go:
[T]here were five such associates, all in the transactions department. 3 of those associates were finishing their first year, and those three had low hours compared to the rest of the pack. Those low hours was a result of OMM’s manditory work coordination program, in which all work must be assigned and associates are not allowed to seek their own work. One of those three associates was a superstar in law school, order of the coif at a top law school, law review. it is hard to believe he couldn’t handle the copying and pasting of documents that is the work description of first years in the transactional practice.
Whether or not OMM is conducting stealth layoffs or simply trimming unproductive associates, they are clearly undergoing some sort of support staff reorganization. One tipster reports:
So O’Melveny & Myers has laid off a ton of staff in all US offices, most significant cuts in NY and LA. In New York, this includes the two receptionists, a senior paralegal (who was exceptionally good, and just had a daughter), several secretaries who have been with the firm forever, a guy from the records department, someone from their in-house facilities/catering department, the two talent development coordinators, all floating secretaries and assistants. …
Similar cuts were made in LA. This is despite various town hall meetings where the office heads said they were doing well, there wouldn’t be layoffs, everything was picking up, not to worry.
To top it off, the NY office had a summer associate recruiting reception last night, the day after canning the 20 or so staffers.
In response to the staff layoffs, OMM had this to say:
With respect to staff, we have prudentially been reviewing and reducing our cost structure for the past eight months, following two years in which our expenses have grown faster than our income. During this period we have reduced operating expenses, including staff, to reflect technology-driven efficiencies, to bring staff ratios into alignment with competitive norms and to address redundancies that are not required to support the modern practice of law. This ongoing review reflects the Firm’s commitment to provide the very best legal service to our clients
at fair value.
The Firm’s financial condition is strong; we do not expect to experience a decline in revenue or income this fiscal year
But one tipster isn’t so sure that we’ve seen the last of OMM layoffs:
This does not bode well for December. Rumor has it there will be a significant number of cuts made in the mid-level and senior associate ranks, not because of performance, but because of slow business and overhiring. These cuts will, of course, be called “performance-based” and will not reflect the actual performance. This is exactly what happened last year.
Five associates are gone, a number of staffers have been let go, and there are rumors about more to come. Performance related or not, “job security” is surely a thing of the past.
Hold onto your butts.
Earlier: Prior ATL coverage of layoffs.