Damnit, so close to first.

third???

Atlanta rumors:
1. hunton
2. smith gambrell
3. A+B

Yet another craptastic TTT firm that will get slaughtered in recruiting once the economy picks up...

Sonnenschein's cutting more, too.

5 = delusional law student.

The economy is going to stay shitty longer than you can stay picky.

7 = disgruntled Katten associate.

Slaughtered in recruiting? Just add an extra $5k to the offer and greedy 3L's will forget all about any layoffs.

Cut from Katten Chicago this morning. Confirmed.

sorry 10. keep your head up.

This won't hurt them in recruiting, not in this economy. Law students will be desperate for jobs as will laterals. Katten still pays market and people just need a job that pays so they'll take it. I would...

"Perhaps the Clifford Chance layoffs were just the beginning."

But for the TPW, CWT, Heller, Greenberg, CC's last years lay-offs and all the other lay-offs that already happened in this economic cycle, the above would be an accurate statement.

Katten is not the only firm cutting attorneys in Chicago.

First to say I'm super happy I don't work in the "Wachovia practice group"

10: how many were cut?

Thanks 11

10,

Apres tu, le deluge?

10 - sorry to hear it. Katten kind of screwed themselves by being such a corporate-relying firm. There are still jobs out there.

10 - I'm very sorry to hear that you were let go. What group are in you, if you don't mind my asking? Are you getting severance?

14, I suspect the same is true of Moore & VanAllen and Charlotte. Presumably, some of the A&B cuts will be (are) in Charlotte (though I understand their IP practice group-- about half of the Charlotte office-- is doing well). I suspect there will be some other firms doing the same. I'd include both national firms (CWT, Sonnenschein) and regional/local firms (Parker Poe is the one that jumps out here) in this assessment.

10: best of luck to you. from what groups were the cuts?

21, I would not necessarily expect that result from the other local/regional firms (Parker Poe or otherwise) who are much more diversified.

Confirmed. I work in the Enron M&A practice group.

Yet another reason to join a halfway decent firm from the start.

-GULC 2L

Any word on staff cuts at Katten? I'm suddenly very very scared.

Agreed, 19. Katten is exposed here because of its client base. The real question is: Is this a dissolution situation in the making? They probably are among the most vulnerable of the Chicago firms, excepting perhaps Sonnenschein.

Nationwide fat guy watch: Is Mystal cutting fat?

...nah, he's just gobble gobble gobbling up some TTTurkey.

Confirmed. I work in the Enron M&A practice group.

Can someone look into stealth layoff at Allen & Overy. I heard they are giving people overly bad performance reviews and telling them they'll be fired in a few months if they don't improve.

Allen & Overy is an awful place to work in -- at least in London.

Allen & Overy is an awful place to work in -- at least in London.

23, 21 here.

MVA is far more exposed to BoA than they are to Wachovia (BoA accounts for ~20% of their business; Wachovia accounts for ~5%). If the layoffs at MVA are in fact related to Wachovia, that doesn't bode well for others in Charlotte-- "diversified" or not.

Of course, MVA does a lot of M&A work (they like to boast that they make more deals than just about anyone in the country), so it may be the economy in general that's hurting them more than Wachovia specifically.

make fun of Mystal all you want, but leave the good name of turkey out of this dammit.

The A&O suspicions are likely true. A&O is looking for a merger partner, and probably ditching associates to make itself more profitable, and thereby attractive to prospective merger partners. This is much like Thelen's recent layoffs that were part of a vain effort to find a merger partner. The effort will probably fail.

Can anyone provide any concrete info about the potential stealth layoffs at Allen & Overy? I just accepted there last week and am curious if I made a poor decision.

Yes, 36, you made a poor decision.

25 = douchebag

Anyone disagree?

any more katten news?

Thanks, 37. That's really informative.

-36

Hey 36 and 40, I think A&O is a much better firm than places like Shearman, despite the fact that part of the firm's name is a part of the female reproductive anatomy (Ovary).

36,

Rest assured that you made a poor decision.

But that's not for me to explain; it's for you to find out.

That said, there is a very good reason why they are urgently seeking associates to lateral in.

41,

A drooling mongoloid with no opposable thumbs wouldn' t make the same mistake you just did.

Overy vs. Ovary.

See the difference? One is part of a named law firm and the other is part of a woman's reproductive system.

21 - how certain are you of your analysis, or should I say, how close to the actual situation are you? I can confirm that *one of the Charlotte offices of one of the firms* you mention above is about to let the ax fall...probably on Friday.

21 - how certain are you of your analysis, or should I say, how close to the actual situation are you? I can confirm that *one of the Charlotte offices of one of the firms* you mention above is about to let the ax fall...probably on Friday.

43,

Phonetically, the words are the same. You clearly missed the humor involved. Don't be pissed at me because you picked up an extra chromosome at HLS.

- Drooling mongoloid WITH thumbs

Which is the better firm, CWT or Katten?

44 (and 45), National firm or local?

Why would a firm lay off associates rather than reduce the number of incoming associates? Doesn't seem to make sense from an economic perspective.

This year has been a bloodbath for UNC 2L's looking to stay in state.

Sorry to hear that 10.

27 and/or 19, what makes Katten so vulnerable? I know they have one of the deeper real estate practices in town. Is it overreliance on those types of clients (many of whom aren't/can't do much of anything right now)?

Why would a firm lay off staff rather than reduce the number of associates? Associates are far more expensive. Doesn't seem to make sense from an economic perspective.

43 before you get your panties in a bunch realize 41's comment was just a stupid funny joke.

Good "catch" there slugger, you will make a fine lawyer one day. The profession needs more diligent folks like you with absolutely no sense of humor. Douche.

45, I'm closer to MVA and to Alston than I am to Parker Poe (MVA shows their client breakdown to most anyone who cares to see; I've heard that they have a nice powerpoint that they show to folks who come on callbacks).

The rumors I've heard about CWT and Sonnenschein are not Charlotte-specific.

45, I'm closer to MVA and to Alston than I am to Parker Poe (MVA shows their client breakdown to most anyone who cares to see; I've heard that they have a nice powerpoint that they show to folks who come on callbacks).

The rumors I've heard about CWT and Sonnenschein are not Charlotte-specific.

Have the rumors of layoffs at STB been confirmed?

49, because incoming associates are more profitable than under-performing 2d and 3d years. Also, I'm pretty sure many of the people being laid off either didn't meet their billables or pissed someone off along the way.

44/45 here (sorry ) - national firm...can't say more b/c "the man" is watching

46: please don't call Hofstra "HLS." It makes me feel less secure in my legal manhood and defames my Harvard degree.

25,

Fuck you! Don't post an asshole comment, then drag Georgetown's name into it.

53,

I am an A&O fourth year associate so of course I'm tired of "humor" from the likes of you and others.

Stop jerking off at the thoughts of the layoffs and start looking out for yourselves.

BTW, it's an old, old, joke. Using it shows that you are creatively impaired.

43 = drooling mongoloid with no sense of humor

50 - That makes it a bloodbath in general for UNC 2L's. Look at the hiring odds for any school outside the T14 to place in biglaw outside of their region.

So, 61, are you confirming A&O layoffs?

52 -- Because attorneys bring in money. Staff don't bill their time. Staff also make attorneys more efficient, but that might actually translate into even more billable hours on the back end.

All the same, it is a shame that they lost their jobs. I hope we can all join together in wishing them a soft landing somewhere along with everyone else who has been hit in this downturn.

Oh, and for all of the jerks who keep calling these firms TTT for cutting people, just remember that you're probably next because everyone hates you.

And you wonder why you're losing jobs?

======================================
Wall Street is plunging again, with the Dow Jones industrials down more than 500 points as investors agonize over the faltering economy. Stocks are down on a combination of disheartening economic data, including a big drop in retail sales and a Federal Reserve report that says tight credit conditions are hurting businesses across the country.

How's the recruiting going at KaTTTen?

25, you will be unsuccessful in most, if not all, facets of life.

Yes, 61, is that a confirmation? I am the one who accepted at A&O last week.

Is it better to be laid off by Allen & Overy rather than Katten?

What looks better on your resume?

The eternal conundrum.

CharloTTTe to 160k!

Does anyone know what to expect in terms of "severance" at A&O and Katten?

Hey, you have to be gentle with 61. He is only a fourth year. Let me try: Its ok, 61, you can tell us about the A&O layoffs. Go ahead, take a breath and let it all out. You'll feel much better.

49 here (not 52),

57 - you're aware that firms lose money on incoming associates right?

Why do you ask 72? Are you getting fired at both firms?

65
Staff does bill time frequently, especially in bankruptcy practice groups. They bill anywhere from 75-295 (as seen in the Lehman Bros. bky. case), with 95 being the average going rate for paraprofessionals.

FIRST!?

74, please do share the source of your reliable information on how firms lose money on incoming associates. Most firms write off about 10-20% of their billable hours, so if an incoming bills 2,000, the firm will collect on between 1,600 and 1,800 hours. Even at $150 an hour that's $240,000 minimum. How exactly is that a loss of money even taking into account benefits, social security, employment taxes, etc.? Oh, and the partners get a deduction for most of those expenses at the end of the year.

Does anyone know what to expect in terms of "severance" at A&O and Katten?

*nervously wrings hands while double checking resume for typos*

-nervous T-10 1L

78 please do shut up and go back to studying for your torts exam.

63 - UNC places fairly well in NoVA/DC and ATL, and good amount of folks have had success in the NE (NYC, Boston). UNC gets a decent amount of respect...top 10% has fighting chance anywhere, and top 25% has solid chance at biglaw in most markets. It's definitely a down year though.

Not a dissalution in the making. Plenty of firms still looking to break into the Chicago market, which has been traditionally tougher to break into than other places, such as, for example, San Francisco.

81, I'm pretty sure I took that exam 6 years ago. But good try.

65 - Concur with 75, staff do bill time to specific client matters. That's why they also get laid off. Or conversely, why clients call up to bitch about their excessive "administrative" fees, i.e., gchat.

Layoffs /= dissolution. Katten is very well managed and will be fine in Chicago (Charlotte on the other hand...).

Katten is also doing fine in NY. They just released the building space and are renovating.

I've been told the standard is in thirds - one third salary, one third expenses/overhead/benefits, one third profit to show if you're making the firm any money. If you're only bringing in 240k there is no way you're not a loss for the firm when you're making 160k plus bonus.

Katten is also doing fine in NY. They just re-leased the building space and are renovating.

63, 50 -- I'm a BigLaw Associate in NYC and know plenty of well respected UNC grads. Keep at it. There's always 3L interviewing.

I'm a UNC 3L with a federal clerkship. We've been placing well all over (CA, NY, Chicago, ATL, etc.), but it is definitely a down year.

What do laid off lawyers do?

Well there's always money laundering.....

http://www.evilesq.com

84, see 88. Also, please review your transcripts to ensure you did, in fact, matriculate into an accredited law school and graduate from same. I'm not convinced.

78: most firms allocate a portion of overall firm overhead (admin staff, share of a secretary and related expenses, utilities, LEXIS, office space, etc.) to each attorney. Those figures are much higher than you might think. My non-coastal firm (AMLAW second hundred) uses an overhead figure north of $150k. An associate who brings in 240k in revenue is certainly a losing proposition where I work.

83,86: Firms "were" looking to get into the Chicago market, they are not looking to get in Chicago now. Katten is a heavy RE firm, and is in danger in this market, like every other RE firm. Dissolution is a possibility here.

87: Katten is doing fine in NY as a product of its Rosenman legacy. Whether that is enough to save the firm is questionable. Leasing space doesn't tell you anything about the firm's health. Just ask the associates in Heller's Seattle office.

i am considering an offer with ropes and gray. will ropes remain stable in this economy and avoid layoffs?

96,

EVERYONE is at risk in the Biglaw environment.

Get used to it. If you get laid off, think of it this way -- it's an opportunity for you to explore new horizons.

~In house Counsel

will brett and ron be ok?

95: Katten has about 35 RE attorneys in Chicago out of a total of about 250. They will not fail simply because their RE group is down.

Firms don't make money off associates. You take a first year making 160k plus 40k+ bonus. Factor in their bar stipend and expenses, if any. Also consider that their first three months will be unproductive since most firms billing years start in January. You also need to add health costs to the firm, payroll taxes, office space, secretaries and support staff costs. I head that once you factor everything in the cost to a firm for one associate is over 350k.

Now do the math. A first year who bills 2000 hours, let's say 15% are written off so that's 1700 hours actually billed to the client. Of those 1700 hours not all will actually result in payment by the client in that fiscal year since some clients take forever to pay. So maybe the firm will actually re-coop 1500 hours worth of time. At a rate of say $300 an hour that's $450,000 the firm might take in.

So at the end of the day a productive associate generates 100k in profit for a large firm. That's nothing. Compare that to what a rainmaker partner brings in, $5 million, and you can see why firms and partners don't really care about associates. We're all replaceable and the difference between a productive associate and a under performing one are negligible financially.

100 - you had me until "re-coop"

If the difference between a productive and underperforming one is negligible, why bother with all the layoffs?

96 -- As a 2L waiting to hear back from Ropes I can confidently tell you that the firm is a sinking ship and you should send in your refusal immediately.

100 - your post demonstrates your lack of law firm economics, and accounting in general. Everyone thinks there are huge write offs, but I very much doubt a decent quality associate is having 15% of their hours written off. Also, 12% non-collections is higher than average. And... just because a bill is not collected in one year does not mean it won't be paid after the new year... accounting periods are important, but cash is king. And don't tell me its all about year end #s to get to bonus and partnership profits... the accounting year will include rollover from prior year, just as current bills will slip into next.

100 -- I don't agree with your math and you obviously don't get the concept of fixed costs. Let's do the math again, considering marginal cost. (1) the firm already has office space, (2) the firm already has copy center, assistants, etc. which are shared b/w 4-5 people anyway. Ok, so if you're a BigLaw 2nd year in NYC getting billed out at $400-plus at even 1500 hours, thats $600,000. Pay maxes out right around $200k, leaving (still) a $400,000 margin to cover health insurance, FICA contributions, etc. and your partners' kids' college tuition several times over. Works for me.

NOW, if you're working for a TTT with 2nd year rates at only about $200 and you're still trying to pay them NYC scale when they're only brining in $300k things get a lot uglier.

Why did regionals ever start paying so high? You've got me...and such is the problem we're all seeing. Alot less of a cushion for falling billables.

IT MAKES THE MOST SENSE, FINANCIALLY AND OTHERWISE, TO AXE UNDERPERFORMING PARTNERS FIRST.

Sorry for the caps, but I think that sentiment warrants it.

Because if you have a bunch of associates sitting around doing absolutely nothing then you are spending 350k a year on them and they are generating no revenue at all so you're actually losing 350k instead of making 100k for each associate. In Clifford case, if you have 20 litigation associates doing nothing then you are losing over $7 million a year. Might as well lay them off.

By unproductive associate I mean someone billing like 1700 hours a year.

This is a sad day for those hit by the layoffs, and for the firm, which is a great place that has always punched above its weight. To have started just over 30 years ago and to have almost 700 lawyers is some achievement.

Please get facts in order. Over 5 main offices in US and London office as well as sat. offices, Katten has just over 120 lawyers in real estate related industries. That is tax, finance, litigation, securities, foreclosure, etc as well as the dirt work. A number of these lawyers are not solely focused on real estate. So only about 80 lawyers in total focus solely on RE. Out of almost 700 lawyers.

This is a big story, but don't start spreading lies about a decent firm trying to do the decent thing by its lawyers, formwer associates, and clients.

108 - for transparency, in the future, please identify yourself as a member of Katten PR. Thanks for your cooperation.

Altheimer & Gray just released a bunch of people in Chicago today, too.

1st years don't make crap for a firm. Its the e.g. 5th years getting billed out at $550/hour billing 2400 hours a year that make a BIGLAW firm money. So what do firms do... continuously dump on said 5th year night, day and weekend and make them miserable until they quit to move to Florida to become a scuba instructor for $30,000/year. The firm then has to go on the market a hire a hit/miss lateral that it has to retrain and incorporate into the culture/group dynamic and hope said later might become valuable within a year but said lateral is probably trying just to squeeze another year of midlevel salary and bonus out of his new firm in order to pay off the last of his loans and then move to Florida to teach scuba diving. BIGLAW firm wastes resources again. Total mismanagement.

Under my law firm economic plan, jerk off 1st years would be paid $100K at most which they will gladly take with their $150k law school debt. Pay the 5th year $400K/year, plus a hefty bonus and make sure you keep them there by monitoring and spreading out their hours and thus limiting attrition. The firm will not have to rely on 2-3 seniors per group and a disproportionate number of 1st years that don't even know how to do a spell check or a global search for a certain term. Then said 5th year will not leave and move to Florida to be a scuba instructor. The firm will continue to make money. This structure will also put annoying ass, cold-calling headhunters with "unique positions at exciting international firm" out of business and the world would be a better place.

For all you grammar geeks who respond that I missed a comma somewhere, I didn't take time to proof so keep your "mark-ups" to yourself.

MVA is a really solid regional firm. Of all the remaining firms like it, I really thought they'd be the last to have to resort to layoffs... staff or otherwise.

Why do people keep calling these "layoffs"? Layoffs typically mean temporary discharges, mostly in the union context where the last person laid off will be the first person called back when business improves. I highly doubt Katten will be calling any of these associates back if and when things pick up. These are terminations, firings, being "let go". Not layoffs.

105: (1) the firm already has office space, (2) the firm already has copy center, assistants, etc. which are shared b/w 4-5 people anyway. -- the firms still have to allocate these costs to attorneys; the rent, staff salaries, lexis bills, newspapers, coffee, etc. still need to get paid for. Those costs, plus benefits, are over 100k per associate and probably much higher in elite NYC offices.

Maybe with the loss of Wachovia MVA will become less of a sweatshop. Their corporate side does not do huge m&a deals (or lots of them), they are primarily finance.

Boston's bleeding today. Hill & Barlow (Deval Patrick's old firm) let go a TON of senior partners. Testa has a 4:30 meeting, and people are on edge.

109, I am former Katten, many happy years, now in house. Been coming here for a long time. Do I need to sign off my comments with references to Herpes, or TTT, or that guys in my old law firm used ot make hard decisions about laying off good people due a shitty environment, and it was a big deal.

Not everyone hates the place they once worked at. Tool.

109, I am former Katten, many happy years, now in house. Been coming here for a long time. Do I need to sign off my comments with references to Herpes, or TTT, or that guys in my old law firm used to make hard decisions about laying off good people due a shitty environment, and it was a big deal. Does that make my point valid?

Not everyone hates the place they once worked at. Tool.

105 - the rent for that office space still needs to be paid.

Hey 111 - what do you have against scuba instructors with JDs? Haven't you read "The Firm?" There's clearly a need.

Hey 111 - what do you have against scuba instructors with JDs? Haven't you read "The Firm?" There's clearly a need.

There is absolutely no indication that A&B will be laying people off in Charlotte, not sure where that rumor came from.

117/118 - please hit the "post comment" button one time. Not two times, one time. Uno. Ein. Seriously, it's not difficult.

17/118 - please hit the "post comment" button one time. Not two times, one time. Uno. Ein. Seriously, it's not difficult.

111: That's a great plan and when you start your own firm you should try it and let us know how it goes. All other firms unfortunately have to live in the world of supply and demand and in times that do not involve a global financial meltdown and recession firms are aggressively competing for the law students that are coming over that three year, hard work, no income, $100,000 barrier to entry known as law school. Combine that with transparent pricing and the market moves to where it has to move. Firms were paying first years $100k at some point but then market forces caused them to decide to pay more because they wanted first years and that was the going price.

Though, I would actually love to see what would happen if firms tried to lower salaries for incoming first years.

Partners at my biglaw firm bill out for less than $550. But they still had to match first year salaries to compete for "top talent."

Ron and Brett are rockstars

Milton, Chadwick & Waters cut 10 IP litigators today.

Cage Fish just gave the whole corporate department notice that they should find other employment within 90 days.

Whitcomb Wiley has a meeting at 5....

100,

There are several flaws in your logic. First, just because certain clients take forever to pay doesn't mean they don't pay. There's no support out there that the delay in payment is anywhere near worth over 10% of a year's worth of billables. Even if the client takes a year to pay the bill, the value of that money goes down by the rate of inflation, which is not anywhere near double digits. Second, delayed payment affects everyone: associates and partners. Associates are not blamed for lack of on-time payment, the client is. Third, "productive associates" generate a lot more profit than $100,000 a year. 88 is right, productive associates usually make the firm three times his/her salary (base plus bonus), gross. Take away the salary and overhead costs, the firm should take a profit equal to what the associate takes home. So a 3rd year associate who makes $250,000 after bonus should generate that amount, at least, in profit for the firm. Your idea of a "productive associate" is just wrong. Fourth, firms value the genuinely productive associates more than just what they secure the firm in profits. Productive associates take off pressure from the partner. Strong and reliable associates generate partner trust and allow the partners to take on more work. Too many times people forget that partners need to rely on their associates.

I don't think 100 is a "productive associate.

117/118 - please hit the "post comment" button one time. Not two times, one time. Uno. Ein. Seriously, it's not difficult.

128,

So Ally McBeal is out of a job?

95. Katten is definitely having some trouble, but they are conservatively managed with little debt and none of the Sonnenschein-esque problems of too many lateral partners with guaranteed payments not generating any revenue. The Rosenman legacy is carrying the New York office, but the fact is, that is a very nice, stable bit of business. If things go even further in the toilet, are they at risk of dissolving? Yes, but so are a lot of other firms, I definitely would not put them anywhere near the Sonnenschein level of riskiness right now.

Katten is only laying off GULCers and Hofstra grads.

126, sorry to inform you that your firm is not biglaw if your partners are billing out for $550.

124/130 - that was funny the first few hundred times. Now it comes across as pathetic. Oh, it doesn't work when there are intervening posts. Toolbox.