We’ve received a ton of comments and many tips that “stealth” layoffs are happening at Kaye Scholer. One commenter claimed:
[S]ince last summer, by my count at least 8 associates left voluntarily, as did 5 paralegals. An additional 8 associates were laid off and 4 paralegals were laid off with them. It seems to me that the fact that none of these paralegals were replaced, coupled with the fact that the only new blood brought into the department were the new 1st years in 2007 and again in 2008 shows that perhaps its the partners that are “dead wood” and not the people that worked for them.
Another commenter offered these numbers:
I was in the RE practice group. The breakdown of who was let go is as follows (and this does not include those that left voluntarily because they anticipated the coming of Armageddon). Class of:
2006 – (2)
2005 – (2)
2004 – (1)
2001 – (1)
1998 – (1)
Counsel – (1)
and at least 5 paralegals were let go.
I anticipate that the class of 2007 is next to be “reduced,” as there are now no remaining people out of the 5 associates from the class of 2006 and only 1 out of the 4 associates of the class of 2005.
A tipster put it all together like this:
This doesn’t even include those in corporate that were let go… The lit associates, some of whom billed close to 3000 hours last year, have absolutely no work, and are not going to even get close to the 2000 hours needed to make first tier bonus. Word going round is that there will be a mass round of layoffs for the lit people that didn’t get snipped after the first round in May.
What exactly is going on at Kaye Scholer? A response to the rumors by managing partner Barry Willner, after the jump.
We brought all of our information to the attention of Kaye Scholer managing partner Barry Willner, including the repeated allegation that Kaye Scholer has cut a third of its real estate associates. He offered the following response:
Like many other law firms and most businesses, our personnel policy includes substantive reviews of all of our associates in each of our departments and offices on an annual basis and on a semi-annual basis for those associates who have been with our firm for two years or less. As a result of our review process, those associates whose performance is found to be below our standards are asked to leave the firm.
While we are obviously mindful of the difficult economic situation affecting all of us, we have no current plans to engage in layoffs or other terminations outside of the normal course of our business. Thus the number of lawyers at our firm remains constant with last year. For example, and to specifically address what appears to have triggered your inquiry, the number of associates in our Real Estate department remains the same as last Fall.
In the midst of Tuesday’s layoffs, White & Case revealed the problem that is facing many firms:
These reductions are being driven in large part by a decline in attrition rates.
The law firm business model is not unlike a pyramid scheme. You need a large number of inexpensive juniors at the bottom to support a small group of “winners” at the top. In good times, people who are not going to make it to the top leave before they get too expensive. In the normal course of business, they go in-house or to smaller firms, or leave the profession entirely. But that is not happening right now; everybody who has a Biglaw job is trying to keep it. So the firms are being forced to get their hands dirty and make the cuts “manually.”
This is why, as one of our readers is fond of saying, “no one is safe.” Of course “associate head count numbers” are going to remain the same at most places. What is happening is that firms are replacing expensive mid-level and senior associates with relatively low-cost juniors.
Attrition is not happening. In its place, we’ll either see performance reviews or layoffs, but maybe neither term is accurate?
“Forced attrition” is happening, and sadly we expect it to continue until the economy turns around.
Earlier: Kaye Scholer to More Cowbell
Nationwide Layoff Watch: White & Case Brings Layoffs into the Vault Top 20
