McKee Nelson Lays Off 32 (17 Attorneys, 15 Staff)
Today’s firm-wide meeting at McKee Nelson did not yield good news. A statement from the firm reveals the extent of the bloodletting:
This morning, McKee Nelson LLP laid off 17 of its corporate/finance associates, reducing this practice from 94 to 77 attorneys. The layoffs are concentrated in the MBS, ABS and CDO parts of our capital markets practice.Our firm also laid off 15 administrative staff. All of the affected attorneys and staff members are in good standing at the firm. None of these layoffs are performance based.
At least the firm was honest about the reason for the layoffs. No stealth layoff / performance review rhetoric from the firm partners:
For the past 16 months, the partners of this firm have been committed to bearing the costs of the overcapacity in our structured finance group in order to keep our team intact. The devastation that befell the credit markets in September, however, was unprecedented. We have analyzed and created a projection of what we believe the structured finance business will look like over the next two years and what resources, capabilities and experience will be required to do that work. This layoff is a necessary part of the firm’s adjustment to this new reality.
More details after the jump.
A tipster reports some additional information:
[William Nelson] said the firm has absolutely no debt and a $50 million credit line, and he said we are working on starting new practice groups and growing.
Apparently there was just not enough work to support the ABS and CDO practices.
McKee Nelson insists that their financial position is still strong.
Update (2:30 PM): Word on the street is that the affected lawyers are being paid through the end of February (i.e., almost four months) — a generous severance package. They will have access to work email and voice-mail until the end of the year, but they have to collect their belongings from the office — and stop reporting to work — by November 10.
Update / Correction (3:15 PM): This is the official statement from the firm regarding severance. What we reported previously was correct except as to the last day in the office:
Severance package is as follows: Pay and health/dental benefits until the end of February, career counseling, email and voice mail through year end, and departure date by November 14.
The full McKee Nelson press release appears below.
McKEE NELSON — PRESS RELEASE — LAYOFFS
This morning, McKee Nelson LLP laid off 17 of its corporate/finance associates, reducing this practice from 94 to 77 attorneys. The layoffs are concentrated in the MBS, ABS and CDO parts of our capital markets practice.
Our firm also laid off 15 administrative staff. All of the affected attorneys and staff members are in good standing at the firm. None of these layoffs are performance based.
This decision was not made easily, and we are saddened that this layoff is necessary. For the past 16 months, the partners of this firm have been committed to bearing the costs of the overcapacity in our structured finance group in order to keep our team intact. The devastation that befell the credit markets in September, however, was unprecedented. We have analyzed and created a projection of what we believe the structured finance business will look like over the next two years and what resources, capabilities and experience will be required to do that work. This layoff is a necessary part of the firm’s adjustment to this new reality.
McKee Nelson remains financially sound. Our litigation/enforcement and tax practices are thriving and are experiencing strong demand. Our structured products practice, which includes equity and muni derivatives, as well as state and local government finance, is also doing well. These three areas comprise 65 percent of our firm’s lawyers. The firm is debt-free and well-capitalized, with a strong balance sheet. Our real estate fixed expense is far below 10 percent of revenue, which is considered a measure of financial health.
Even after this reduction, McKee Nelson will continue to have one of the largest, most robust and experienced capital markets practices in the country. We are committed to participating actively and constructively in the vital project of reforming and reestablishing healthy, transparent and reliable capital markets.
On behalf of the entire partnership of McKee Nelson, we wish our colleagues well. We are proud to have been associated with them.
— William F. Nelson, Esq. and Reed D. Auerbach, Esq.
Co-Chief Executive Officers
McKee Nelson LLP
New York, NY/Washington DC
Earlier: Mystery Meeting at McKee Nelson
(97) 
Comments
first - i still use their chapstick
Good time to be a gov't lawyer, eh?
Not gonna work there.
these pretzels are making me thirdsty
Good luck to those let go. These are sad times.
To the Editor: Could you please insert a colon after "32" in the title of this piece?
McKee's chapstick is good, but Linklaters' vanilla-flavored stuff is even better.
linklaters is lined up next
Once again, can ATL publish a layoff chart listing the known/admitted layoffs by firm for '08? Keeping track of the flood of firings is not easy without one.
Guys at my high school used to put on chapstick all the time. It was no big deal.
To the Editor: Could you please insert a colon after "32" in the title of this piece?
So unfortunate for those affected by the RIF. Hopefully, they will soon land on their feet.
Ouch.
any news on what classes the lawyers came from?
seems like McKee did it in about as classy a way as you could do it...
sucks though...
To poster #7/11: Could you please insert a 32" piece of salami into your colon? TYIA
@9...Elie not know how make charts...only cut and paste WSJ articles.
YOU PIECE OF SHIT MYSTAL! You have ruined this site...and don't let the web traffic fool you that has to do with the blood letting and dissolution...but you are a scummy scrub.
oh great... first McKee, next up SkaTTTen DC. we are fucked
What does MYSTAL stand for ?
Here is some information that is not in the WSJ Law Blog post:
"Update (2:30 PM): Word on the street is that the affected lawyers are being paid through the end of February (i.e., almost four months) -- a generous severance package. They will have access to work email and voice-mail until the end of the year, but they have to collect their belongings from the office -- and stop reporting to work -- by November 10 (a week from today)."
Can someone please explain with MYSTAL stands for?
New Jersey bar results are out:
http://www.njbarexams.org/Result/all.htm
well...my career services meeting was discouraging. they basically told us not to expect 1L firm jobs. not only did the career services dean tell us this once, but on five separate occasions.
*starts drinking to wash away my jobless sorrows*
-nervous T-10 1L
email job leads to nervoust101l@yahoo.com (i need them now more than ever)
Hey nervous t-10 1L -- Please, for the good of your family and the world in general, please contract aids, catch a cold, and die.
ATL should do a stealth layoff of everyone named MysTTTal.
This site has needed someone like T-10 1L ever since L2L quit posting. Imagine the misery when those Spring OCI rejections start rolling in.
Were all the layoffs in their NY office?
Sounds like the only growth areas are structured texting and unsecured IMing.
$10,000 and a weekend with Kash in the Catskills retreat of your choice to the first person to bring me T-10 1L's mouthbreather head on a stick.
CLS3L
Confidential to Nervous T-10 1L:
Quit wallowing in self-pity that you won't make $3000/week. Do what truly motivated people do and bust your butt to get any job with legal experience, paid or unpaid. That is what 1L summer is for -- trying to figure out what kind of law you want to practice, starting at the bottom of the ladder, and working for no money in order to get experience that will later on assist you in getting a paid job. Jesus Christ what is with the youth these days?
Grammar nazis are uncool.
8- why would linklaters be lined up next??
The real news came out last night, when the BCS rankings confirmed that THE TIDE IS #1
RTR, Roll Saban.
Good luck to everyone affected. As a fellow big-law layoff victim a few months ago, I can confirm that it's really hard out there (especially for those with mortgage-backed securities experience!). You might have to do something that isn't your "dream job" for a few years while you wait for things to pick up again. It sucks, but that's the deal at the moment.
*currently working on Civ_Pro_Outline_Volume_33.doc while others hate on me on abovethelaw.com*
-Nervous T-10 1L
If Alabama were a state it would be Texas. Fat, stupid, and completely devoid of class and hygiene.
We don't care you TTT-110 #1Loser
34. Try the feds. Decent hours, benefits, and lots of job security.
30: what if i took 30k from your paycheck right now? because that's what i feel like after going to that meeting. obviously i can work hard at some non-profit or judge's chambers 1L summer but i would much rather work hard for 3k/week at a firm, who wouldn't? spare me your anger just because i want to get paid this summer.
*goes back to drinking*
-nervous T-10 1L
email job leads to nervoust101l@yahoo.com
34 -
If the implication is that MBS was a "dream job," then I would love to meet you in person. Maybe, say, over a friendly game of Dungeons and Dragons?
34 -
If the implication is that MBS was a "dream job," then I would love to meet you in person. Maybe, say, over a friendly game of Dungeons and Dragons?
What is the hippest neighborhood in NYC to get a sublet for the summer?
-2L with summer associate gig lined up.
21 - read the byline and then pat yourself on the back for your powers of observation.
2L-
Harlem. Seriously.
i'm nervous that everyone on ATL hates me
*goes back to drinking*
-nervous T-10 1L
email job leads to nervoust101l@yahoo.com
Has everybody heard that the bird is the word?
30 just got TOLD by nervous t10 1L!
*snaps fingers*
Everyone's heard about the bird.
Thanks for the email nervous T-10 1L; I hope that you will not mind that some Nigerian associates of mine will contact you with some business opportunities?
This firm clearly had someone with a brain managing the news release, unlike just about every other firm to date. Kudos on calling a spade a spade, controllilng the story well, and not bullshitting everyone into thinking it was performance based.
Best of luck to those impacted.
i'm nervous that everyone on ATL hates me
*goes back to drinking*
-nervous T-10 1L
email job leads to nervoust101l@yahoo.com
we gotta know what classes these people come from. if they're first or second years, that's really shitty. if they're older, they'll have (or should have) the skills necessary to go somewhere else and hit the ground running. regardless, good luck. this is a real hurricane we're in now, and it isn't letting up.
41-
Canarsie. Enjoy your summer.
41 - Hoboken. The PATH train is the the party train.
Nervous -- the point is that there will not be any 1L jobs this summer for you to have. I'm sorry. In order to set yourself up for 2L OCI, you have to be willing to sacrifice a little money for future success. Did your law school promise you loads of cash this summer? Did your career services promise you a 1L job? I doubt it.
I actually feel sympathetic to you to a certain extent -- but when hardworking lawyers are being laid off left and right, your sniveling about how you might not make 30k this summer is just completely devoid of perspective.
21 - Food, beer, and not proof reading.
If Queens is good enough for Prince Akeem of Zamunda, it is good enough for a 2L.
"McKee Nelson remains financially sound."
You can't say that with a straight face.
As a follow up to #34, in all seriousness, are those who have been laid off looking at government work? Public interest? Switching cities? I too have seen that there isn't much out there in the securitization/capital markets/general corporate area. Also, switching to another group does not look very promising either.
Any information re: 2008 bonuses? Can ATL make some calls? This would be helpful information.
59 and 60---Your bonus is that you are still employed.
Isn't stealth lay-off better for the affected associate seeking a job at another firm? What's better for an associate--applying for a job at another firm when everyone knows that the associate's firm laid off or is laying off a bunch of associates or applying for a job at another firm when the "word" of the lay-offs has not yet hit the streets? Isn't it better appearing as if one is seeking a lateral move rather than as if one is desperate because one is out of (or about to be out of) a job? Just curious.
i'm nervous that everyone on ATL hates me
*goes back to drinking*
-nervous T-10 1L
email job leads to nervoust101l@yahoo.com
I hear Kirkland & Ellis has had several stealth layoffs in their NY and Chi offices both. Can anyone confirm?
61,
A "stealth" layoff means the firm has fired an associate ostensibly for performance reasons, but the true reason was economic. In terms of finding a new job, I think most associates would rather tell prospective employers they were let go because the old firm had economic problems, not because they sucked and couldn’t cut it.
I love ATL because I get to hear about all these firms I've never heard of before. "McKee Nelson," "Locke Lord," etc.... it's like watching a movie with a made up law firm.
I'm not aware of stealth layoffs, but I know there were a few performance-related ones. I don't think this is any different from any other year.
K&E Assoc.
66, there were more than a few.
39 - i totally hate you. you stole my joke.
3:39 is right. When you are the victim of a stealth layoff, your departure is papered with a negative performance review.
When you interview as a lateral, you will be asked about how your performance reviews were. You could try lying about it and saying they were great.
But that is dangerous, especially if you get asked for references. It is better to be the victim of a layoff that even the firm admits is economic.
A cold, frosty beer for #56 for making me laugh.
So were these "corporate" and "finance" attorneys or really "structured finance" attorneys?
No first years were laid off, but I think one or two second years might have been axed. I also think most of the cuts were in NYC.
66,72 -- you must work in K&E's public relations dept, -- there were way more than "one or two"
I haven't heard of anyone being asked to leave K&E NY for any reason other than they really suck and can't cut it here. If you're good and your dept happens to be slow, they'll keep you around.
K&E NY partner
E-lee,
please do a post on K&E's stealth layoffs. investigate.
I think "nervous T-10 1L" is just "trying to create a gimmick" so he can "become known on ATL" and use that cheap fame to "compensate for bad grades." I shall henceforth ignore his/her existence/stench.
74 - YOU really suck
51 has it bass ackwards. 1st or 2nd years will go to a lesser firm within the severance period. They will take a prestige hit and maybe a pay hit. They will be fine. Fifth and sixth years with nothing but MBS on their resume are screwed big time. One might think that someone with five years of negotiating complex agreements and such would be valuable, esp if willing to take a class year hit. But I know a bunch of these people and, believe you me, most of the midlevels being let go are going to be doing contract work. Five years of MBS is resume poison. Trust me.
But McKee is at least being honest. Give them that.
Mature, 77.
i'm nervous that locke lord won't be around next year to hire me
*goes back to drinking*
-nervous T-10 1L
email job leads to nervoust101l@yahoo.com
King and Spalding ATL defections to Nixon Peapody. I think the Atlanta office is a sinking ship.
Mayer Brown is next with the layoffs!
Props to McKee Nelson: 4 month severance and no claim layoffs were performance based. I hope every firm starts to handle things this well.
My heart goes out to the associates though - hopefully they will find something quickly.
Are these lay-offs really not performance-based? You would think that when someone has to go, they would cut the dead weight first. I'd be interested to know whether the people laid off were underperformers, or whether there were some real surprises in the attorneys let go.
Mayer Brown is a toilet.
I generally agree with you 84. Or had always thought that until now. I think times are so bad that even if you have a "star" in MBS, you can't move him to another corporate group because THERE IS NO WORK right now.
consolidated layoffs list:
http://www.law.com/jsp/tal/PubArticleTAL.jsp?id=1202425647706
Wow! I thought Kirkland was supposed to be one of Chicago's best firms. Are stealth layoffs confirmed?
Mayer Brown is headed for destruction
http://www.law.com/jsp/tal/PubArticleTAL.jsp?id=1202425640058
What I don't get is even if these layoffs are not performance based, how does a firm pick the people to let go. Does it start with least hours? People who no partner can vouch for because they haven't forged any solid relationships, i.e. not good at networking? Last in first out in terms of laterals, etc.? Random? I understand that people aren't given the spiel about how their work product has worsened in the past 6 months (which happens to coincide with the general slowdown) but there has to be some criteria and I would assume performance is in some way involved.
88- I am in Kirkland Chicago and have not heard of any, and am pretty sure that there have not been any in my department.
Given the portion of Mckee Nelson's business that is no more, shouldn't the entire firm just fold sooner or later?
90:
Some firms engaged in stealth layoffs are actually getting rid of associates who have sufficient hours for year end performance bonus payment. They are shit canning them so they don't have to pay the bonus and "giving" the work they were doing to non-equity partners who have no work. Some firms actually have told certain associates who have not been fired yet to stop billing so that they don't reach bonus hours this bonus period.
Low class, but reality.
And yes, some very good lawyers are being canned because they have been doing the work that less diligent non-equity partners have not been doing. Theses associates have been hustling the hours from the few partners with work. Now these non-equity partners have reached the point that they will actually work if it means "saving" all of the salary and bonuses of the associates that have been shit-canned.
amlaw 200 layoff list
http://www.law.com/jsp/tal/PubArticleTAL.jsp?id=1202425647706
90, actually I think the last in, first out regarding laterals is the opposite - the firms that picked up lateral associates over the past year picked them based on need/practice area growth and the lateral's past performance. I would think a firm would be more likely to get rid of a poor performer who had been there since the summer program over a lateral they hired to fill a specific need and who had a good record.
93 - Really!! Firms are essentially sabotaging attempts at making minimum billables? And firing associates with high billables? wow. Care to drop names? Thanks.
Elie,
How about a discussion of practice areas that are still doing ok.
Thanks.