We’ve been hearing reports all morning about some news leaking around the offices at Shearman & Sterling. One tipster collects the potentially bad news in a clear way:
[M]id and senior-level associates that would in normal economic conditions have left any way are being asked to leave. In addition, Shearman’s senior management has advised Partners to be strict in reviews in the upcoming review process (scheduled for the coming weeks) for all levels of associates (not only mid- and senior-levels).
Apparently, the firm is determined that any layoffs get reported as “performance based” attrition rather than full-on layoffs. Sources suggest that firm leadership is still smarting over the reputation hit they took when they laid off people, back in 2001.
The firm has not responded to a request for comment.
Whatever they want to call it, there seems to be good reason for Shearman associates to be worried over the next couple of weeks. We’ve also learned that Shearman’s Capital Markets practice is not doing well. A tipster reports:
Business in Capital Markets has slowed dramatically over the past several months. Junior associates from Capital Markets have been temporarily staffed on litigation matters.
We know that Capital Markets practice groups are slow all over. But staffing corporate attorneys on litigation work suggests that there are larger problems with Shearman’s corporate practices.
Stealth layoffs at Loeb & Loeb, and the firm’s response, after the jump.
One tipster reports that Loeb & Loeb is also trying to stay under the radar with their layoffs:
The NY office of Loeb & Loeb LLP has conducted stealth layoffs [last] week – at least 4 attorneys – less than one week’s notice for attorneys, with as little as one month’s severance and no other benefits.
The firm did not respond to a request for comment. But as we understand it, Loeb & Loeb paralegals took the brunt of the layoffs.
The Loeb attorney layoffs sound small — four or so attorneys could just be cutting “underperforming” associates instead of stealthily scaling back in response to the economic crises. But the one month severance package seems cheap. If they were laid off last week, one month doesn’t even take them through the holidays.
Look out for yourself and your friends. But do not trust to hope, it is forsaken in these lands.
Update (5:24): Loeb & Loeb offered this explanation about the layoffs reported above:
As part of Loeb & Loeb’s periodic attorney evaluation process and assessment of its overall personnel needs in its various practice areas, eight associates firmwide were notified that they were being let go. All employees receive a standard severance package, which depends upon length of service. We continue to actively recruit, hire and invest in the firm’s core practice areas and in the past three months alone we have hired 13 associates, including 9 first-year associates, and 3 lateral partners. We expect to have a higher attorney head count at year end than at the beginning of the year.
So the firm is sticking to their performance-based reasoning. We’re not entirely sure what the “standard” severance package is, but it does sound like at least some of the associates that were let go could have a very light package.
Update (Tuesday, 11:37 a.m.): Shearman responds to some of the rumors here.
Earlier: Prior ATL coverage of law firm layoffs.