With the dismal economy and the widespread law firm layoffs, we speculated last month that regular bonuses may be less than last year, and “special” bonuses would likely disappear. The New York Law Journal agrees with us, and suggests two other reasons for it:
The scale of the expense and the almost compulsory nature of the market are widely resented by partners. But they also realize bonuses play a huge role in associate morale, recruitment and retention. Most managing partners who spoke to the Law Journal about bonuses cited potential problems with associates in requesting anonymity. But this year they all also mentioned another interest group keeping a watchful eye on bonuses: clients.
So, reason one: If they give you a bonus, you might tell someone, um, like Above The Law. And reason two: pressure from clients to control costs. Anonymous firm leaders say they fear the effect a big bonus announcement would have on their fee negotiations with belt-tightening clients, especially those in the financial sector.
Orrick chairman Ralph Baxter notes that while Orrick will still pay bonuses, “performance factors, including billable hours, will reduce the number of associates at the firm” who actually get a bonus.
The article suggests that the dismal economy could provide the opportunity that some firms have been looking to escape the bonus bidding war, and eliminate associate bonuses all together. We know you’re worried. In a recent Lateral Link survey by Justin Bernold, one out of every thirteen respondents was unsure when, or if, bonuses would be paid. But as The New York Law Journal notes:
Of course, much will depend on what Cravath and Sullivan & Cromwell do.
As always, we welcome bonus news and memos via email (subject line: “Associate Bonus Watch”).
* Change you can believe in? It looks like Obama has recruited a few “washington insiders”: 8 of the 10 top lawyers he has hired for his transition team are veterans of the Clinton administration. [Bloomberg.com]
* After his hunt yesterday, Justice Antonin Scalia told a room full of big-time Texas lawyers that he disagreed with judges who used foreign law to interpret the constitution. [Houston Chronicle]
* “Protesters galvanized by a dragging death that has stirred memories of the notorious James Byrd case rallied twice outside an eastern Texas courthouse to speak out against a judicial system they consider racist.” [Associated Press]
* Are you ready for your close-up Mr. Rehnquist? The Hoover institution released files documenting Rehnquist’s first three years on the Court, years filled with land-mark cases like Roe v. Wade and United States vs. Nixon. [New York Times]
* California Attorney general is pushing the Supreme Court to decide the legality of Prop. 8. The Court could begin to act as soon as Wednesday, when they have their weekly conference. [San Jose Mercury News]
* Say it ain’t so! Washington regulators have finally opened up the doors on Belgian-based beer company InBev’s acquisition of Anheuser Busch, which monopolizes
50% of the US beer market. The merger will make InBev the largest beer company in the world. [Courthouse News Service]
* Sorry Ohio…President-elect Obama is probably going to wait a while before overhauling NAFTA. [Bloomberg.com]
Thelen attorneys in NYC and Hartford have a new landing spot. Robinson & Cole picked up 30 displaced Thelen attorneys. According to the Connecticut Law Tribune:
The move adds heft to Robinson & Cole’s construction, real estate, employment and finance practice groups, among others.
“It’s a smart move and good pick-up,” said Connecticut-based law firm consultant Peter Giuliani, but not one that challenges Day Pitney’s status as the leading law firm in the state.
Of course, the Robinson & Cole press release shows no signs of Pitney envy:
The addition of these accomplished attorneys to Robinson & Cole speaks to our strength as a regional firm and will add considerable value to expansion of our New York City office, expansion of our intellectual property practice, and the addition of a prominent construction practice, all goals of the firm’s strategic plan,” said Robinson & Cole’s managing partner, Eric D. Daniels.
Meanwhile, back at the artist formerly known as Thelen, the situation continues to be fluid and confusing:
“At this point it is every group for themselves and not a coordinated top-down plan,” said San Francisco-based Thelen spokesman Kevin Livingston. “Thelen really doesn’t exist anymore. I barely know what is going on in San Francisco.”
Heller Drone comes to the rescue of a disorganized Thelen response, after the jump.
The 10th Circuit had an ugly case on its hands last week. While all psychotherapy seems mildly sadistic, this case is especially bad.
Per Wikipedia, psychotherapy is supposed to “increase an individual’s sense of well-being and reduce subjective discomforting experience.” A Kansas couple running a home for the mentally ill had a slightly different approach. It involved a stun gun and mutual shaving of private parts.
[T]he Kaufmans forced residents to “perform sexually explicit acts and farm labor in the nude while maintaining that these acts constituted legitimate psychotherapy for the residents’ mental illnesses. Moreover, the Kaufmans billed Medicare and the residents’ families for the therapy.”
Investigators seized videotapes showing the schizophrenic residents masturbating and posing nude at Kaufman’s direction. “Eventually,” the 10th Circuit noted,”the Kaufman House developed rules that required some of the residents to be nude when engaging in certain activities–for example participating in group therapy sessions, eating dinner, and watching television.”
It’s like a twisted version of Green Acres. Psychotherapists Arlan and Linda Kaufman were convicted in November 2006 for “forced labor and holding clients in involuntary servitude.”
They appealed because the judge in the trial ordered them to avoid eye contact with the former clients who testified against them. The Kaufmans claimed this violated their constitutional right to confront their accusers.
The 10th Circuit “acknowledged the Kaufmans had ‘considerable support’ for their argument, but ultimately concluded their substantial rights were not violated.” They’ll be heading to prison for 30 years. On the upside, maybe they’ll discover some new psychotherapy techniques to add to their repertoire.
Amidst all the depressing talk of layoffs and cold offers, here’s a little mergers and aquisitions news to brighten your Monday: Even in a bad economy, the wedding machine grinds on. In fact, we’ve noticed a slight uptick in the number of registries at Neiman Marcus. So how bad can things be, really?
* Okay, restaurant workers are suing their employers. Do you hear that Biglaw associates? I want everybody to stand up, go to the window, and scream … (Oh who am I kidding? If we try to blackmail them, they’ll just push us out a higher window.) [Midtown Lunch]
* Could Randy Moss become a SCOTUS justice? It depends on which one you are talking about. [Holy Hullabaloos]
Here’s some (more terrible) news that we don’t want to get passed over just because it’s late on a Friday.
We are hearing reports that a number of associates will be laid off from Greenberg Traurig today. As we understand it, the layoffs are focused in the New York office and are being conducted right now. They hope to be finished before the close of business today.
The firm declined to respond to an immediate request for comment, but our tipsters report that the Real Estate practice group is going to be hit the hardest. The numbers are too varied from our sources to be able to confirm how many associates are being let go today.
In terms of severance, tipsters have confirmed that the laid off associates will receive a two month package.
The new firm motto of Greenberg is: “We’re Built for Change.” We hope the same can be said of their former real estate associates.
Thacher Proffitt and Wood has declined to comment on the latest reports coming out of their New York office, but we now have multiple tipsters that are reporting on layoffs in TPW’s structured finance practice group.
Today’s cuts appear to be directed at staff. Paralegals were informed throughout the day of management’s decisions.
Another tipster reported that attorney layoffs are expected to follow soon. They were expected by the end of the day, but as of this writing that does not appear to have happened.
These rumors bring together two forces most ATL readers are already aware of: the complete lack of structured finance work, and the difficult state of affairs over at TPW.
The knives have been out for TPW for months. Over the summer, they had to tamp down dissolution rumors. Then a potential merger with King & Spalding fell through. At the end of October, TPW abandoned its outpost in White Plains, NY.
Update (12/11/2008): Actually, as of this date, TPW and KS are still in talks (but not for a complete merger; KS may pick up roughly half of TPW’s lawyers).
Ed. note: The Asia Chronicles column is authored by Kinney Recruiting. Kinney has made more placements of U.S. associates, counsels and partners in Asia than any other recruiting firm in each of the past seven years. You can reach them by email: email@example.com.
Things have changed recently in Korea – a few of our US and UK client firms are looking, very selectively, for a lateral US associate hire. Until just recently, there was not much hiring like this going on in Korea, since US and UK firms started opening offices there. We have already placed two US associates in Korea in the past month at top firms. Most of the hiring partners we work with in Korea do not actively work with other recruiters.
If you are a Korean fluent US associate in London, New York or another major US market, 2nd to 6th year, at a top 20 firm, with cap markets or M&A focus (or mix), or project finance background, and you are interested in lateraling to Korea to a top US or UK firm, please feel free to reach out to us at firstname.lastname@example.org or email@example.com. Our head of Asia, Evan Jowers, was just in Korea recently, and Evan and Robert Kinney will be in Korea in a few weeks. We are in the process of helping several firms open new offices in Korea (a number of which are interviewing our partner level candidates) and also helping existing offices there fill openings.
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For most attorneys, time spent managing the books is a necessary evil at best. Yet it is undeniably a crucial aspect of running a successful practice. With that in mind, we invite you to view or download a free webinar by Above the Law and our friends at Clio to learn how to better manage your finances.
Take this opportunity to learn what it takes to streamline your accounting and get the most out of your time. The webinar agenda:
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Do not miss this crucial chance to optimize your accounting practices. Save time and get back to billing!