Records are being set this morning at Latham & Watkins. At 8:00 a.m. Eastern time, managing partner Bob Dell sent out an email announcing that the firm is laying off 190 associates and 250 staff. These numbers are on top of any “stealth layoffs” that may have previously occurred at the firm in the past year.
Four hundred forty employees — 190 associates, 250 staff — is, as far as we know, more than any one law firm has ever laid off (not counting dissolutions). Latham is also the first Vault top ten firm to conduct major layoffs.
But Latham is also setting another record, of a more positive nature. Consistent with what we reported yesterday, the firm is offering “a comprehensive separation package, including payment of six months salary (up to total severance of $100,000) plus six months of continued medical coverage (through August 31, 2009).” This is the most generous severance package that any major law firm has given departing employees (see this table).
That will definitely soften the blow. But one LW source has a question:
No mention on any partner shifts — did they really grossly overshoot the number of associates and staff they needed for the economy we ended up with, but nail the number of partners needed just right?
According to Dell’s email, the cuts constitute approximately 12 percent of associates and 10 percent of paralegals and support staff. One LW tipster, however, tells us that in terms of U.S. associates being laid off, the number may be closer to 20 percent.
The full email from Robert Dell, plus more, after the jump.
One Latham staffer is relieved that the reduction in force is finally underway:
I just want them to get it over with. People have been walking around like zombies for weeks, and nothing is getting done. The panic has literally paralyzed the entire firm. Senior associates, paralegals and staff (even the records clerks) have had the deer caught in the headlights look in their eyes for weeks and it just needs to end. I just hope they let enough people go today so they don’t have to revisit this again in 2 months. There needs to be some end of the fear for the people that survive today.
Most people came in early today to wait for the phone call to be summoned to the conference room. At 6 a.m., the office is pretty busy already. We all just hope it doesn’t drag out all day and that they make this as swift as possible….
No one wants to lose their job in this economy, but most of the associates I’ve spoken to feel the same way. We are all going drinking this afternoon, whether we survive the layoff or not.
Good luck to all.
Update (9 AM): There’s more coverage over at Am Law Daily, including Bob Dell’s statement that the LW severance is “quite a bit above the market,” a denial of “stealth layoffs” prior to these cuts, and this information about incoming first-year associates:
In addition to the layoffs, Latham is deferring the start date for the class of 2009 to mid-December. It also is offering all those in the incoming class the option to further defer start dates to October 2010. The firm will pay those who select this option $75,000; it is encouraging those lawyers to engage in volunteer or community service projects.
LATHAM & WATKINS — FIRM-WIDE EMAIL — LAWYER AND STAFF LAYOFFS
From: Robert Dell (SF)
To: #ALL L&W PERSONNEL
Sent: Fri Feb 27 08:00
Subject: Executive Committee Announcement
To: All Personnel
From: The Executive Committee
It is with deep regret that we are announcing and implementing today a layoff of associates, paralegals and staff, which will affect approximately 12% of our associates (190) and 10% of our paralegals and staff (250). Everyone who is directly impacted by this workforce reduction will be notified personally today, and will be offered a comprehensive separation package, including payment of six months salary (up to total severance of $100,000) plus six months of continued medical coverage (through August 31, 2009), as well as other resources to support this transition.
We deeply appreciate the many valuable contributions and committed service of those affected by this decision. We made this painful decision with great reluctance and only after concluding that demand for legal services in this troubled economy will not provide enough work for all of our attorneys. Needless to say, the depth and duration of this recession could not have been anticipated. While our diversified practices and global platform continue to provide us the stability and strength to navigate these unprecedented global economic conditions, our structure was built to serve even greater demand based on the significant and steady growth we experienced before the rapid onset of this global recession.
While this brief email announcement is not an ideal form for communicating this type of decision, it is the only realistic way for a firm of our size to inform everybody directly and at the same time. For now, we ask everyone to respect our process so that our friends and colleagues affected by this decision can be notified personally, and to give them the support and understanding they deserve.