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Nationwide Layoff Watch: Texas is Starting to Look Like It’s Part of America After All

Thursday, March 12, 2009 3:05 PM - By Elie Mystal

Baker Botts logo.JPGWell, it appears Texas is starting to feel the burn of the global economic recession. And that is not good news at all. We received word from Baker Botts today that the firm has decided to fire attorneys. This is from a firm wide email that just went out:

We initially hoped that by imposing a hiring freeze last year, we would be able through attrition to match staffing levels to the business environment. The recession has been so deep and long lasti ng, however, that we regrettably have also had to reduce our lawyer and staff levels through selective layoffs, particularly in those areas most impacted by the reduction in demand. This has been a painful process for all of us involved. The individuals affected by these reductions are our colleagues and friends, and they have performed admirably for the Firm and our clients over the years.

The memo does not contain the overall number of people the firm will be letting go. Our sources tell us that the cuts will affect “around 30” attorneys. We don’t have any information on how deep the staff cuts will be. There is also no word on how these layoffs will affect incoming first years.

But don’t get us wrong, just because layoffs are coming to Texas, doesn’t mean that Texas isn’t maintaining its Texas sized sense of pride:

Back in 1933, when the Great Depression was at its peak, many who worked at the Firm feared what the year had in store for them. In January of that year, then-Managing Partner Walter Walne wrote a memo to partners dedicated to that topic. The closing paragraph of that memo is timely, relevant and speaks eloquently across the decades about who and what we are at Baker Botts:

“With the character and ability possessed by each person in the organization; the splendid spirit of cohesive team work that we know exists; the inspiration that comes from the efforts and lives of those who have gone before; the idealism which our creed and our traditions instill, we face the new year resolutely and with the assurance that in our hands the standard of this institution will not be lowered and that our forward steps will not falter.”

We date our Firm’s origins back nearly 170 years, to just after Houston was founded and when Texas was still a nation, not a state. We have been through the U.S. Civil War, two World Wars, the Great Depression and countless recessions, and together, we will get through this.

Update (4:19): We are now getting reports that Baker Botts is offering a three month severance package, but associates have to pack up and leave by tomorrow night. It looks like most associates were prepared for the news when the arrived to work this morning. According to a tipster:

When I go to work this morning and noticed that we were losing our free parking, I knew we were in or a long day.

Read the full statement after the jump.

BAKER BOTTS — MEMO — “FACING CHALLENGES IN 2009

As 2009 progresses, there continues to be much uncertainty about where the national and global economies are headed. What we do know is that businesses around the world have been challenged to respond to the effects of a recession that is of unprecedented depth and breadth. Many of our clients are struggling to deal with these challenges, and I am sure virtually all of us have friends or family members who have been affected as well. No one seems to have good visibility into when the recession will end, but most economists are now suggesting that it will last at least until 2010, and that the recovery may be very slow.

I believe the Firm entered this recession as well-positioned as any major law firm anywhere. We have a diversified practice. It is focused on our clients and their businesses rather than a single practice area or financial product. Our offices are strategically located to be responsive to client needs, and we have a reputation for client service=2 0and excellent lawyering that is second to none. We also have a strong balance sheet and a conservative approach to our financial affairs. But we are learning, as are other law firms and service businesses around the world, that we are not immune from the effects of the recession.

Just as our clients are struggling with budget cuts and a reduced demand for their products, so too has the overall demand for our services declined. This decline began in the fourth quarter of last year, and while certainly not threatening the long-term viability of the Firm, is nonetheless significant. It definitely is not “business as usual,” and our review of the situation and the responsive actions we believe are necessary will be ongoing throughout the year.

In connection with our budgeting efforts this year, we looked hard at all aspects of our business and reduced expenses wherever possible, while at the same time keeping an eye on not compromising our ability to provide excellent lawyering and client service. I know many of you are already beginning to feel the effects of these reductions, and I ask for your support and good will as we work through these issues. We initially hoped that by imposing a hiring freeze last year, we would be able through attrition to match staffing levels to the business environment. The recession has been so deep and long lasti ng, however, that we regrettably have also had to reduce our lawyer and staff levels through selective layoffs, particularly in those areas most impacted by the reduction in demand. This has been a painful process for all of us involved. The individuals affected by these reductions are our colleagues and friends, and they have performed admirably for the Firm and our clients over the years.

We are committed to treating all of our employees with fairness and dignity during these very difficult times. I recognize that many of you may be facing financial or other difficulties, and I want to take this opportunity to remind you of services available to you:

* All of our offices are dedicated to providing assistance to employees in their time of need. Please contact your local Partner in Charge or Director of Administration should you have emergency needs.

* We have a very successful Employee Assistance Program (EAP) that is available to every employee. This free and confidential benefit is designed to help you deal with the everyday stresses of life.

Back in 1933, when the Great Depression was at its peak, many who worked at the Firm feared what the year had in store for them. In January of that year, then-Managing Partner Walter Walne wrote a memo to partners dedicated to that topic. The closing paragraph of that memo is timely, relevant and speaks eloquently across the decades about who and what we are at Baker Botts:

“With the character and ability possessed by each person in the organization; the splendid spirit of cohesive team work that we know exists; the inspiration that comes from the efforts and lives of those who have gone before; the idealism which our creed and our traditions instill, we face the new year resolutely and with the assurance that in our hands the standard of this institution will not be lowered and that our forward steps will not falter.”

We date our Firm’s origins back nearly 170 years, to just after Houston was founded and when Texas was still a nation, not a state. We have been through the U.S. Civil War, two World Wars, the Great Depression and countless recessions, and together, we will get through this.

Thanks to all of you for all that you do, for each other, the Firm and its clients.

Walt Smith

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Posted in: Baker Botts, Layoffs, Texas

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