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Nationwide Layoff Watch: Townsend and Townsend and (a Smaller) Crew

Wednesday, April 8, 2009 6:03 PM - By David Lat

Townsend Townsend Crew LLP Abovethelaw Above the Law blog.jpgIn these dire times, there are few refuges from the storm. Even the world of intellectual property is not immune to the downturn.

Today Townsend and Townsend and Crew (no ampersands), a prominent intellectual property firm, announced layoffs: 16 attorneys, 45 staff. Here’s an excerpt from the memo, issued by firm chairman James Gilliland, which contains discussion of the broader market for IP work:

We have resisted for as long as we reasonably could the worldwide economic forces buffeting our clients and our profession. However, after much long and careful deliberation, Townsend today has joined so many other AmLaw 200 firms and implemented a reduction in force. This is the most painful decision any of us has ever had to make at this firm.

As you know, Townsend expanded rapidly over the past few years to meet our clients’ burgeoning need for IP services. By the fourth quarter of 2008, however, those clients began scaling back their spending because of the enormous financial uncertainty they faced. Likewise, in the first three months of 2009 new patent filings in the PTO, and new file openings at Townsend, have both declined. While our clients continue to innovate, and continue to call on Townsend to protect their most significant innovations, our optimistic projections for the future now must be moderated.

Back in January, Townsend announced a salary freeze, noting that “all of the economic indicators for 2009 remain negative.” Today’s layoffs suggest that the situation is not improving.

Of course, Townsend still has some work. For example, they’re representing engineering and construction giant Bechtel in a trademark infringement suit. But it takes a lot of work to sustain the workforce of an Am Law 200 firm with seven offices around the country.

Read the full memo, after the jump.

Back when Townsend raised starting salaries to $160,000, they mentioned their consideration of a multiple-track system. The pay raise memo noted that “continuing to trade more hours worked for higher compensation is unhealthy and unsustainable in the long run.” Was the observation prescient?

Here’s the memo.

TOWNSEND AND TOWNSEND AND CREW — MEMORANDUM — LAYOFFS

April 8, 2009

Dear Friends,

We have resisted for as long as we reasonably could the worldwide economic forces buffeting our clients and our profession. However, after much long and careful deliberation, Townsend today has joined so many other AmLaw 200 firms and implemented a reduction in force. This is the most painful decision any of us has ever had to make at this firm.

As you know, Townsend expanded rapidly over the past few years to meet our clients’ burgeoning need for IP services. By the fourth quarter of 2008, however, those clients began scaling back their spending because of the enormous financial uncertainty they faced. Likewise, in the first three months of 2009 new patent filings in the PTO, and new file openings at Townsend, have both declined. While our clients continue to innovate, and continue to call on Townsend to protect their most significant innovations, our optimistic projections for the future now must be moderated.

As a result, today we have informed sixteen attorneys and forty-five members of our staff that their positions are being eliminated. Individuals in all seven of our U.S. offices are included. All have been offered severance benefits and outplacement services. The individuals affected are valued, talented, people who are both our colleagues and our friends. Some have been with Townsend for a few months, some for many years. All will be missed. Please help and support them in this difficult time.

Tomorrow, April 9, 2009, Maureen Sheehy and I will hold a videoconference to provide further information and respond to any questions you may have. It will be held at 1 p.m. Eastern, 11 a.m. Mountain and 10 a.m. Pacific time. We appreciate your encouragement and assistance as we work to maintain Townsend as a stable and healthy firm during these turbulent times.

jim

Construction Giant Bechtel Sues Alleged Copycat [The BLT: The Blog of Legal Times]

Earlier: Nationwide Pay Raise Watch: Townsend Goes To Town

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Posted in: Intellectual Property, Layoffs, Townsend and Townsend and Crew

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