Stealth layoff rumors have been swirling around Shearman & Sterling for months. We’ve reported on the quiet cuts before. But today, it looks like the firm cut a little too deep to keep it under the radar.
Shearman & Sterling has not responded to our multiple requests for comment, but several sources independently confirm that Shearman is laying off roughly 5% of its litigation associates and some associates in other practice groups.
According to our sources, all of the cuts are coming in the guise of an April performance review:
Shearman & Sterling has started another round of “reviews.” These reviews are resulting in so-called merit-based probations and firings and do not seem to discriminate by class year.
Generally, litigators have been more safe than their corporate brethren. After the jump, we try to explain why Shearman is disproportionately firing litigators now.
Quite simply, litigators might be feeling the pinch now because there just isn’t anybody else left to cut. Many of our tipsters report that this is the third round of stealth cuts by Shearman. There might not be a whole lot of fat left to trim.
Shearman has already taken steps to reduce costs associated with summer and incoming associates. A couple of weeks ago, we reported that Shearman’s 2009 summer associate class was already 58% smaller than the 2008 class.
The firm has asked incoming associates to defer for a year (with the added kicker that the firm is not offering any stipend to associates that insist on starting on January 10th, 2010), and has laid the groundwork to potentially push back the class of 2010 as well.
And Shearman laid off 60 staffers in early March.
What is left to cut? Wait, don’t answer that. We all know what is left to cut. We just wonder if Shearman is willing to be the first Vault 20 firm to slash associate salaries (or if it can still claim to be a top 20 firm after it cuts salaries).
Is this going to be the last round of cutbacks at S&S? We’ll keep you posted.