So far, law firm partnerships have put on a unified front about the cost cutting measures that need to be taken during this economic crisis. When it comes time to layoff associates or cut salaries, partners look like a monolithic group.
But law firm partners do not all think with one mind. And the cracks are beginning to show.
Back in October, Jenner & Block asked 10 partners to leave. But the latest reports out of Jenner suggest that the firm is not only asking some partners to leave, management is outright de-equitizing partners as well. A tipster reports:
Management just voted themselves massive raises while cutting the points of partners who are not politically connected. More significantly, over the last few days, management is going office to office de-equitizing and partially de-equitizing tons of partners in an effort to raise the profits per partner number. Those partners who are being de-equitized are no different than those who are permitted to keep their equity except those whose status remained intact have friends on management.
Above the Law asked Jenner spokespeople about these specific allegations. We received this response:
The quote … is inaccurate. However, as a matter of policy, we do not publicly comment on individual personnel matters.
But additional sources corroborate the reports that Jenner partners are being de-equitized.
More details after the jump.
One tipster quips:
At this pace Jenner and Block will soon be populated by top level experienced partners (billing clients hundreds of dollars per hour) and nobody else. Service partners are gone.
Yet another tipster describes the situation as a “partner blood bath.”
Our sources explain that high-end rainmakers are demanding a larger share of the profits, at the direct expense of junior partners who do not bring in business. Morale, we are told, is very low among the partners. High earning partners are annoyed that junior people aren’t pulling their weight, while new partners do not appreciate being essentially “demoted” to senior associate status. One of our sources reports:
Those who have dared speak against management have been publicly punished and made an example of. The firm no doubt will “spin” this latest move by claiming that only a few partners were affected (not true) and by making it sound like those partners were not performing up to standards – also not true.
Is this really an issue that is localized to Jenner & Block? Fundamentally, there is only so much money you can save by laying off associates and cutting salaries (just like there is only so much money you can save by firing staff). Some firms will undoubtedly start taking a hard look at the people who are supposed to be generating business.
But, it seems particularly unfair to de-equitize partners for not generating business during the worst economic crisis since the Great Depression.
Will rainmakers be willing to take less pay to help their firms weather these tough times? Or will they take their book and jump to whichever firm allows them to keep what they kill?
Either way, this is a story we will continue to follow. If you have other stories about rifts between senior and junior partners, send them into tips.
Earlier: Nationwide Layoff Watch: Jenner & Block Cuts … Partners