Stealth Layoff Watch: Sullivan & Cromwell Has A Very Special Spring Bonus

The news has been brewing for weeks, but Above the Law is now in a position to confirm that there have been layoffs at Sullivan & Cromwell.
Multiple independent sources report that the firm has quietly laid off 15 – 20 associates. The departments vary, but the layoffs have been focused in the New York office.
All of the sources we spoke were told that they were being laid off for performance reasons. But Above the Law has learned that a couple of first years have been laid off as well. It’s hard to make a performance argument against an attorney that has been around for less than a year.
The firm did not respond to our multiple requests for comment.
Why is this information coming out now? We have some additional details after the jump.


As we understand it, the majority of these layoffs took place near the end of February. The affected associates were told of their situation and given two months to find another job.
If you do the math, that two month “severance” has run out. Not surprisingly, a lot of the laid off associates have not found work and are willing to talk about it.
Like all firms, Sullivan has suffered during the recession, but hasn’t take as big of a hit as you would think. S&C only reported a 3.7 percent drop in profits per partner in early February.
Lost in the layoff news that has been buzzing around the firm is S&C’s silence about associate bonuses. Even though bonus season is long over, Sullivan specifically said that it would reconsider associate bonuses, in April. When we reported the S&C December bonus, we also noted:

[The S&C] memos also said the firm intends to issue all associates another check in April. The spring distribution, or supplemental bonus, will be based on the firm’s overall financial performance. The firm also issued supplemental bonuses last year, though the circumstances were somewhat different since it was the height of the dealmaking boom.

This provides Sullivan with a rare opportunity to prove that its layoffs are performance based. If everything is fine, if the economy is not a factor, if the firm has really just laid off 15 – 20 “bad lawyers,” then maybe S&C will reward the good lawyers still at the firm?
But if the firm is worried about the future, if it is feeling a bit over leveraged, if S&C is not immune from the great recession, if there is no extra special bonus check coming, then maybe the firm will just admit that it laid off 15 – 20 people because of the economy?
Whatever the reason, good luck to the people from Sullivan & Cromwell hitting the street.
Earlier: Profits Per Partner Down At Skadden, S&C, and DPW
Associate Bonus Watch: S&C Announces Half-Skadden Bonuses (But May Pay More Come Spring)

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