This Week in Layoffs: 05.25.09
[Ed. note: Above the Law has teamed up with Law Shucks. Law Shucks has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.]
No! So close! We had this whole piece written on the optimistic assumption that this would be the first full week without a layoff since the end of 2008.
Then Ropes & Gray went and ruined it for everyone.
The slowdown of law firm layoffs reflects the trend in the broader economy. Initial jobless claims were down 12,000 for the week ending May 16, to 631,000. Continuing claims increased by 75,000, the net of the 637,000 claims from last week. That was the 16th straight week of a net increase in unemployment, bringing the rate to 8.9%, a 25-year high. The level is expected to peak over 10% in the next year, and take five more years to drop down to 5%.
So even though the grand total for calendar 2008 broke the 10,000 layoff mark last week, the rate has dropped off dramatically. It was only on April 13, 2009 that the total from the current wave (counting from Cadwalader in January, 2008) broke 10,000. Despite the recent slowdown, it took just over a month to have as many people laid off from law firms as were laid off in all of 2008.
Even if Ropes hadn’t rained on all the barbecues, there were still going to be a number of caveats and clarifications to the "no layoffs" analysis. We address those, and other cost-cutting measures, after the jump.
Layoffs
For those new to the series, we track stealth layoffs just like every other layoff, although our humble opinion puts them in their own special circle of hell.
So Ropes & Gray gives us our first caveat to the "first full week without a layoff" announcement, which is that we don’t give a pass to firms that play the "performance" card. All layoffs in this market are economics-based unless proven otherwise (see, e.g., Deidre Dare or the Quinn Emanuel first year).
Our second caveat would would have been to clarify that "no US firm" had laid anyone off this week. Someone is always being laid off in London.
Addleshaw Goddard, one of the larger UK national firms, went the traditional route and cut 85 staff. But they’re also thinking outside the box. The firm has proposed a 4-day workweek at 85% salary. The firm is soliciting feedback on that and will decide in a few months whether to implement. The firm is also offering four-, eight-, 12-, and 26- week sabbaticals at 30% of pay. And, of course, to complete the trifecta of cost-cutting, salaries are being frozen for those already in place and reduced for the incoming classes.
Regional firm Blake Lapthorn had its third round of redundancies, this time 33 staff, and possibly some number of attorneys.
The third clarification would have been to explain that no one had been laid off who had already begun work.
Freshfields has carved out its own path, announcing it will pay those trainees it doesn’t offer full-time positions an undisclosed amount in cash. That reflects the firm’s expectation that it will only be taking on 70% of its trainees, significantly off the 91% retention rate from last September and 86% from March. That’s really not a whole lot different than letting 10 trainees go through the program and then laying them off. It doesn’t qualify for the tracker, but it is worth noting here.
Fish & Richardson is straddling the line between layoffs and deferrals. Remember Glengarry Glen Ross? For those who don’t, here’s the line:
Blake: We’re adding a little something to this month’s sales contest. As you all know, first prize is a Cadillac Eldorado. Anybody want to see second prize?
[Holds up prize]
Blake: Second prize is a set of steak knives. Third prize is you’re fired.
The IP firm, which just laid off 120 people last week, is doing pretty much the same thing. One third of associates start on time, one third start in October 2010 with $5,000/mo to tide them over, and one third are fired before they even started.
Same goes for the 25 graduating law students who planned to start at the Massachusetts Superior Court. They just found out their clerkships are in scope of the statewide hiring freeze and they won’t be starting this fall.
If lawyers can be fired before they start, surely they can quit, too, right? Pillsbury thinks so. Not surprisingly, the firm’s "voluntary departure program" wasn’t well received. So now they’re offering a "voluntary non-employment program," pursuant to which they’ll reportedly pay $60,000 to any offer-toting first-year who volunteers not to start.
This article continues on Law Shucks, with the final layoff numbers, plus the other cost-cutting measures (deferrals, salary cuts, etc.), which were much more active this week.
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Comments
Figgit-FIRST!
Captain FIRST!
loser
I. Am. Fucked.
A four day week for 85% is a good deal. Even assuming that they only work five now, it seems each day would be worth 20%. 20% less work for 15% less pay. Sweet.
5th of bourbon
OMG - what a concept?!?! Less pay for... less work!!
6 - Shut up, please.
I get knocked down, but I get up again, you're never gonna keep me down.
-Anthem for BIGLAW associates!!
I wish my firm would force us to work 4 days a week for 85% pay.
4 - Either that or they could just make you accomplish the same amount of work you previously had in "4 days" - 0% less work for 15% less pay
10 - For attorneys accomplishing work means billing hours. Billing hours requires hours. Hours require days.
Hi I am new to this blog and am wondering if anyone can point me in the direction of a Boston-based firm that fires first years. Thank you in advance.
latham doesn't have a boston office
12--
R&G admits to canning 2, and others around town are reportedly doing to same. It's probably safe to assume that most of the major firms around town are doing this to varying degrees. Some firms are a little bit better about covering their tracks.
just about every firm has been better to first years than latham.
i hope that chompers gorilla chews dave gordon's face off.
What a good idea - ATL is teaming up with LawShucks! They should do this every week!
make love to me dave gordon.
-73 year old woman in wheel chair
16: are you sure ATL is teaming up with LawShucks?
Four day work week at 85% salary. In real time it means do 100% of the output for 85% of the pay, then maybe we won't fire you outright. But we will.
18 - Hold up, is ATL teaming up with LawShucks?! Holy shit, our lives will NEVER be the same again!
Fish & Richardson's move reported above may take top honors in the "You've got to be fucking kidding me!" category. A bullshit move by a craptastic firm.
where's all this "Fish is going down the tubes" / "Partners are leaving" stuff coming from? $1 to anyone with info / any details at all.
Also, did I hear something about Latham and like, first...somethingorothers?
Do you guys that are saying they'll require the same amount of work crammed into four days mean that they'll just work longer days? Like increasing from 16 to 20 hours a day? Cuz 11's right about the hours thing.
No, 11 is not right about the hours thing. You'll work faster, you'll cut corners, you'll sleep less, but you sure won't just break down and cry I CAN'T DO IT ALL IN THE TIME I HAVE!
Because then you will be in a world of shit.
Right, take that 4-day workweek option for less pay. And if the firm decides that more layoffs are necessary, I wonder who will get laid off first.
Anyone who has seen the disproportionate impact of law firm layoffs on people who were part-time knows that choosing a part-time track right now is not a good move.
did anyone else see the aston martin ad? if i blow off the studen loans with $60k for not working i can have a nice ride for $1477 a month.
since they aren't laying off investment bankers at the same clip maybe the ad sould be on DB instead
24 - They're British. They might.
"The slowdown of law firm layoffs reflects the trend in the broader economy." " . . . the rate has dropped off dramatically. "
Most of the world, and quite a few US companies, follows the July 1 - June 30 fiscal year. When the budget for the now concluding fiscal year was made May/June 2008, the world was a different place. Lehman Bros. was spewing forth happy projections, GM and Chrysler couldn't admit that a thing was wrong, and the only worry was gas above $4/gal.
This was then, and this is now. Most balance sheets are bleeding red, the NY Times reports "Job Losses Push Safer Mortgages to Foreclosures", and Bloomberg notes that "Rhode Island Project Shows Obama Stimulus Has Yet to Dent Job-Loss Trend."
Anyone planning a budget for the next 12 months has no choice, but face reality. It will be worse. Relationships will have to be adjusted. Lower cost centers must be found. Costs must be contained. Divisions may need to be merged, duplicate staff eliminated. Firms handling one or the other must be reduced.
So, rather than falling from the cliff onto a nice sandy beach, it's just a ledge. There is a lot of air between here and the hard bottom.
Back-up your contact list from Outlook, print out and save some documents, complete all your CLE's, just generally be prepared to hit the road running. See if you can extend your lease in increments of three months rather than renew.
Get ready for more layoffs in multiple firms as the summer drones on... Also be leary of more stealth moves... Sorry even the chosen one can't turn this economy around... And with higher taxes for most big lawyers that means even fewer spots for associates...
- In The Know
29, take any ten V50 law firms at random and at least half of those firms will not be in business by Dec. 31, 2009 or will have merged.
18 and 20:
Yeah, I'm pretty sure they're teaming up and I couldn't be more excited. I mean, seriously. This might be the best day of my life.
-16
30 - take any ten V50 law firms at random and at least half of those firms would have increased lateral hiring by 20% by December 31, 2009.
Thanks, ATL. I wasn't bored at all today. I'm sure absolutely nothing of any consequence happened in the biglaw world today. Good thing you dicked around on the job.
The Chosen "One" announced on C-Span what we all knew. The U.S. Treasury has run out of money. Obama has already pledged more expenditures than all of the prior presidential administrations combined. He has done this in just 4 months into his presidency. A drunken sailor is more careful with his wallet than Obama.
Unemployment is already in double digits (don't believe the GAO's cooked numbers) and foreclosures are at an all time high, now making a dent into the non-subprime mortgage category. Comrade Obama has made no secret that the evil rich must pay for his reckless spending. At this rate, my firm's life is at stake. I already made enough money to last a few lifetimes and can move to the French Antilles where I own property and never step foot in this Obamanation again. I feel terrible for the junior partners that will have their futures foreclosed by Mr. Obama just before drawing from the well. Is this the change you believe in?
PE, please adopt me so I can inherit your wealth when your sorry ass dies. Otherwise I'm f...d like the rest of my generation. Recovery? With unemployment still rising, real estate not recovering and perhaps not even at a bottom yet, do you think there will be a real recovery? Don't worry, "The One" will save us... he'll give us everything we need, don't worry, he told us... some rich guy we'll pay for it... we get something for nothing. FOOLS! Start hoarding rice and bottled water... the end is near. Goddamit, I should have learned to be a plumber... they can't outsource that to India!
I found the answer, let's follow Obama's lead. In this new "age of responsibility" let's do as he does, spend a lot more than we make! That way, we'll "stimulate" the economy! When we become unable to pay our debts as they become due (I think lawyers call this "insolvency") we'll just print more money! Yes we can!
No 36, we can't print money. Only the chosen one can do that. We just have to bend over, grab the ankles, and well you know...
28 - Good post. Having been unemployed for about 4 months now, with not even an interview from my >50 applications (including some for jobs paying about 1/3 of my former biglaw salary), I've come to believe that we're in much worse shape than I previously thought.
The market for corporate biglaw is d e a d right now, and I'm told by a friend that one associate GC position in an undesirable location (by most people's standards, anyway--think "Upper Midwest") received over 400 "qualified" resumes. That's insane.
18 months ago, when I was getting at least 2 headhunter calls per day, you couldn't have said anything that would have me work for $120k and move to the middle of the country, and now I'd gladly do it for $75k. Times have changed. Whether unemployment is at 8, 9, or 10% means little to corporate biglaw associates, whose unemployment rate is (or will be over the next year) considerably higher.
36, it's very simple really. When Bush runs a deficit of $200 billion to get us out of the early 2000s Clinton-inherited* recession, that is Irresponsible Spending and a Very Very Bad Thing. When Obama runs a deficit of $1.84 trillion (>10% of GDP) to get us out of the late 2000s Bush-inherited recession, that is a Mandatory Government Emergency Action and Change We Can Believe In.
If you disagree, that means you're a racist.
Remember when spending/consumption was a bad thing and savings was a good thing? Saving money is now called "hoarding."
War is Peace. Freedom is Slavery. Ignorance is Strength.
* Liberals may have been born too late to know the historical timeline, but the early 2000s recession started in March 2001, after the stock market collapsed and unemployment started rising in 2000.
CNBC reporting Sotomayor is the pick.
Why isn't there a post about Obama's SC nominee yet?
There is a SCOTUS post up. Refresh your browsers, folks.
Thompson Hine will be doing its part to keep the number of layoffs up!
Utilization levels are being looked at for secretaries; so I'd be nervous if I were staff.
Thompson Hine - fuck your career, we're protecting PPP!
43,
You're starting to piss some people off. I've heard secretaries discussing ATL (and two partners once recently, too).
You keep calling out the firm by name like this, and they're going to figure out who you are.
With the recent adjustments to secretary assignments, they're already nervous about more layoffs.
The partners have said there won't be more staff layoffs, but, then, they said that last time too.
Fair warning, you keep throwing stones in your own house and you're going to get snuffed out.
-Miserable but smart enough to stay quiet (usually)
The reason why you haven't heard about any major defection of Fish partners is because there is no one there who can defect.
The firm is deadly slow right now. Most firms are done with layoffs by this point. The ones - like Fish - that are still doing rounds three & four are in serious financial trouble.
I would put Fish on dissolution watch at this point.
44,
Pissing the partners off is precisely the point. As is doing it here while they pay me for the privilege.
They won't find/stop/fire me for this because they are incompetent, fat and stupid. I'm not sure what partners you work with, but mine might as well consider the computer a magical box that spits out e-mails and caselaw.
And the IT people here? Well, let's just say that Thompson Hine partners showed their usual judgment and analysis in making those hires. I assure you my browsing activities at work are quite invisible.
Now, if you'll excuse me a moment, I'm going to go grab some of the firm's (shitty) coffee and get paid some more to share my opinions/analysis of this shit firm.
Thompson Hine - join us! You could be as happy and fulfilled as all of our employees (at least, until you get laid off)!
44,
Pissing the partners off is precisely the point. As is doing it here while they pay me for the privilege.
They won't find/stop/fire me for this because they are incompetent, fat and stupid. I'm not sure what partners you work with, but mine might as well consider the computer a magical box that spits out e-mails and caselaw.
And the IT people here? Well, let's just say that Thompson Hine partners showed their usual judgment and analysis in making those hires. I assure you my browsing activities at work are quite invisible.
Now, if you'll excuse me a moment, I'm going to go grab some of the firm's (shitty) coffee and get paid some more to share my opinions/analysis of this shit firm.
Thompson Hine - join us! You could be as happy and fulfilled as all of our employees (at least, until you get laid off)!
44,
Pissing the partners off is precisely the point. As is doing it here while they pay me for the privilege.
They won't find/stop/fire me for this because they are incompetent, fat and stupid. I'm not sure what partners you work with, but mine might as well consider the computer a magical box that spits out e-mails and caselaw.
And the IT people here? Well, let's just say that Thompson Hine partners showed their usual judgment and analysis in making those hires. I assure you my browsing activities at work are quite invisible.
Now, if you'll excuse me a moment, I'm going to go grab some of the firm's (shitty) coffee and get paid some more to share my opinions/analysis of this shit firm.
Thompson Hine - join us! You could be as happy and fulfilled as all of our employees (at least, until you get laid off)!
46-48,
First, nice multiple post, douche.
Second, mostly you're just upsetting and/or mildly amusing the staff and associates. Other than the conversation between partners I overheard, there isn't much basis to believe you're having any sort of tangible effect.
I don't suppose it bothers me much (or, from what I've heard, anyone else either) for you to be throwing shit at the firm like this. I just don't think it's going to help.
Most firms are fucked right now. Ours seems to be in worse shape due to underlying problems from before the recession. Pointing out that our firm is amongst the shittiest of the shitty... I just don't know what that's supposed to do for us that's good.
Just my $0.02
Fyi, 49 = 44
-44
46 - I love it, keep it up.
Do you guys still have that shitty coffee that you guys switched to because it was sold by some summer associate's dad or something? I might have my facts messed up -- this was a few years ago.
51,
Thanks for the shout-out! Considering that Thompson Hine fucked us all out of $17,500 this year (up to $35k next year, and $53k in year 3), I'm thinking it will be a while until I feel like we've gotten our money's worth on complaining about the way our fucktard partners run this firm (into the ground).
No comment on the coffee switch, etc. - coffee is different between each of our offices, so what sort of shitty coffee I'm drinking could ID which shitty Thompson Hine office I'm drinking it in.
I will say that, from what I hear from other associates, pretty much all of our offices are shit holes.
Cleveland - full of dicks pretending to be Jones Day (not possible, because Jones Day isn't in a free fall collapse)
Columbus - neglected and no real foot hold in one of Ohio's best legal markets (best legal market in Ohio, bwahahaha, we're heavy hitters!)
Dayton - we even have a Dayton office! Bwahahaha!
NYC - ask someone at a real firm in NYC if they've ever even heard of our office.
D.C. - see NYC
Atlanta - severely mismanaged ever since it opened. Currently bleeding.
Belgium - an excuse for partners to take trips to Europe and buy whores away from their 3500 sq ft. wives. This office adds no value to the firm.
(note to Thompson Hine partners - U R peying mi to right this abowt U. N-Joy!)
52 - Thanks for the update. I feel sorry for you guys who were sold the broken bag of goods that is TH. There are some real pricks there (with egos that barely fit in the room).
That said, if I were you, I'd hang on to the job right now, keep the bitching anonymous (but coming), and get the hell out of there when the lateral market picks up.
And I didn't even realize that you guys had a Brussels office.
- 51
53,
Sure thing. Always happy to help spread the word.
Hehehe, yeah, that's the thing about the Brussels office... nobody realizes we have one. Not clients, not the market. The only people that know/care about the Brussels office are partners trying to waste money to take trips there.
After all, this is the same wise and brilliant firm that sinks considerable resources in having a Dayton, Ohio office.
Supposedly a BigLaw firm, but with a Dayton, Ohio office.
With spending/investment strategies like that, it's a minor miracle that the whole firm hasn't gone belly up already.
I feel bad for the Dayton people, though; that lease was recently renegotiated.
Rogue Associate,
Why does it matter that they recently renegotiated the Dayton lease?
Leases expire if you don't... you keep mentioning this... what's the big deal with this?
Covington is laying off some staff attorneys. Two per day. I hear they are offering them a bit of severance in return for signing a non-disclosure. I believe some of the staff attorneys have been working at Covington for over four years.
55,
It matters because commercial real estate in Dayton Ohio has extremely high vacancy rates. Therefore, if one of the few remaining tenants thinks that a Dayton office is a sink-hole for money, then that tenant will easily have enough leverage to negotiate a short term lease and/or a lease with a favorable termination option.
Thus, if Thompson Hine is interested in containing costs (and the huge pay cuts, layoffs and constant stealth layoffs answer that question for us), then it is very likely that there have been significant and serious conversations about how to do this. While renegotiating the Dayton lease.
Therefore, it is extremely likely that the new Dayton lease contains provisions granting our beloved partners considerable discretion on what to do next with the Dayton office.
Do you think the decisions they make will have the best interests of staff/associates at heart?
I don't.
THOMPSON HINE - we prefer to screw over our employees when they don't see it coming! No, nobody can see the terms of the Dayton lease!!!
52,
Amen about the Atlanta office. Watching them "manage" this office has been like watching someone take a new car and promptly crash it into a wall.
I get the message; Thompson Hine sucks.
You really should get into Sutherland. The drama alone should keep you posting full time here.
"Sutherland: That's How We Roll!"
59,
Hehehe, yeah, some of us post from time to time, and a lot of us read ATL (at least, that's my sense from talking to our other associates).
I don't know who Rogue Associate is, but I'd love to find out. Secretaries are on the internet all the time and gossip spreads fast with them, so they're all watching.
At least a few of the partners I know are familiar with this, and they are SUPER PISSED about it. Also, amusingly, at least one partner has been giving piercing gazes at associates, as though the guilty party will be shifting their eyes, twiddling a moustache, futzing with a bra-strap, etc.
But, yeah, they fucked us out of 1/6th of our salaries and keep firing our friends, so we've been enjoying ATL for a while.
-58
60,
I'd love to share with you who I am, but, suffice it to say, I feel that sharing my identity would be... unwise.
Suffice it to say, when associates are sharing a drink away from the office, enjoying the taste of our common misery, and laughing our asses off at the incompetence of our partners, you may well be having a drink with me.
If you agree with my thoughts and frustrations working with Thompson Hine, then please share your own stories of this bullshit too (be anonymous and be safe, though).
Most importantly, if you're going to vent about how much it sucks to work at Thompson Hine, be sure to say the firm's name in your post (and don't change the spelling to include TTT).
That way, these ATL comment threads show up in the Google results when people search for "Thompson Hine"
The more name mentions, the higher these pages are in search results. Searches for "Thompson Hine" restricted to results within the last month is almost nothing but ATL pages.
(note to Thompson Hine partners - hello! I love you. Come give me a kiss! When I look at you, all of my contempt is hidden behind my eyes. We talk every day, and I am very nice and massage your egos when we talk. Why? Because you are paying me to write this about you, so I figure we're good friends.)