On Friday, we reported that Cravath offered a voluntary deferral option to up to 50% of its incoming class of first year associates. People who are not yet associates can count on $80,000, health care, and loan repayment assistance from the firm in exchange for taking a year off.
Apparently, that was the last straw for associates that have been laid off from Cravath over the past several months. Tips started pouring in to Above the Law reporting stealth layoffs that have been taking place at the firm since December 2008.
Tipsters — including sources that claim that have been laid off — report that at least 25 people have been let go from Cravath for “performance” reasons. And sources still at the firm expect more layoffs to come this month:
Cravath Swaine & Moore has been doing stealth lay off of associates since December ’08 (using performance evaluation as the excuse). Since January of 2009, they have been doing stealth lay offs more aggressively. Rumor has it that stealth layoffs of staff will be happening this month (June).
We directly asked the firm whether or not these reports were true. But to this point, the firm has declined to comment.
So if the firm has a performance reason for letting these people go, it is not sharing it with us. But regardless of why people are being let go, some laid off associates are annoyed that they are not getting the same treatment during the recession as 2008 summer associates.
I was fired. I don’t know why. I don’t know why I’m not getting $80,000 to wait out the terrible economy.
After the jump, sources tell us exactly what happens when you get fired from Cravath.
According to sources, when you get fired from Cravath, it brings out the big guns:
Scott Barshay will call you and ask you to come to his office and when you get there every, or most every partner, you have worked for will be there. They will go around the room telling you why your work has not been up to standard and then they will tell you that it’s not working out and that they won’t give you any more work and let you have a think about it.
Barshay is the managing partner of Cravath’s corporate department. As we understand it, all of the stealth layoffs have occurred in corporate. That makes the performance review logic a little bit more interesting. Are corporate attorneys the only ones underperforming at Cravath?
On the other hand, as far as we know Cravath hasn’t fired any first years. So at least the firm has a body of work that it could be basing its decision on.
Our tipsters report that the laid off associates are given three months to find other employment.
Is this as deep as Cravath is going to cut, or will there be more layoffs this month? At the point where Cravath is firing people, is there any firm that is immune from layoffs during this recession? We’ll keep you posted.
Earlier: Cravath Offers Voluntary Deferral to Class of 2009 — and Delays Class of 2010 a Full Year
Stealth Layoff Watch: Davis Polk & Wardwell Bring Layoffs into the Vault 5