Law Shucks, Layoffs

This Week in Layoffs: 07.18.09

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[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.]

Fortunately, this week’s law-firm layoffs didn’t follow last week’s surprise return to March form. In fact, there were fewer layoffs this week than any other this year.

While this is a nice reprieve, unemployment continues to rise, despite some indicators of stabilization in housing and manufacturing. Non-farm payroll fell by 467,000 last month, which was worse than estimates, and unemployment hit 9.5% – the worst in 26 years but still not at the peak levels Obama predicts (10%+).

Closer to home (geographically, for most of us, and metaphorically for those of us whose fortunes rise and fall with the financial services industry), the financial sector "continues to bleed jobs." Unemployment in NYC reached 9.5% in June, the highest level since 1997.

As if all that wasn’t bad enough, Mort Zuckerman wrote an op-ed in the WSJ, saying it’s even worse than we realize:

The Bureau of Labor Statistics preliminary estimate for job losses for June is 467,000, which means 7.2 million people have lost their jobs since the start of the recession. The cumulative job losses over the last six months have been greater than for any other half year period since World War II, including the military demobilization after the war. The job losses are also now equal to the net job gains over the previous nine years, making this the only recession since the Great Depression to wipe out all job growth from the previous expansion.

After the jump, we sift through this week’s activity in our little slice of heaven.

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Most troubling to our statistics-loving hearts is the breakdown by gender of layoffs at Squire Sanders. There are a number of valid reasons this could happen, but the disparate effect is chilling. Just a few months ago, Roberta Liebenberg, chair of the ABA Commission on Women in the Profession, wrote a letter to Forbes in which she said, “in this dire downturn, we can’t allow the economy to be used as an excuse for gender bias and roll back the progress we’ve made.”

Early in this process, when most layoffs were stealth, we speculated on how the victims were chosen. We found lots of anecdotal evidence that the factors were more bizarre, and less pernicious, than gender bias.

The Estrin Report recently posted "15 Warning Signs Your Firm May Be Laying Off Staff." Their list of warning signs is a little longer than ours, which would just be "You are a staffer at a big law firm." Staff are about 50% more likely to be laid off than attorneys.

WilmerHale caught a lot of flack from commenters about recent performance-based layoffs that the firm said weren’t performance-based and weren’t layoffs (they were "transitions"). At Law Shucks, we thought it was great that they were trying to be more open, but think they still missed the point.

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So which is better? Some, presumably well-intentioned, disclosure that brings the spotlight firmly to bear on a firm, or going the pure stealth route, like Loeb & Loeb is trying to do?

We prefer the former and commend WilmerHale for at least having an open discussion. Same goes for Ballard Spahr, which put out quite the magnum opus on the state of affairs over there.

Meanwhile, K&L Gates isn’t making any friends for its recent handling of staff layoffs, either. Although, unfortunately, they didn’t really do it any differently than any other firm has – they just got caught in a slow news cycle.

Technically not a layoff, so it would usually be covered in the longer version of these posts that appear on Law Shucks, but the other big piece of news this week was Morgan Lewis canceling its summer program for 2010.

That, of course, led to pundits and law schools worrying that the cancellations would spread and OCI would be decimated. But how could it not?

Not to further toot our own horn, but we’ve been pointing out this logjam for months. Canceling summer programs is a particularly blunt way of smoothing the hiring. Weil Gotshal (which has an unbelievably annoying habit of late announcements on Fridays) is still trying to deal with the problem with deferrals. Presumably, they’ll do the sensible thing and slash summer hiring for 2010 and if by some miracle they need more lawyers in January 2012, they’ll fill up from OCI. At least they’re paying $75,000 for the furlough; Hogan & Hartson is also deferring but hasn’t made any decision on the details.

At least Covington wants everyone to know that things are just peachy over there!

The final numbers, which as we said, are the fewest in a week this year, and the rest of the article on Law Shucks.

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