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Jones Day Slams Its Competitors

Tuesday, August 4, 2009 10:23 AM - By Elie Mystal

Jones Day Logo.jpgJones Day has escaped a lot of the worst side effects of the recession. The firm hasn’t had massive layoffs, it hasn’t cut associate salaries, it hasn’t canceled its summer program. That is something to be proud of.

And Jones Day seems very proud. Above the Law has obtained an internal newsletter from Jones Day that was aimed at its California office. The message was written by partner Joe Sims and it’s slated as a “midterm report” about the firm. Much of the letter is the kind of standard stuff you are used to seeing from slick, firm sponsored content:

The reality is that we are feeling the same reduced demand that is facing all law firms; I think it is clear — and as the results from other firms become visible, it is going to be even more obvious — that we are dealing with those circumstances better than most. So we have our challenges but, ironically, this difficult economic climate is also producing the best opportunity we have ever had in California to really separate ourselves from most of our peer competitors, and to move toward the position we aspire to — being universally recognized as one of the leading firms in California.

But what makes this newsletter extraordinary is that the message gets very specific about just why Jones Day is poised to separate itself from its peer competitors. And the newsletter offers Sims’s analysis of precisely where the firm’s California competitors went wrong.

More details after the jump.

The newsletter doesn’t call out any particular competitor by name, but it’ll be pretty easy to figure out who Joe Sims is talking about. Overall, Jones Day believes that its firm culture is a key reason why JD is weathering the storm better than other peer firms:

First, who we are, what we do, and how we do it has served Jones Day (and JD California) well during these hard times. Our geographic and practice balance; our one-Firm attitude; our belief that our real focus has to be on the long run, while managing the short-term problems that we face; and the fact that we understand that, in addition to our clients and our partners, the Firm has a responsibility to deal with our staff and associates in a way that recognizes that they and their families depend on this institution—all of these mean that we will come out of this crisis stronger than we went in. We have been able to avoid the drastic steps that many other firms have resorted to, in part because we are better positioned to minimize exposure to economic stress, and in part because our partners are committed to the principles that created our better position, even if it means some short-term burdens that they must bear.

So, point one is that Jones Day will survive and thrive because the firm cares about its associates and staff. We haven’t heard a lot about short-term burdens the partners have been willing to bear lately.

But it’s not just that JD will be stronger, it’s that other peers will be weaker:

Second, many of our peer competitors will come out weaker, not stronger. They may well protect their short-term financial metrics (although it will be interesting to see how we fare vs. the firms that slashed and burned), but they will pay a long-term price. Some of it is obvious: Firing staff and associates, or freezing associate salaries, or doing away with summer programs entirely makes it very clear to those groups that either that firm was not efficiently organized and managed before this crisis, or its first interest is protecting the owners’ incomes, not the various constituents that depend on the firm. While that is hardly un-American, it does tend to focus people’s minds on the fact that their firm clearly does not have their interests at the top of its agenda.

By contrast, while we have been forced by the circumstances to take some relatively minor steps to reduce our personnel expenses, we have not taken the easy way out by protecting partners’ incomes on the corpses of associates and staff…. The contrast with many other firms could not be clearer.

“Corpses of associates and staff,” and “how we fare vs. the firms that slashed and burned.” Are the Latham trolls now writing firm copy for Jones Day?

But wait, there’s more:

But there are some other, less obvious reasons why many of our peers will come out of this recession weaker rather than stronger. To list a few examples, the partners at many firms are now much more focused on the relative stability of their firm and other firms, and that focus will lead them to be more interested in opportunities at firms like Jones Day that are clearly very stable.

At some firms, the leading partners and practices appear to have protected their financial interests at the expense of younger partners or smaller practices, and the latter know it, and again, this will lead those lawyers to be more receptive to overtures from firms like Jones Day.

Finally, clients have seen that some of their legal service providers were just that—simply another vendor reacting to business problems with textbook business solutions, and very short-term focused.

That is the first time I’ve heard anybody tie laying off associates and staff directly to poor client services. Jones Day is asking clients to look at how the firms handle the recession internally, and then ask if those firms should be trusted to handle the recession on behalf of their clients.

It’s the kind of talk you hear with a glass of scotch in your hand, not in a firm newsletter.

And just in case JD hasn’t made the point yet, it becomes stunningly clear:

Finally, I believe that, by the time this is all over, we will see more Hellers and Brobecks, and not just in California. The late-to-the-party firms, which don’t have any comparative advantage but have nonetheless taken on debt and stretched to rapidly make late investments to try to go national or global, are all under great stress, and some will not survive. And many of those peer firms that do survive will be relatively weaker, especially in the areas where we want to compete, because, to one degree or another, they will have eaten their young.

My friends, if we ever get to the point where firms are actually competing for top talent again, you have just heard the sales pitch Jones Day will be peddling. Jones Day = decent, other firms = eat their young. We’ll see if it works.

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