This Week In Layoffs: 09.28.09
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.
We draft this column by starting with the relevant articles from the past week in the legal sector, then tying in the broader economic data. We were quite happy to see that the law-firm layoff numbers this week were good - perfect, in fact - a week without layoffs for just the second time this year (the other was the week ending August 14).
And we weren’t the only ones pleasantly surprised. For the third straight week, initial jobless claims declined, down to 530,000 against an anticipated 550,000. Continuing claims also declined, but as we’ve said repeatedly, that seems to be more the result of benefits running out and people giving up (which means they no longer count as unemployed, in a bizarre example of government logic), than actual job creation.
After the jump, we turn to the legal sector.
The big news in the legal sector was the PwC report on the top UK firms, which concluded that they have "weathered the storm," and the worst is in the past.
PwC’s quarterly benchmarking survey showed an 18% rise in profits per equity partner (PEP) since January at the 10 largest firms, and a 41% surge at the top 11 to 25 firms. Profit margins also saw a boost in firms of all sizes.
Commentators said firms were finally reaping the rewards of staff cuts and were seeing an increase in the volume of work.
In the three months to 31 July, equity partners at the top-10 firms earned average profits of £181,000, up from £154,000 in the first quarter to 31 January. PEP in the top 11 to 25 firms rose from £56,000 in the first quarter, to £79,000 in the July quarter.
Firms throughout the top 100 saw a rise in profit margins, which soared by 36% at the top-10 firms, and rose by almost a third at the top-25 firms.
Frankly, that’s contrary to a lot of what we’re hearing out of the US firms, which are still looking to cut costs even as they retain earnings to gird against future downturns, with White & Case a prime example of that.
Technically, we can’t count them as layoffs because they never got the chance to work, but the bodycount from the Class of 2009 continues to rise. Arent Fox is the most-recent offender, rescinding offers to 12 members of that class, who had already been deferred until next year anyway. They’ll get $20,000 for their troubles. At least they made a clean break. Alston & Bird’s incoming class is on indefinite deferral.
As has been the trend lately, firms continue to look to cut costs in other ways. Dorsey & Whitney is now hinting that lockstep may be next on the chopping block, having already laid off staff, cut salaries, canceled its summer program, and given offers to only 56% of this year’s summers. Wilson Sonsini at least had the decency to announce staff cuts publicly, which a whole host of other firms have done on the down-low.
Bloomberg has shown a surprising interest, for the mainstream media, in the trials and tribulations of lawyers and law students. This week we got word that OCI offers were down (only) 20% at Harvard. Reports from the TTTrenches are far far worse.
On the brighter (but not this mindlessly bright - we hate vapid, generic optimism) side, the Brooklyn DA Charles Hynes is hiring 30 deferred associates, with their comp being covered by their firms. That’s approximately $2 million of free labor for the people of the Empire State. New York courts can also avail themselves of deferred associates, thanks to a recent opinion by the Advisory Committee on Judicial Ethics, but those participants will have to forego their stipends.
And there’s always busking - two London lawyers earned more money in 40 minutes playing music in a subway station than the hourly rate legal aid pays out.
That’s a far better option than insider trading, as one particularly inept former Nixon Peabody associate learned.
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Comments
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FIRST BABY!!!! Suck it!
Ironic, considering PWC is rumored to have conducted stealth layoffs.
Don't fool yourself, the economy is getting worse.
Kirkland let go of 20 associates about 2 weeks ago and bent them all over by having them all sign confidentiality agreements as a way of trying to keep them quiet so as to protect the "image" of Kirkland.
My sources tell me now that 30, yes that's correct, THIRTY, more will be getting let go beginning around Thanksgiving. Gotta make space so that all the first years have plenty of room for sitting around doing nothing.
when will dewey announce what's happening to the class of 2010
Anyone laid off this late in the recession is dead weight: dilatory and inane.
For those minions taking the LSAT, let me help you comprehend this:
Laid Off Person ---> Dilatory & Inane
3,
Do not question, challenge or in any way try and cast Obammy The Almighty Teleprompter Stooge in a bad light. You have unfortunately left me with no choice but to call you a racist.
Its one thing for anonymous posters to use the term Third Tier Toilets ("TTT") to refer to low ranked law schools. Its another thing for the article's writer and editor to use the term in the body of the posting. The term is utterly juvenile and its use detracts from the quality (or lack thereof) of postings on this site.
This post now has purpose; thank you, 6.
More layoffs are impending, whether you believe it or not. The math just isn't there for BigLaw anymore; just look at Kalis. Laying off senior associates and not hiring first years is the only thing that's going to keep many firms afloat in this economy.
3 here. If Bush had done the exact same things as Obama has done with the exact same results Pelosi and the Democraps would be calling for his impeachment. People have got to just realize and admit that the stimulus has failed, things are not getting better, and they likely won't. On this Yom Kippur, I pray that I am a moron and that I am completely wrong. I am probably right on the first part.
History will coin the phrase "Obamanation Era" to describe the present period of economic decline that has racked this nation and will continue to do so for the next few years. Obamacrats and blind supporters will always point the finger at the prior administration and harp on the alleged failures of Reaganomics but ask yourself, what has the current Commissar and the Democrat controlled Congress done to ameliorate or economy? I would prefer they do nothing and let the markets iron out on its own. However, the Commissar is taking a broken piece of porcelain and breaking it into more pieces so that it will be much harder to fix the current economic tsunami. Is this the change you bargained for when you cast your foolish vote last November?
This post is addressed to commenter No. 8:
I agree that the use of the term "TTT" is insensitive and derogatory.
In my circle we most usually refer to non-preeminent, non-peer schools or firms as (you guessed it) non-preeminent and non-peer schools. This correctly relates the truth of the matter without resorting to terms that include the word "toliet".
12
The system is broken and Republicans broke it like a bull in a china shop with massive deficit spending and deregulation and mindless flag waving.
The only problem with Obama is that he's trying to fix it using standard (centrist) wisdom in Washington and that may not be enough. In short, the half measures in light of a determined Republican opposition may not be enough to save the economy in the long run.
PE is Lat. I wonder who JE is.
i heard that F&J Houston had staff layoffs and possibly more...
Offers coming out of OCI were down *way* more than 20% at HLS. The Bloomberg story refers to first-round (i.e. screening) interviews. I'd guess the median number of callbacks at HLS was three or four, leading to one or two offers.
F&J did have layoffs.
3, 7, 11, and 12:
You are absolutely correct! The Great Recession started on January 20, 2009. My administration had nothing do to with it. Everything was fine when I left office. I only wish the smart lawyers on this site could've figured out a way for me to run for a third term so that this catastrophe could have been avoided. Good luck to you all, and if you're ever in Dallas, please be sure to stop by my Presidential Library.
11, you're wrong: Pelosi and the Dems lacked (and currently still lack) anything close to resembling the spine necessary to initiate Impeachment proceedings--don't want to rock the boat for '08/midterms/health reform/etc.!! Cheney was about as bad as it gets, and ole' Skeletor couldn't/wouldn't try to get rid of him.
--Neither a Republican nor a Democrat
Bush largely abdicated responsibility for the economy in 2008 before the elections. He just didn't care. Shovel enough money at the mess and hope that something worked using the national credit card.
16, 18
STILL more layoffs are coming. Enjoy.
21 -
You Lie! I had nothing to do with it. My hands are clean!
When your law firm has McKinsey consultants coming around to investigate every aspect of the firm, you just KNOW that there will be layoffs.
3 here. Not crediting Bush - just saying that Obama is not getting the job done. Are you really still talking about Bush? You're guy promised what he couldn't, or at least, didn't, deliver. Deal with it.
The ship be sinking...
The last time I saw MRR he was playing for the Albany Patroons in the CBA. Do you still do coke?
Suck my ass, Mystal, you racist homo walrus!
Jake
24 - Agreed. Exactly what happened at my firm. McKinsey also made some show of soliciting associate opinions - only 2 days before the final report came out. Yeah, I'm sure that associate data was definitely included in the final conclusions.
It's 11am ET and this is all you guys have posted today?
This post is addressed to commenter No. 12:
You doddering old fool! Has your Viagra addled brain lost command of the English language?
"what has the current Commissar and the Democrat controlled Congress done to ameliorate or economy?"
I think you mean "our" - not "or."
"I would prefer they do nothing and let the markets iron out on its own."
I think you mean "their" - not "its."
PE--
Your failure to comprehend the direction of this country is either 1) foolish or 2) willfully blind.
This economic crisis is going to haunt the memories of young voters for decades to come. The way wallsteet has played with the fate of the entire country is going to go down in infamy.
President Bush's removal of the wall between personal banking and investment banking will not be forgotten. People's 401K's evaporated. Their personal savings had to be spent due to layoffs. Those who had more than the FDIC limit in savings fretted over losing their money to a failing bank.
Plus, until you can show that you're a better economist than those who have already shown that Obama's administration has saved 1 million jobs, and could create/save 3.5 million jobs before next year...then you're living in a fantasy world. (Maybe the administration is too, but until you can prove it...your claim is no more reliable than theirs.)
Fess up. You only care about your own money, and if the rest of the world goes to hell, you'll laugh your way to the bank. Your perspective cannot be trusted.
Signed up with a temp agency and got some work. During the interview the COO asked, since I'm a former law firm associate, would I be willing to take on "super contract attorney" work, i.e., research, memo writing, etc. Seems the firms may be realizing they've cut too deep. Or maybe they're going to cut even deeper and hire back "Super Temps" to do the same work at cheaper rates.
So it goes, eh? On my first true doc review experience as a temp. Pretty crazy. But it's all towards one goal: debt freedom (http://laidofflawyer.wordpress.com)
"Super contract attorney"?
What the hell is that? Where they pay you $23 per hour for 10 hours, 6 days a week, and no health insurance?
Sign me up!
6, I respectfully disagree. Well...I sort of disagree. The overall state of the economy is not really wants important as far as law firms are concerned. What it's important is the level of corporate activity, clients' willingness to pay for legal services, and opportunities for institutional investors to make money. This article was linked on Google Finance today:
http://economictimes.indiatimes.com/markets/global-markets/Wall-Street-up-on-robust-corporate-activity/articleshow/5065391.cms
This is a good sign.
I know, I know. Terrible grammatical errors in my post....Drank too much yesterday, my apologies.
35
Actually I was told it would be about $60-$80 an hour. New market so we're setting the rates.
33/37 - What city are you in?
New York
If you make it there - you are probably miserable - New York New York - start spreading the news - I'm getting laid off today
I am not working today nor am I going to temple. shhhhhh...don't tell mean partners....shhhhh
40
what firm, what city?
41
well, yom kippur is supposed to be a day of atonement; you can always atone for the assfucking you're giving your clients with overpriced and shoddy services.
42,
40 here - former New York New York biglaw associate tpw
Yes 43, but I do have the courtesy and decency to give them a reacharound. I was raised well.
Is Proskauer failing?
its sad. I called brooklyn da to do pro bono work and they turned me down because they have too many deferals from big law. i can't even give away my services!
The DC toilent known as Hogan and Hartson is firing 40 midlevels across all its offices. Hardest hit is the DC office. The firings are under the guise of "performance". Within the next 3 weeks, all midlevels will be told that they will be out of work, with no severance. Hogan is a gutter of a law firm, thanks to Warren Gorrell, who has single handedly screwed this place up. Thanks Warren G. You are worth the $12 million you take home every year.