Biglaw, Layoffs

Lies, Damned Lies, and Statistics: Some Thoughts on Stealth Layoff Calculation

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Last Friday, we reported on stealth layoffs at Nixon Peabody. We’ve previously discussed the difficulty of reporting stealth layoffs. If a firm lays people off slowly, over a long period of time, and refuses to admit it, sometimes the firm can keep the information from becoming public. In the Nixon Peabody case, the firm has still not confirmed the layoff news (unlike Foley & Lardner, which got around to confirming the layoffs we reported on last Friday just yesterday). But Nixon also hasn’t called us asking us to correct anything, which firms often do when they believe we’ve erred. The tipsters who have been laid off from Nixon continue to maintain that they were laid off from Nixon.
In any event, apparently some people think that reporting on people losing their jobs is more hype than substance. Tipsters sent in this post from 3 Geeks and a Law Blog:

Back in February, when the big round of layoffs were taking place, I took it upon myself to take a snapshot of most of the AmLaw 100 rosters via their websites. Nixon Peabody, of course, was one of these. So, I thought I’d dust off that list and compare it to today’s roster of employees. What I found was pretty interesting, but didn’t seem to be as dire as I’ve been reading in ATL or Law Shucks.

A firm’s website is only one part of the story, but let’s check out that part of the story, after the jump.


Even Greg Lambert, who ran the website subtraction test, admits a few of the obvious flaws in such an analysis:

I identified who was new to the roster, and who was no longer on the roster. This is not a scientific comparison, so please take into account that there could be a number of reasons for the “new” and “missing” roster members, such as name changes from marriage or divorce, and things like partners that have moved to different firms rather than being laid off.

One might also point out that a time-lapse website comparison isn’t going to catch people who were never on the website in the first place — you know, like some first-year associates (firms vary on whether they list them if admission is pending). A website analysis also won’t catch people who have been told they have three months to find a new job but can stay on in the interim.
All that said, here are the numbers for Nixon Peabody:

So, there does seem to be a net loss of 19 attorneys since the February snapshot. However, there has been an increase of 6 paralegals, and I’m pretty sure I haven’t been hearing anything about hiring at BigLaw firms. What I’m seeing from these raw numbers is that there is still movement within the firms (at least this single one I unscientifically surveyed), but I’d be cautious to buy too much into the hype of secret layoffs without digging a little deeper into the facts surrounding the comings and goings of these attorneys.

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Let’s be clear, Nixon admitted that it laid off 20 associates and 36 staffers in February. This guy’s control group is the February website, so I have no idea if his base numbers include or do not include the announced February cuts.
The real problem with this analysis is with looking at net associate headcount. I’ve talked to a lot of laid off lawyers. By and large, they don’t give a damn about the net headcount at the firm. Replacing a fifth-year with a first-year associate, or with a lateral in a busy practice group — yes, the lateral market has started to pick up, or so our recruiter friends tell us — still represents a fifth-year associate who had a job, wanted to keep having a job, yet no longer has a job. (And, if that fifth-year was replaced with a first-year, the firm saved money.)
Despite the problems with the analysis, which even Lambert cautions is “unscientific[],” Bob Ambrogi at Legal Blog Watch is really pumped to have some numbers, any numbers:

Lambert’s findings do not necessarily disprove the reports of layoffs at Nixon Peabody. But at least Lambert adds some tangible facts to the mix of reports otherwise based on unnamed “tipsters.”

It seems to me that website attrition analysis is a useful part of the story, and the numbers Nixon’s IT department has put up on the web are interesting. But more accurate information can often be gleaned from talking and meeting with actual associates and partners. Those people have information that is never going to make it on to a law firm website (which, let’s recall, is a form of lawyer advertising).
Our sources don’t have overall numbers, and Nixon won’t admit to the overall numbers (as they did in February). That is pretty common when dealing with stealth layoffs. I know it is somewhat unsatisfying, but the only real fact available is the reality that Nixon Peabody has been laying people off over the past few months. We don’t know how many, but we know it is happening, because people who used to have jobs and wanted to keep them no longer have jobs. We’re not making it up.
If you are out on the market right now trying to get back into Biglaw, after your firm has laid you off and won’t even admit it, you are suffering from a lot of things. “Hype” is not one of them.
P.S. It’s also important to note that criticisms like Lambert’s relate primarily to stealth layoffs; they do not call into question the accuracy of the vast majority of our layoff coverage (despite innuendo to the contrary). As Lat points out in the comments of 3 Geeks and a Law Blog:

[F]or the record, these days most of our information about layoff numbers comes from (1) an official firm statement released to ATL in response to an inquiry, (2) an internal memo leaked to ATL, or (3) an authorized firm representative giving us official numbers, but on background (i.e., they don’t want it known that the numbers came from the firm).

It could be that the firms are lying to us. Unfortunately, we don’t have a good way of determining that.

So, if anything, our layoff numbers may understate the number of departures. Our data is often based on what firms officially report, either internally or to us; but we’ve heard of firms that will both put out an “official” number of layoffs and then, on the sly, get rid of additional lawyers for “performance-based” reasons.
Are Above the Law and Law Shucks Layoff Alerts More Hype than Fact? [3 Geeks and a Law Blog]
Law Firm Layoffs: When the Facts Obscure the News [Legal Blog Watch]
Earlier: Nationwide (Stealth) Layoff Watch: Nixon Peabody
Nationwide Layoff Watch: Nixon Peabody Lays off 20 Attorneys, 36 Staff

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