Back in February, Nixon Peabody laid off 56 employees. The firm was public about its decision to lay off people at the time.
But sources report that over the past few months Nixon has been conducting additional layoffs — only this time the firm is being very stealthy about the departures. Multiple sources state that the firm casts these reductions as performance-based, but the performance issues are simply low hours during the recession. One tipster puts it like this:
[S]tealth layoffs of associates are happening in a number of different including San Francisco … and D.C. A number of second and third years (since we have no first years yet) have been told to pack their bags. They are being called performance-based though the associates who have been let go have low hours because of lack of work. … Associates are terrified to report to work [lest] they get a call from human resources.
We also have reports of stealth layoffs in New York. And still other tipsters tell us that junior partners are being forced out as well.
This time, Nixon Peabody declined to comment about the layoffs.
But after the jump, we have information that might explain why Nixon is going the stealth route with these cuts.
It appears that Nixon is going above and beyond the normal practices in order to keep these layoffs quiet. A source reports:
We’re hearing that these associates are being told that they can’t send firm-wide goodbye emails. Unclear what the enforcement mechanism would be — if you send one anyway, do you lose your severance? — but it seemed worth pointing out.
Why is Nixon going to this level to silently push people out of the door? Here’s one of the theories we’ve heard this week:
Management is being very careful about these cuts, calling them “productivity” or performance-based, [since] the round of salary cuts that happened in May was billed to the associates as a measure to save associate jobs.
When Nixon cut salaries back in April, Nixon Peabody’s managing partner, Richard F. Langan, cited maintaining current staffing levels as one of the reasons for the cuts:
Nixon Peabody LLP has taken measures over the past several months to review its cost of doing business while keeping its commitment to providing extraordinary client service. To maintain staffing levels in the best interest of our clients, we have decided to reduce starting compensation levels for incoming associates and summer associates to $145,000 in major financial centers with related reductions in associate compensation throughout the firm’s U.S. operations.
Our associate sources report that they were explicitly told the salary cuts would save associate jobs.
Of course, that could be true. We don’t know how many associates and partners have been pushed out the door overall. If the salary cuts hadn’t been made, perhaps the firm would be laying off too many people to keep it relatively quiet.
As end of the year reviews start heating up, we’ll keep an eye out for other firms that are making “productivity layoffs.” Please email us with your tips. Thanks.
Earlier: Nationwide Layoff Watch: Nixon Peabody Lays off 20 Attorneys, 36 Staff
Salary Cut Watch: Nixon Peabody Can, So it Did