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.
For a while there it would look like the first consecutive weeks without layoffs since this time last year (by our reckoning, you have to go back to the weeks ending October 9 and October 2, 2008). Alas, one firm did come through with staff layoffs, about which more after the jump.
As usual, we begin with the US macroeconomic picture, and as usual, it ain’t pretty. For the week, the S&P 500 was down about 2%. That was the second straight week of losses, and the DJIA had its biggest weekly decline in three months. 263,000 net jobs were lost in September and the unemployment rate rose to 9.8 percent, despite perhaps the technical end of the recession. As with the stock market, bad results are one thing, but results worse than expectations are another, and that was the case here. Consensus estimates were net losses of 175,000, so the actual results were way short. August’s revised numbers were slightly better than original reports, though.
The poor results are creating pessimism around when things will start to turn around:
[T]he report also buttressed fears that economic expansion would be weak and hesitant, with scarce paychecks and economic anxiety remaining prominent features of American life well into next year.
“This is a weak report,” said Stuart G. Hoffman, chief economist at PNC Financial Services Group in Pittsburgh. “The rate of job loss has tapered off, but we still haven’t reached the point where businesses are willing to hire.”
Could this create political difficulties for the president?
If things don’t start getting better soon, even the Times recognizes this will pose problems for President Obama:
For Democrats, a slow recovery — and an unemployment rate at a 26-year high — could quickly become a liability, if businesses are not hiring by next year’s mid-term elections.
The Obama administration has said job losses would be even worse without the tax credits and spending projects from the $787 billion stimulus, but Republicans have pilloried the programs as ineffective.
Closer to home, lawyers aren’t alone in feeling one side effect of the extended joblessness:
On Thursday, Ben S. Bernanke, the Federal Reserve chairman, nodded at the problems that long-term unemployment creates for workers, saying that they risk losing skills and becoming less employable if they detach from the labor force.
In non-firm layoff news, Citigroup confirmed that its law department is down by about 300, many of which were as a result of layoffs, and some lawyers have been hit with salary reductions of as much as 60%.
It’s a big technicality, but rescinded offers don’t count as layoffs for the Law Shucks Layoff Tracker. That spares Chicago’s Wildman Harrold from making a repeat appearance, as it has rescinded its offers to ten of 14 already-deferred associates (a copy of one victim’s letter is available at Law Shucks, by the way). Those ten got hit with a double whammy: the news came from the firm within hours after bar exam results came out, curtailing any celebration; and they’re not getting any additional payment, like Arent Fox gave. Of course, the $20k in deferral comp is already far more than most people outside BigLaw would ever see for their troubles anyway.
Chadbourne & Parke is also extending the deferrals for half of its class to some indefinite time in the future. Half will start in January, and half will get $60,000 to sit on the sidelines, hoping and waiting for a callup.
Meanwhile, just across town from Wildman, Katten Muchin is moving its incoming associates’ start dates up. Six lucky graduates will be starting this month, rather than waiting until February 1, 2010 like the remaining 40 in the class.
And to make matters worse, the unspoken stigma of having been laid off is percolating to the surface. RollOnFriday reports "blatant and widespread discrimination throughout [London] against lawyers who have been made redundant." American firms are supposedly the worst offenders.
The class of 2010 continues to take shot for shot in the race for the title of "Worst Year to Graduate Law School." Instead of deferrals and rescissions, they’re facing canceled OCI (even Harvard is reporting interviewing down 20%) and historically low offer rates from summer programs. This week, Schulte gave offers to only two-thirds of its summers, but compare that with the optimism of its website, which reports the summer program going back to 11 weeks at a pro-rated $160,000 salary. Bingham McCutchen is also expecting to make offers at about the same rate.
Also keep an eye on the site on Monday for the "This Month in Layoffs – September" roundup.