This Week in Layoffs: 10.26.09
Ed. note: Above the Law has teamed up with Law Shucks, which has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.
We took the week off last week, but you didn’t miss much. In fact, we had another run of almost two weeks without a layoff, before WilmerHale laid off 57 staff. But we’ll get back to the layoffs after our regular sojourn through the broader American economy.
If you’re a regular reader of this column, this should sound familiar: initial jobless claims were worse than expected. 49 states and territories reported increased unemployment, with four seeing improvement. To the extent you believe this is a recovery (and even if you do, whether you believe this is sustainable is another question entirely), it appears to be jobless at best, and job-losing more likely.
Companies are salvaging net income numbers almost entirely on the expense side, and the stimulus has done nothing to create job and nothing demonstrable to save jobs. Just ask the Republicans, who point out that President Obama claimed his stimulus would create 3.5 million jobs, when the actual result has been a loss of 2.7 million - a 6.2 million-job deficit.
Part of the frustration, of course, is the long-running treatment of disillusioned jobseekers and people whose benefits have run out as not being counted as unemployed. When minor improvements in unemployment numbers were being hyped a few months ago, it now appears that was almost entirely the result of people falling off the rolls, not actually finding gainful employment. Maddeningly, that means 7,000 people a day are no longer counted as unemployed.
As usual, law firms continue to muddle through. Their efforts, after the jump.
During our absence, there was some interesting debate on whether Law Shucks and ATL are hyping layoffs. Greg Lambert at 3 Geeks and a Law Blog used ATL’s report of layoffs at Nixon Peabody as an opportunity to step back and see if there was any fire behind that smoke. He concluded that it was basically hype, because the firm had, according to his analysis, only a net loss of 19 attorneys since February.
We went into even more detail on his own data and showed that not only have the departed associates from Nixon Peabody not reported subsequent employment for the most part, but almost all of the hiring was foreigners and first years. Elie also rebutted, pointing out the difficulty of nailing firms down on layoff numbers (which tends to lead toward underreporting) and, more compellingly for our audiences, that affected attorneys simply don’t care about net numbers.
Inspired, Lat went and did some analysis of his own on another firm, extrapolating that Winston & Strawn had quietly reduced its headcount by 21% - even being as generous as he could in the assumptions, Winston would have laid off more than 100 lawyers in the past year. And let’s get off our high horses here, there is no nobility in stealth layoffs and it doesn’t protect the dignity of the affected associates. It’s entirely self-serving behavior by the firms, so we at Law Shucks would frankly prefer they just be candid about their no-comments, rather than pretending they’re doing anyone a favor by keeping quiet.
As the Nixon Peabody and Winston & Strawn analyses demonstrated, it’s difficult to extract accurate information from firms that aren’t forthcoming. Legal Week did some similar digging and discerned that Ashurst’s partnership is down by 10% this year.
Foley & Lardner laid off 39 lawyers earlier this month, but now claims the layoffs are over. Don’t confuse that with having enough work for its lawyers; while some lawyers will start "on time" (that’s in quotes because on time really means September/October in the year of graduation) in January 2010. The rest, including all IP assosciates, are reportedly deferred out until September 2010 with a $5k/month stipend.
So Foley is at least trying to keep up appearances. Squire Sanders is completely throwing its hands in the air, "indefinitely deferring" half of its incoming class. To ensure that everyone is in the same angst-filled boat, the firm also reported that cuts in the existing ranks are pending.
At this point we’re just scratching our heads at firms that are deferring associates that far out. Should they take the 2009 graduates, on the assumption that they’ve done something useful in the year off that will make them better lawyers, or just write them off and start with the fresh blood from the Class of 2010 and clear out the logjam?
Meanwhile, the particular area of focus for "innovation" is associate compensation. A number of firms are getting off lockstep, and that’s leading to reports of salary cuts. Dorsey & Whitney is one such firm, with the cuts to base pay being reported as flat comp cuts, although the "makeup" opportunity hasn’t come to pass yet. As firms pay lip service to the notion that the same overall compensation package is still achievable, we have yet to see what the final bonus numbers will look like. Meanwhile, people’s checks are getting smaller.
Finnegan Henderson is holding the line on salaries (with the new de rigeur reduction of first-year pay to $145,000), and rumors of stealth layoffs at the firm abound.
Harkening back to the days of the salary escalation, there are again signs of fracturing salary scales at firms with national presences. Morrison & Foerster is one firm that is reducing first-year salaries to $145,000 in all offices, except New York. California colleague Sheppard Mullin is spreading the pain without regard to cost of living.
We usually try to close with some good news, but the best we’ve got right now is word that, contrary to reports from the UK, Vinson & Elkins is one firm not giving the stink-eye to laid-off associates. At least those from Columbia and NYU.
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Comments
first?
what's going on at Milbank?
If you have time to read or comment on A.S. Byatt's "Possession," while on the clock, then you deserve to be laid off, even if you are a preeminent law graduate and are not nescient or dilatory.
I have not known one person who was laid off and who was hard working.
PE was spotted at Ivanka Trump's wedding with a woman half his age.
5
Given PE's predilection for the cock, I would venture to guess that the "woman" half his age at the Ivanka wedding had a taped up package and an Adam's apple visible with stubble visible despite the heavy pancake.
I doubt there are any people who got laid off in BigLaw that didn't deserve it.
Mission Accomplished!
This could be a useful column if it wasn't politically charged and if it performed some real analysis.
There are firms that are doing well, there are firms that are doing worse than they let on, and there are firms that are in serious danger of sinking. Why not try to use your time to put a few firms in buckets? THAT would be useful. What you have here . . . is not.
The ship be sinking...
Is it true that laid off associates in Big Law are required to suck dick in order to get their severance pay? Just wondering, since they all seem to have dribbles coming down their chin when they leave the building.
Security Guard.
11
Dribbles are better from the chin because you don't see the dribbles coming out of the ass.
Hope and change has brought economic chaos to many regions such as Atlanta, Georgia. It seems that this year more folks will have filed for personal bankruptcy than during any of George W. Bush's last 3 years in office. It couldn't have happen to a better lot of people. Most of these folks voted for hope and change and are certainly getting it.
http://atlanta.bizjournals.com/atlanta/stories/2009/10/26/story5.html?b=1256529600^2309281&ana=e_vert
not gonna lie I took it up the ass to get in and up the ass to get out...yay bb
PE, I think I saw some dribble on your chin this morning. You might want to check the mirror. You also might want to wipe your ass just in case.
14, was it everything you had hoped for?
The Bush Administration ruined this Country for at least 20 years.
You said: "President Obama claimed his stimulus would create 3.5 million jobs, when the actual result has been a loss of 2.7 million - a 6.2 million-job deficit."
I think you're misunderstanding Obama's prediction regarding the effects of the stimulus. Obama didn't claim that the stimulus would replace all the jobs lost due to the recession and then go on to create 3.5 million additional jobs. Rather, Obama claimed that, compared to the amount of jobs predicted to be lost due to the recession, there would be 3.5 million more jobs. E.g., to use some hypothetical numbers, if America would lose 9 million jobs WITHOUT the stimulus, then WITH the stimulus it would lose 5.5 million jobs (i.e., we'd still be 3.5 million jobs better off, even though there was net job loss). So, Obama could be correct that the stimulus created or retained 3.5 million jobs even if the stimulus didn't result in a net job increase.
To be fair, I don't know how many jobs the stimulus created or retained, so his prediction still might be wrong -- I just wanted to clarify what he meant.
Obama didn't say he would "save" jobs. He said he would "create" jobs. I give you a 9 on the mental gymnastics though.
18 - don't drink the Kool Aid so quickly, you might spill
Obama is totally and completely full of shit. For all you younger attorneys out there, Obama has well and truly fucked the life out of your lives. For us older farts who didn't vote for the asswipe, we've made our money, now we've got to figure out how to keep most of it from the commies in DC. if you voted for Obama, then I really don't give a shit what happens to you, because you deserve what you get.
Why would businesses want to hire now, knowing that their taxes and regulatory burden are targeted to be dramatically increased? Why would anyone want to spend now, knowing, e.g., that their health plans are about to be taxed and their own taxes about to be increased?
Why would anyone want to spend now knowing that the value of their savings is already being demolished with a plummeting dollar so that Obama can give hundreds of billions of dollars of taxpayer money to his campaign financiers, the banks and Realtors?
No new taxes on anyone making under 250,000, let me introduce you to Mr. Taxed Health Plan - a HUGE new tax, thousands of dollars a year, on a large number of people who are not rich, but have decent health care today, if not for much longer.
So it looks like Obama LIED, LIED, LIED about not imposing new taxes on the middle class! Otherwise, they could just exempt anyone making under 250k from the tax on health plans, right?
No new taxes on anyone making under 250,000, let me also introduce you to Mr. Inflation - not only will we be taking thousands of dollars in new taxes, we'll also be making the dollars you get to keep worth dramatically less!
So should we expect that he will otherwise be honoring his pledge not to further tax the middle class? Should we expect that will be honoring any statement that he doesn't intend to give free health care to criminals who ignore our border, tax, and other laws? Of course not.
He intends to do all of those things, one step at a time, and the idiots too stupid to see through it deserve the government they will get.
This reminds me of the time that Dave Miller fought the indians
22 - Right, Republicans, the BASTION of fiscal responsibility...where were you between 2001-2008???
This whole idea of 'layoff tracking' is a joke, especially when resorting to statements like "we had another run of almost two weeks without a layoff." First, there are tons of firms out there, many of which are top-200 (if not top-100) firms,that don't 'announce' layoffs and fly under the radar. Also, there are constant levels of 'stealth' layoffs of associates and staff at many firms that also escape media attention. So to claim that all legal layoffs are being tracked, or that x number of days passed without a layoff, is absurd. I would lay goo d money on the proposition that fifty or more employees at medium-to-large law firms have been told they were being let go over the past couple of weeks. But there's no way to prove it. It is much more realistic than stating that you've gone two weeks without a legal layoff.
Oh, woe is us...if only we had elected a semi-senile man from Arizona and a space-case from Alaska, I just KNOW we wouldn't be suffering through this Obama-driven recession. And then the lemonade would start falling from the sky...what a load of crap. For all you posters who think this entire mess is Obama's fault, you are well and truly insane. But it's OK, denial is NOT just a river in Egypt. PE?? FU....
24,
22 was probably reading the budget and seeing deficits A HELLUVA LOT SMALLER
24,
22 was probably reading the budget and seeing deficits A HELLUVA LOT SMALLER than the ones tax-and-spend Demoncrats are passing. Enjoy your 2 decades of anemic growth.
7 - When there is a mass layoff, people get canned for all sorts of reasons. If you think that all associates who survive are better lawyers than those who are laid off, you are delusional.
9 is right. This LawShucks thing started as a useful exercise in layoff tracking, and at the time it helped present a useful if simplified picture of the state of the legal market.
Now it can only justify its continued existence by insisting that the legal market continues to decline, despite the fact that most every post since the beginning of September has noted, however quietly, that very few layoffs are occurring, that the market for laterals has started to show life, and that several practice areas have seen an uptick in work.
The legal market is no longer in collective free fall. Pretending, as LawShucks continues to do, that everyone's fate is certain doom but for the timing is asinine.
Marshall Dennehey, Pottstown, to $44 k !
24 -- you are absolutely right. I believe that the last administration, who happened to be Republican, for 8 long years, left this country on the brink of financial collapse (they don't like regulation), deeply in debt for a war and other significant donations to their corporate friends in the name of TARP, none of which most taxpayers wanted and well, they didn't have time to deal with healthcare in 8 years under any measure but seem to have an awful lot to say now. Hmmmmm