Law Shucks, Layoffs

This Week in Layoffs: 12.20.09

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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.
You take the good, you take the bad, you take them both and there you have the facts of modern American unemployment. In this case, the good is that unemployment decreased in 36 states in November. The bad is that first-time claims were higher than expected last week.

We try to be optimistic (see, e.g., the Law Shucks Bonus Tracker), but it’s tough. Take that "good" news, for example. Not only does that mean that unemployment was up in 14 states (we’ll ignore DC and PR for now), but it’s hardly "good" news that the unemployment rate was "only" 10.6%, as was the case in Kentucy, which was down from 11.3%.

Commenters love to debate what got us here, but the general public isn’t happy about what’s being done to fix it. A majority of Americans disapprove of President Obama’s handling of the economy (and healthcare, but that’s beyond the scope of this column). Those two issues have caused his overall approval rating to plummet as well, down to 50%, from 69% less than a year ago. He’s keeping a positive mindset about the whole mess, though, saying that he’s more concerned about how he’s positioning the country for the future and giving himself a "B+."

Obviously, he’s down with his alma mater’s stance on grading curves (read: grade inflation). At least he didn’t throw big-firm lawyers (directly) under the bus like he did our bank clients, blaming the recession on "the irresponsibility of large financial institutions on Wall Street that gambled on risky loans and complex financial products, seeking short-term profits and big bonuses with little regard for long-term consequences."

This column covers the gamut of law-firm economic developments, and we were fully expecting to not be writing about any layoffs per se this week.

Whoops.


Last week we noted (on the first night of Hanukkah) that layoffs had slowed to a trickle as the holiday season got into gear. So we were completely, and unpleasantly, surprised to learn that not one but two AmLaw 100 firms laid people off this week. Sonnenschein laid off staff and Mayer Brown’s London office let four partners go (or they just resigned … in the midst of the worst environment for corporate lawyers since that guy wanted to kill himself over the enactment of the ’33 Act), not clear which) and started a redundancy consultation for up to eight more associates.

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We were also amazed to learn that a very slight majority of ATL readers would actually prefer getting it over with before the holidays, rather than blissfully, and ignorantly, enjoying the season. So we’ll spare those firms the lambasting we were going to give them about being so short-sighted and pennywise as to ruin people’s holidays in order to save an infinitesimal amount (relatively speaking).

Normal people would have thought there wouldn’t be much discussion of deferrals right now, either. Surely the folks who were told months ago that they’d start in January could assume that silence was confirmation, right? Not so much. Brian Baxter did amazing legwork at AmLaw Daily and hunted down information on 43 firms that had announced deferrals. That undertaking was inspired in no small part by word that Nixon Peabody waited until the middle of December to re-defer people who had planned to start in January. Kash has gone and organized the information a bit better in this post.

The gathering trend this week was, once again, abandoning lockstep. At Law Shucks, we wrote about how that’s a completely misguided effort that fixes a problem clients never complained about. We’ll just add that associates should be ware. Holland & Knight admitted that it will be balancing a host of objective and subjective factors. Historically, the benefit of discretion has never tipped toward associates, plus, breaking lockstep only does any good if the firms can lower the aggregate cost of associate salary, so get ready for some pain. Seyfarth Shaw, Sonnenschein, and WilmerHale are among the other firms announcing some degree of breaking lockstep this week, and Kelley Drye is getting some ink as the first true NY firm to do so.

For all the doom and gloom, some firms do bring the good news. Among the firms added to the bonus tracker this week was Allen & Overy, which also "un-thawed" salaries.

As always, the final numbers are in the full version on Law Shucks.

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Also, we won’t be writing this column until the new year, but the full-year review of layoffs will go up some time in that dead week between Christmas and New Year’s so please keep an eye out for it on Law Shucks (we’ll also be doing a broader, lighter look back at our first year of blogging during that same timeframe).\

Happy Holidays!

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