The jobs picture, at least the sliver reflected by the initial jobless claims numbers, remained stagnant this week. Initial claims decreased for the third straight week, but the decrease was less than predicted (of course).
Not only are claims at a level higher than at the end of 2009, they’re just muddling along at about the same level we hit in November. Since most of us work in major metropolitan areas, news that those were hardest hit isn’t particularly welcome, either.
The lack of job creation isn’t really affecting the markets, though. Over the same three-week period, the S&P 500 has had three straight weekly gains. Although that’s due in no small part to the Fed keeping the discount rate near zero. Things should get interesting when the housing-market support expires, unemployment benefits get extended, and the US-China trade tiff heats up.
But law firms have circled the wagons and are focused inward as they try to sort through the effects on the sector.
Their efforts after the jump.
The good news is that the 18-day stretch without a layoff that was interrupted by three firms’ layoffs last week may have started again. There was also bonus news from Baker Botts and Mayer Brown, and a salary thaw at Covington & Burling in California (but not DC).
No layoffs were reported at major firms this week…
Chadbourne & Parke rescinded offers to 11 would-have-been incoming associates from the Class of ’09. The rule for the Law Shucks Layoff Tracker is that you have to start work to count as a layoff when you’re let go. That’s little comfort to those affected, but at least the waiting is over. Most people seem to prefer knowing bad news to lingering uncertainty. Kash has done her part to reduce the uncertainty, rounding up start dates for those currently deferred.
We also only track law-firm layoffs, so we don’t include the 329 employees laid off in the California courts system.
The (London) Times reported an interesting trend: a number of firms have increased their bank borrowings (HT: ABA Journal), rather than requiring increased capital contributions from partners or retaining more earnings.
Curiously, there was no discernible correlation between debt and layoffs (given an admittedly small sample). It was no surprise that the two most highly leveraged firms, Clifford Chance (£96.8 million) and DLA Piper (£87.9 million), ranked highly on the overall top-ten layoff list, coming in at #5 and #2, respectively. But two of the debt-free firms, Linklaters and Allen & Overy, also ranked highly – #7 and #3, respectively.
Firms’ borrowing from partners is entirely different from students’ borrowing to fund tuition. Elie called out the hypocrisy of one law professor who is chiding trade schools for churning out deeply indebted graduates with slim job prospects in our favorite article of the week.
Meanwhile, the ABA Journal caught up with three Simpson associates who took advantage of the firm’s fellowship program to spend a year at a nonprofit, after which they’ll return to the firm (fingers crossed). They’re enjoying the work, feel challenged, etc. But the reporter didn’t catch us up on one sentiment that was innocuous at the time but has taken on increased significance. Here’s how they felt at the beginning of the program:
And despite the surge in layoffs at many top law firms, all three are confident their jobs at Simpson Thacher will be waiting for them when the year is up. Not only have they received repeated assurances from the firm (“over and over and over,” quips Harlene Katzman, the firm’s pro bono counsel), but they are convinced their newly acquired skills and experience will make them even more valuable to the firm.
We’re dying to know if they’re still getting those assurances and how confident they are these days. We’d also like to know if they’re considering getting off the BigLaw train entirely. Do they think they’ll be missed if they do? It’s not like we can rely on surveys to explain how people feel about their deferrals.
On the whole, the legal sector seems to be settling down – not that anyone should be feeling complacent. If events of the past year have shown anything, it’s just how fungible and disposable staff, associates, and even partners, are. That’s why Hiring Partner’s advice to present a positive attitude should not be ignored. Firms are still looking for an excuse to shed people, so don’t let a (visible) bad attitude be the reason you’re chosen.
We used to say, "there’s always work at the post office" (quoting Hollywood Shuffle); the 2010 version is, "there’s always work at the Patent and Trademark Office." It doesn’t roll off the tongue as easily, but you don’t have to be a lawyer, either.
Better yet, learn Russian. Or just drop out of the whole rat race and see the world, like one former Paul Weiss lawyer has been doing for the past two years.
In the conclusion of the article on Law Shucks, we provide the running tally for the week (hint: zero), month and year.