Back in February 2009, Latham & Watkins laid off 440 people. They weren’t the first firm to lay people off, they weren’t the last, and you can even argue that they didn’t even lay off the most associates in percentage terms.
But somehow Latham has taken a bigger public relations hit because of its layoffs than any other firm. The firm fell ten spots in last year’s Vault rankings. It’s been referenced in New York Times movie reviews in connection with lawyer layoffs. Hell, people turned Latham into a verb, and not a nice verb.
Now, the latest ignominy. The verb “Lathamed” isn’t just in Urban Dictionary; it’s in the Latham & Watkins firm description in the Chambers guide:
In 2008 gross revenue slipped to $2 billion and profits per equity partner were down by 21 percent, according to 2009 Am Law data. The initial response was a number of performance-related layoffs which was followed, in February 2009, by the laying off of another 190 associates and 250 support staff members. Such was the severity of the cuts that the expression “to be Lathamed” (which, by its most polite definition, means “to be laid off”) was coined.
How did it come to this for Latham?
As most people remember, Cadwalader was the first firm to react to the recession by destroying associate careers. White & Case has taken it so bad that there have been full mainstream media spreads on the firm’s struggles.
But when you think of layoffs, you think of Latham. Why? Alliteration isn’t that powerful.
The rest of Latham’s Chambers write-up might give us a clue:
Latham was among the first of the global megafirms to acknowledge the seriousness of the economic situation and restructure itself. The package offered to the laid off lawyers was generous, including up to six months’ salary and six additional months of medical insurance coverage. Crucially, there was only one round of layoffs: a “rip-the-band-aid-off” method aimed at giving remaining associates a greater sense of security.
Regular readers of Above the Law know that the one-time-only spin is false. Latham started conducting stealth layoffs before its 440 person bloodbath, and the people who were stealthily let go in December and January didn’t receive the generous severance package given to the ones laid off in February. That kind of behavior breeds animosity from those who were quietly shoved out of the door.
Another problem is that Latham never really directly addressed the layoffs and never addressed the issues of over expansion that caused the firm to lay off so many. Sources we’ve spoken to say the whole episode made people feel like Latham didn’t really care about the careers it was ruining — almost as if massive layoffs were always part of the plan or the firm business model.
And, of course, Latham laid off first-years — people with no work experience and no chance to prove themselves, who most likely didn’t “deserve” to be laid off after just a few months on the job. And now people who have had a hell of a time breaking back into Biglaw. It’s hard to get a job when you have almost no work experience while carrying around a pink slip.
There may be another issue at play. It wasn’t very long ago that Latham was touted as the coolest law firm. People were excited to work there and bought into the the rhetoric that Latham was somehow different from other top firms. To have that illusion come crashing down so painfully — well, you can see why there is a lot of bitterness.
That bitterness is now memorialized in the Chambers guide. And pretty soon we’ll be getting a whole new Vault ranking to pore over. You wonder if this will be the year Latham starts the long road back to forgiveness.