Biglaw, Layoffs, Musical Chairs, Outsourcing, Partner Issues, Staff Layoffs

Two Partners Leave Paul Hastings for Nixon Peabody
(Plus Paul Hastings staff layoffs.)

During 2011, Paul Hastings has been picking up partners. We previously mentioned their acquiring two prominent leveraged finance lawyers, Michael Michetti and Rich Farley, from Cahill Gordon. Additional hires, including Michael Baker from Shearman & Sterling and Steven Park from Finnegan Henderson, are listed on the PH website.

Like any large firm, however, Paul Hastings loses partners too. We’ve just learned of two partners who are ankling PH for Nixon Peabody.

Let’s find out who they are, get the backstory on their departures, and also obtain the 411 on some PH staff layoffs….

The partners in question are Alan Cohen and Mark Kreitman, both corporate. According to their Paul Hastings bios (via Google Cache), Alan Cohen focuses on “partnership law, joint ventures, public and private placements of limited partnership interests, syndications and state securities law,” while Mark Kreitman “concentrates his practice in the area of affordable housing and tax credits.”

Paul Hastings spokesman Allan Whitescarver confirmed that Cohen and Kreitman are leaving for Nixon Peabody. “We wish Alan and Mark the very best at their new firm,” he said.

What prompted the departures of Messrs. Cohen and Kreitman? Some say that they were pushed out of Paul Hastings by corporate partner Barry Brooks, chair of the New York office. Their last day at the firm was yesterday, we understand.

As for the Paul Hastings staff layoffs, they affect the word processing department — or Document Processing Services (DPS), in PH-speak — and result from outsourcing. Here is what we learned from spokesperson Allan Whitescarver:

I can confirm that over the next five months, Paul Hastings will eliminate approximately 45 positions in its Document Processing Services (DPS) department. Most of the positions are currently located in our Los Angeles office. Our firm has entered into an agreement with RR Donnelley under which RR Donnelley will assume responsibility for providing all global Document Processing Services to Paul Hastings, services which are currently being provided by Paul Hastings’ employees.

Forty-five positions is a not-insignificant number. It’s uncommon to see staff layoffs of this size nowadays (although that could change if there’s a double-dip recession).

On the bright side, the outsourcing is taking place slowly, and the affected employees are receiving generous severance. Again, per Whitescarver:

This transition will take place gradually and in two stages, with the first hand over of approximately 25 positions to occur on November 30th of this year, and the second hand over of an additional 20 positions on January 11, 2012. Current DPS team members have been offered a transition package that exceeds industry norms, including more than 90 days’ notice, a severance program and a performance bonus.

We understand this is difficult news for our employees to hear and we are focusing our efforts on offering them both the time, financial incentives and outplacement support to help them through the process.

This certainly is unfortunate news for the DPS employees. But the outsourcing of word processing functions is not new. For example, Orrick went down this path back in 2005.

And it’s probably going to increase rather than decrease in the years ahead. It seems that a growing number of firms are outsourcing this work to Donnelley and similar companies, as Whitescarver noted:

RR Donnelley is a leading provider of integrated communications globally, including proven expertise in providing DPS for a number of leading law firms — Milbank Tweed, White & Case — as well as other top global organizations such as Goldman Sachs and Morgan Stanley. Paul Hastings made this decision to ensure that we continue to meet our clients’ expectations for more efficiency and value in our service delivery.

Efficiency and value are the themes of the day in Biglaw. Obstacles that stand in their way get removed.

Good luck to Alan Cohen and Mark Kreitman at Nixon Peabody, and good luck to the former Paul Hastings staffers who will be seeking new employment. Someday we will all get replaced — staffers, lawyers, bloggers — by smart machines. But until that day comes, your services are wanted and needed.

P.S. We’ve heard vague rumblings about a possible shakeup at Nixon Peabody — most likely in the Chicago office. If you have details, please feel free to email us or text us (646-820-8477 / 646-820-TIPS). Thanks.

Earlier: Musical Chairs: Paul Hastings Snags Another Leveraged Finance Partner from Cahill
The 2011 Am Law A-List

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