The first half of 2012 was not great in terms of the financial performance of Biglaw. It wasn’t disastrous — we’re not talking about late 2008 and early 2009 — but it was certainly sluggish.

This has caused some legal industry observers to wonder: Might we see a return of layoffs? We’ve already seen significant staff layoffs in the past year, but limited lawyer layoffs. Is that about to change?

Today we bring you bad news about Winston & Strawn, concerning both full-time associates and summer associates….

We’ll start with the associate news. Multiple sources report of “stealth layoffs” at Winston & Strawn. Current reports concern the Chicago office; we don’t know if other offices have been affected as well. (If you do, please let us know.)

We don’t know exact numbers, but we’ve heard that stealth layoffs hit approximately 30 associates in Winston’s Chicago office last week. These associates have been quietly asked to seek new employment. We don’t know the departmental distribution, but we’ve heard that the majority came from the litigation side.

“Morale couldn’t be worse,” said a source in Chicago. “For those associates that were spared the initial cut, an accelerated review process this year only increases concerns that more layoffs will be coming in the near future.”

The acceleration of reviews appears to be firm-wide. According to a tipster in New York, “The review system did change — they review us earlier, I think September.”

September, of course, is just around the corner. Yikes.

Reports of stealth layoffs at Winston are not new. We’ve been hearing about them for the past nine months or so. We didn’t write about the prior reports due to their somewhat isolated nature. But now that we have several confirmed reports concerning the recent layoffs, we feel comfortable sharing with you the past reports, which the latest reports effectively corroborate.

Here they are, in chronological order. From November 2011:

More stealth layoffs at Winston and Strawn. They fired two corporate associates today. Second years. They laid off two people in litigation a few days ago. And they are going to be moving through other departments.

They did staggered deferrals for the class of 2009 with a group starting in February 2010, a group in June 2010, and a group in October 2010. The people that started in Februray were able to find work. The June and October groups were left to fend for themselves, with the assignment coordinators being useless.

After that, the class of 2010 started in January 2011, and they staffed all of them, basically screwing the class of 2009. Now they are starting to lay off some June 2010 starters from the class of 2009 because they didn’t make their hours. But they didn’t make their hours because there are too many junior associates and not enough work, and the firm didn’t want to further defer the class of 2010 to save face.

From February 2012:

Layoffs at Winston. Litigation associates. Potentially more than 30…. I spoke with one in Chicago.

From March 2012:

Heard Winston Chicago…. let go of many associates. I have heard numbers between 20 and 40. Weren’t walked to the door but they were only given a couple months. Other locations?

From April 2012:

More stealth layoffs at Winston. One fourth-year and another third-year.

Wow — that’s a lot of reports about layoffs. In fairness to Winston, it’s possible that some of these reports are duplicative, i.e., relating to the same wave of layoffs. For example, if associates were told in February that they need to be out by April, we might have heard news of stealth layoffs in February and again in April. But it’s beyond dispute that Winston had made, and continues to make, significant cuts to its associate ranks.

The layoffs announced last week are definitely separate from the prior layoffs. The affected individuals — many of whom have low hours, due to a dearth of work — have been given three months to find new opportunities (but will be cut off by the firm if they find anything sooner). It seems that these departures, in traditional stealth layoff fashion, are being classified as “voluntary resignations.”

Stealth layoffs are not classy; they essentially involve a firm blaming associates for the firm’s inability to generate enough work for them (which, if admitted through open layoffs, would hurt the firm’s reputation). But if some Winston partners believe they should be able to act however they want to associates, stealth layoffs shouldn’t come as a shock.

Now, on to the summer associate no-offer news….


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