Biglaw, Law Firm Mergers, Layoffs, Partner Issues

Nationwide Layoff Watch: McKenna Long Loses Luce Lawyers

Law firm layoffs follow law firm mergers as naturally as Biglaw firms follow the Cravath bonus scale. So it shouldn’t come as a shock that McKenna Long & Aldridge, after absorbing Luce Forward this past March, is cutting loose some Luce lawyers.

How many lawyers are we talking about? And are these actually true layoffs? Let’s discuss….

An UPDATE, after the jump.

The news comes to us from the Daily Journal (sub. req.):

Six months after merging with San Diego’s oldest law firm, McKenna Long & Aldridge LLP is already shedding lawyers – with Luce Forward Hamilton & Scripps LLP attorneys notably on the chopping block.

McKenna, an international law firm based in Washington D.C., laid off four former Luce attorneys from its San Diego office, said a source knowledgeable about the subject. The firm let go of 15 attorneys total nationwide. The source, speaking on the condition of anonymity as not to jeopardize his relationship with McKenna, said McKenna gave three of the attorneys a 30-day notice on Aug. 20. The fourth attorney was given more time. Legal experts say the dismissals may be part of McKenna’s plan to remove less-productive employees post-merger.

(If I had to guess, the source is a legal recruiter. But that’s neither here nor there.)

“People there are not happy about [the layoffs] because the merger happened with the agreement that they were going to take the whole firm,” said recruiter Larry Watanabe of Watanabe Nason LLC in San Diego. “Some of these people understood that unless they were able to get busier in a reasonable amount of time, it would be a possibility they’d be let go. But perhaps they thought they had a longer window.” He added that six months after a merger is “faster than normal” to be cutting employees.

Well, given the challenging outlook for large law firms, an accelerated timetable for trimming should come as no surprise.

McKenna chairman Jeffrey K. Haidet, based in the firm’s Atlanta office, said some attorneys did “transition” from the firm but that the firm hadn’t done anything recently in terms of organized layoffs.

“In connection with the merger, we had some conflict issues, and some partners transitioned from the firm, and as a result some associates moved with them,” Haidet said when asked about the reported 15 layoffs. “Given the size of our firm, there can be people leaving at any given time. But I can’t tie the number 15 to anything in particular.”

Ah yes — “in transition.” We think we’ve heard that expression before. But Haidet is quite right: when firms merge, there will be some partners who don’t fit naturally into the new platform, and it’s not clear that their departures should be viewed as “layoffs.”

One former Luce lawyer told the Daily Journal:

A former long-standing Luce attorney who left the firm before the merger, said he fully supported the two firms joining but felt it was not a good opportunity for him personally. He asked to remain anonymous because of his history with Luce.

“It was the best thing for [Luce] to merge, but it wasn’t the best for all the people,” he said. “For some practice groups, like real estate, the merger helped. For other practice areas, it didn’t.”

Luce Forward was San Diego’s oldest law firm and was noted for its collegial environment, Watanabe said, but rarely did layoffs and didn’t want to make cuts when it fell on difficult times. Some say Luce was struggling financially for several years, the cause of which might have been the firm’s heavy investment in the real estate market and lack of diversification. The merger with McKenna was expected to help the firm bounce back from its financial struggles.

The merger might have saved Luce Forward, but will it be good for McKenna Long? There are some definite synergies. As Kurt Kicklighter — who has an awesome name, and even more awesome hair — told the Washington Post, Luce Forward’s strengths in securities and aerospace will fit well with McKenna Long’s renowned government contracts practice.

People at McKenna Long seem quite happy; as you can see from the firm’s profile in the Above the Law Career Center, 80 percent of surveyed lawyers would choose to work at the firm if they had to do it all over again. Let’s hope that such enthusiasm remains high as McKenna’s integration of Luce moves forward.

UPDATE (9/28/2012, 12 PM): We’ve heard reports, although not terribly detailed, of (1) layoffs affecting legacy McKenna associates as well and (2) at least one cold offer out of the McKenna summer program. If you have additional information, please email us.

Ex-Luce Forward lawyers sacked as McKenna downsizes [Daily Journal (sub. req.)]
McKenna Long completes merger with California firm Luce Forward [Capital Business / Washington Post]

Earlier: The 2012 Am Law 100: Revenue and Profits Continue To Climb

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