Biglaw, Layoffs, Musical Chairs, Partner Issues, Staff Layoffs, Tax Law

A Mysterious Partner Departure — Plus Stealth Layoffs? — at Cleary Gottlieb

A Cleary tipster told us:

For about a year now, Cleary has been laying off staff. I estimate about 30-40 so far. They are doing it one or two people at a time. They have reduced staff through attrition for several years, but now they are just letting people go. They are reassigning, changing schedules, and otherwise driving staff nuts.

I understand that law firms don’t exist to provide a “jobs program,” as you recently wrote. On the other hand, it isn’t right that people are getting written up after years of employment and then being fired “for cause.”

I agree completely with this source. It’s understandable that firms want to reduce the number of secretaries and other staffers they have, in this increasingly automated age. The classy way to achieve that goal is through “voluntary separation” or buyout programs, conducted openly, and open to all personnel who satisfy certain objective criteria.

The not-so-classy way to do that is through stealth layoffs, i.e., firing perfectly capable employees on “performance” grounds. Stealth layoffs have at least two drawbacks compared to voluntary programs: (1) layoffs will affect some employees who are least able to sustain unemployment (unlike voluntary programs, where employees self-select), and (2) layoffs make it harder for affected employees to find new employment, since they were terminated “for cause.”

Which departments are being affected by the Cleary cuts? Here’s what we’ve heard:

[T]he departments getting hammered are billing, finance and IT. I’ve spoken to people there and they are literally exhausted. Secretaries have been told their attorney ratio is now 7:1. We haven’t had Staff Appreciation Day in the New York office for two years now and they even stopped the weekly delivery of flowers for the 11 reception desks two weeks ago.

And where does the responsibility lie? A source offered these opinions:

This started about a couple of years ago, when Sheldon Alster became the Managing Partner for the New York office. He is a miserable person and he brought in one Kelly Stevens as Administrator. They have really been busting chops. They even took five sick days away from staff this year from the ten [previously given].

In Cleary’s defense, I have to say it has been a good firm in the past…. Now they’re acting like the firm is in a death spiral. I don’t understand this with PPP of $2.6 million.

Actually, it’s closer to $2.7 million, but who’s counting?

We reached out to Cleary for comment on the staff layoff claims. The firm responded by saying that it does not comment on staff departures.

So what does this all mean? The times, they are a-changin’. The firms that used to be known as kinder, gentler Biglaw firms, like Cleary and Debevoise, are increasingly focused on the bottom line. Debevoise ditched its trusts and estates practice, essentially because T&E wasn’t paying its own freight. And now Cleary is clearing out unneeded support staff, for basically the same reasons.

Cleary may be boring. But boring and well-fed is preferable to the exciting life of the unemployed.

Earlier: The 2013 Am Law 100: A Year of ‘Slow Growth’
Nationwide Layoff Watch: Voluntary Separations at Two Major Law Firms

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