Biglaw, Bonuses, Layoffs, Money, Severance, Staff Layoffs, Technology

Nationwide Layoff Watch: More Reorganization, More Layoffs

Just because a firm is a great place to work doesn’t mean people get to work there forever. Our most recent law firm layoff story involved a firm that has been recognized by Fortune magazine and Crain’s New York Business as a top workplace.

Today’s Biglaw layoff story involves a firm that’s even more impressive. This firm has been recognized as a great place to work by Fortune, Crain’s, and Above the Law. In fact, it topped our list of the 12 top rated firms for 2013.

Which wonderful law firm is parting with some people, and why?

The firm in question is Cooley LLP. Late last month, the firm announced a reorganization of its information-technology department, which resulted in 15 IT and records staff members losing their positions. Interestingly enough, the move is not aimed at headcount reduction — and will result in some new hiring down the road. From the full memo by CEO Joe Conroy (reprinted in full on the next page):

It is important to clarify that this is not about eliminating headcount, but rather it is a reorganization and modernization of our IT function. We will be hiring for new positions best suited to match a revamped department with enhanced services and capabilities. As of now, we have a transition plan in place to support our attorneys and staff and manage ongoing IT projects, including the rollout of our new document management system.

This seems straightforward: another firm conducting staff layoffs in the wake of a reorganization and due to changing technology. Cooley itself confirmed the content of the Conroy memo but declined further comment.

One tipster told us a tidbit on timing:

The layoffs were done on January 23, the day before bonuses were to be handed out, so none of those who lost jobs received their bonus for 2013 work. Cooley has lost their soul.

Lost its soul? That seems a bit… harsh. We understand that severance was provided to the affected individuals, which could be viewed as a substitute for bonuses. And because bonuses at Cooley are discretionary and performance-based, it wouldn’t make a huge amount of sense to pay them to individuals scheduled to be dismissed. Discretionary bonuses are partly about retention, but if an employee isn’t being retained, much of the rationale for the bonus doesn’t apply.

Another aspect of the timing rubbed one of our sources the wrong way:

Did I mention that over 200 partners were having a retreat in Half Moon Bay this weekend? The timing was not lost on those who were pushed out the door.

Actually, we understand that the partner conference being referred to was long-planned and lasted just one day (Friday); it was not a weekend-long festivity.

Still, the Cooley situation does capture one of the challenges of managing layoffs: although some people’s careers at the firm are coming to an end, the firm itself lives on. And that will involve some things — bonuses paid out to remaining employees, retreats attended by partners, lunches and other events for summer associates (when the weather warms up) — that seem inconsistent with a reduction in headcount. If a firm can afford to pay bonuses or host partner retreats or have a summer program, why shouldn’t it keep all of its employees on the payroll?

Well, that’s not the way law firms work. They are businesses, and if they want to preserve as many opportunities for as many people as possible over the longest possible period of time, they need to remain in business — which involves running themselves like businesses. As David Boies told me back in 2012, when I interviewed him about the success of Boies Schiller & Flexner, a law firm is “not an eleemosynary institution.”

Layoffs might make business sense, but that doesn’t make them any easier for the affected individuals. Good luck to 15 former Cooley employees as they seek new opportunities. Given their expertise in information technology, they should fare better in their job searches than other Biglaw layoff victims who don’t have such valuable skill sets.

(Flip to the next page to read Joe Conroy’s full memo. Also, if you have information about associate bonuses at Cooley, feel free to email us or text us (646-820-8477). Thanks.)

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