Dechert Layoffs -- They Laid Off First-Years (And This May Be The Way Of The Future)

Being a first-year isn't layoff armor anymore.

pink slip LF layoffsWhen we reported yesterday that Dechert had laid off several associates after a round of performance reviews (sources peg the number at 11 or 12), we warned that even a modest layoff — as opposed to letting people go in a slow trickle — suggests a boldness and lack of concern for public criticism that could spell trouble across the industry. Now we can add the willingness to fire first-years to the worrisome trends coming out of Dechert’s latest layoffs.

Firing first-years… that’s a firewall firms tend not to breach.

We always look askance at the phrase “performance” in the context of layoffs. It’s often a convenient cover that firms use to deflect layoff news. “It’s not a layoff, these are performance firings,” a firm might say. And sometimes they are. Firing 10-15 people over performance is totally plausible. Firing 40 and claiming it’s all about billing is… not. Dechert, by all accounts, fell into the former camp.

That said, “performance” means a lot of things. There are lawyers who turn in laughably atrocious work product. Those are bad performers. Then there are people who are billing, say, less than 2000 hours a year. Are they bad performers? Maybe. Or they might be victims of a bad business cycle. Or a bad business model. When low billing is automatically lumped into “performance,” every performance firing should be viewed with a healthy dosage of sodium.

Dechert tipsters are writing in to suggest that at least some of Dechert’s “performance” firings were more about hours than competence. That’s a matter of opinion. But if first-years were really hit by these layoffs, that’s a good sign this is about hours. Because how can you fire a first-year for being incompetent? You wouldn’t have any first-years left!

Here are a few of the emails and texts we’ve received:

* Dechert is laying people off in NYC, LA, and Philadelphia, including first years.

* One of the associates who was laid off told me that the firm laid off first years (it sounded like “performance-related” in the sense that their billable hours were low, because there was no work for them to do).

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Firms rarely if ever target first-years for dismissal. It’s not just that they can’t fairly assess an associate’s competence at that level, but it’s also hard to blame a first-year for low numbers. They’re at the mercy of the system until they get some experience under their belt and build working relationships around the firm. In fact, depending on how firms assign work to young associates, this can be doubly troubling because — for a variety of reasons — women and minorities can find themselves unfairly left in the cold when partners hand out work to the people they “get along with” based on first impressions. Time can (hopefully) sort out these unconscious slights, but that doesn’t help first-years.

Unfortunately, this may be another emerging trend. Consider the work that Biglaw historically dumped on first-years and how that work now gets shipped to any number of discovery vendors or in-house staff attorneys or high-end technological products (or “solutions,” as the developers might prefer we call them) — none of which cost $180K/year. How are first years going to fill their days when the grunt work is off the table?

If firms are still hiring associates based on the needs of a bygone era, then they either need to suck up low hours or have an honest discussion about the firm’s real needs going forward. But we just might see more firms showing first-years the door until they come to grips with this. One Dechert tipster warns that the firm may be courting trouble again:

So, sure, those decisions were based on performance and potential, but this was absolutely a layoff due to lack of work, not due to underperformance. There are a few more axes set to fall later this summer on the corporate side. Not sure if litigation is in the same boat.

Don’t let the headcount fool you. Those increases are due in large part to the firm hiring way too many first years. We have another huge crop of fall associates this year who will have nothing to do.

We can report that Dechert is trying to ease the transition of these associates:

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It will be a challenge to find another Biglaw position (and the salary that comes with that) as the word is out that the “under billers” are on the market. What Dechert has done (for most) is given them a generous number of paid weeks to find another job and the use of all firm resources.

Hopefully, the rest of Biglaw views the idea of first-year “under billers” as skeptically as we do here.

Earlier: Dechert Lets Multiple Associates Go After Performance Reviews


HeadshotJoe Patrice is an editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news.

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