It might not look like it, but there is a lot of carnage on this list. Orrick is down four spots. Proskauer is down four spots. King & Spalding is down 3 spots.
And many of the firms here that are marginally up or holding steady still went through significant layoffs.
After the jump, Law Shucks offers some stats.
Baker & McKenzie, which held the #2 spot in terms of revenue for 2008, has taken a dip in 2009. The firm’s fiscal year ended on June 30, and AmLaw Daily reports that global revenue fell by 3% for the firm.
As noted in Morning Docket, profits per partner took a bigger hit, plummeting 17%, thanks to the recession:
Baker & McKenzie reported Friday that global revenue declined 3 percent to $2.11 billion and profits per partner fell a more significant 17 percent to $992,000 in fiscal year 2009, bringing an end to a four-year period over which the firm experienced consecutive double-digit revenue growth and an 85 percent increase in profits.
While Chicago-based Baker & McKenzie, which generated 66 percent of its fees outside the United States, highlighted the role currency exchange rates played in the falling benchmarks for fiscal year 2009, management admitted the economic downturn negatively impacted the firm’s financial performance.
As we’ve previously reported, Baker has been a leader in terms of outsourcing legal work. The new profit numbers should mean that the trend continues. More details after the jump.
Based on a Washington Post article profiling the Five O’Clock Club, an outplacement and career coaching company, we constructed a Biglaw blind item:
Which New York law firm, having already completed two rounds of layoffs, has hired the Five O’Clock Club to help it carry out additional layoffs (in August, October, and November)?
After we ran the item, several firms came forward to declare they’re not the firm in question. And now they’re joined by one more: Morgan, Lewis & Bockius.
A spokesperson for Morgan Lewis contacted ATL to say that it isn’t the firm with layoffs in the works. In fact, Morgan Lewis claims that it shouldn’t even be on the shortlist of contenders.
Read why — and check out the list of the Five O’Clock Club’s clients, including some very prestigious law firms that haven’t publicly admitted to layoffs — after the jump.
So far, salary cuts have been localized to mid-sized and regional firms. But it appears Baker & McKenzie has become the first national firm to slash associate salaries. A tipster reports that associate salaries have been cut between 10% and 25% for some associates at the firm.
As we understand it, associates are receiving individualized memos about their salary reductions. Salary cut decisions are being made on a case-by-case basis and it is difficult for associates to know what is going on with colleagues down the hall.
Baker McKenzie has been making all sorts of news lately. Two weeks ago, the firm laid off 124 people. Then the firm pushed back start dates until January 2010. But it is surprising to see the firm get out in front on cutting salaries while its peer firms are resisting salary cuts.
Is this another nail in the lockstep coffin? Additional details after the jump.
More firms are pushing back the start dates of incoming first year associates. This weekend, we learned that Winston & Strawn has pushed back start dates to January 19th, 2010. Deferred associates will receive an additional $15,000 on top of their $10,000 bar stipend. The firm is also picking up health care for its incoming associates, starting in September.
We learned today that Baker & McKenzie has also pushed back start dates to January 2010. As we understand it, the firm is not offering any additional stipend other than what they normally pay out for bar expenses.
WilmerHale also announced a start date push back. According to a firm-wide memo:
As is our normal practice, we will have more than one start date. A portion of the class will start on January 20 and the remainder will start on March 17. To determine the group that will start on each date, Legal Personnel and Recruiting will work with department and practice group leaders to balance the stated interests of the incoming associates with the various needs of departments, practice groups and offices.
Those starting in January 2010 will receive a $10,000 deferral stipend on top of a $5,000 bar stipend, while the March 2010 first years will receive a $15,000 bar stipend.
But WilmerHale is also encouraging associates to take a full year off:
We also informed our incoming associates that they may defer their start dates until the fall of 2010 for a stipend in the amount of $75,000. This deferral is entirely at the option of the individual incoming associate and is not tied to his or her ability to obtain a pro bono or other public service position.
The WilmerHale deferral stipend is right at the top of the Latham-led market for these optional year-long programs. But its stipend for people being forced to start in January or March is a little on the low end.
Baker, Winston, and WilmerHale are announcing their programs late in the game. We’ll have to see if the delay puts incoming associates heading to the these firms at a disadvantage in terms of post-bar exam options.
After the jump, we check in on Sonnenschein’s late breaking, long-term deferral.
The holidays are over. Now it’s time to get back to business, and in Biglaw these days that means getting back laying people off.
Multiple tipsters report that there were layoffs at Baker & McKenzie this morning. The firm just confirmed the news:
Therefore, consistent with our strategy and discipline, and in response to the economic conditions we are currently witnessing, we are taking proactive steps to ensure that we remain financially strong. In particular, we are proactively focusing on helping our clients manage through these turbulent times, and we are acting to reduce our own operating costs. These actions include, but are not limited to, slowing or deferring some long-term projects, travel and hiring restrictions, and some limited workforce reductions, including six associates in our New York office this week.
The laid off associates were given a 3 month severance package.
One tipster reports:
No one was safe from first years to senior associates to support staff which were terminated. … Those who are left are worried about more cuts.
Another tipster, who also claims that some first years were let go, adds this:
The reasons given were that not enough work was available.
Read Baker & McKenzie’s full statement after the jump.
The terrorist attacks in Mumbai reminded everyone that we live in a dangerous world. But as India takes the steps necessary to improve its homeland security, we shouldn’t expect the tragedy to stem the tide of outsourcing American legal functions to Indian companies.
The National Law Journal reports that firms are increasingly proud of their outsourcing initiatives:
As outsourcing becomes more commonplace and corporate counsel and law firms are under increasing pressure to reduce costs for clients, law firms such as Baker & McKenzie; Greenberg Traurig; Milbank, Tweed, Hadley & McCloy; and Shapiro Sher Guinot & Sandler are actually touting at conferences the benefits of outsourcing.
Baker & McKenzie was the last best hope for Heller Ehrman, Greenberg Traurig is conducting stealth layoffs, and Millbank just announced Half-Skadden bonuses. But their outsourcing operations are thriving.
And the wave of firms outsourcing legal services to India is only going to get bigger:
Forrester Research projects that legal outsourcing to India will reach $4 billion by 2015. Some experts, however, find that number too low and others too high. Regardless, other numbers don’t lie — there are an estimated 800,000 lawyers in India and nowhere near that many jobs. Attorneys there charge, on average, $35 an hour, or no more than half of what an upper paralegal or lower-level associate bills, and up to three times less than an upper-level associate’s time.
After the jump, will global terrorism have a chilling effect?
If any Heller Ehrman attorneys were hoping that a major firm would sweep in and hire a whole bunch of Hellerites, the Dissolution Committee is warning you not to hold your breath. The Recorder reports:
On Tuesday, Peter Benvenutti, the chairman of the dissolution committee now controlling the firm, confirmed whispers that Baker & McKenzie and Winston & Strawn, both one-time merger candidates, had withdrawn proposals to pick up large groups of lawyers and their expensive real estate. While Benvenutti would not say whether deals on this scale are being discussed with any other firms, he did say there’s interest in taking over certain of the firm’s leases, and “we expect to have clarity in a day or two.”
At this point, why would Baker or Winston Strawn take on expensive lawyers when they can just sit back and cherry pick the superstars they want? We haven’t heard any story of a Heller rainmaker saying “If I come, these 30 people are coming with me.”
We’re back with another installment in our series of open threads on the Vault 100. This is an opportunity for insiders to sound off on their firms for the benefit of wannabe potential first-year and lateral associates.
Here are the next ten on the Vault list, with prestige scores in parentheses:
The most interesting set of “notable perks” in this bunch can be found at Boies Schiller. On the upside, there is an annual trip to Jamaica for attorneys and their families — in December, no less — but on the downside, it’s a “sweatshop run by a genius.” This makes us think of David Boies as the legal profession’s Santa Claus — who likes to take the elves to Montego Bay.
We invite the curious to ask questions about these firms, and for those in-the-know to take pity. Earlier:Vault 100 Open Threads – 2009
In the immortal words of Roxette, “It must have been love; but it’s over now.” Last month, we marveled at all the law firm merger rumors making the rounds. These days, however, merger talks are falling apart, left and right.
As we first reported, the contemplated merger between Heller Ehrman and Baker & McKenzie is officially dead. For the skinny on their breakup, see Legal Pad. Apparently client conflicts were the deal breaker (as they so often are; they’re the law-firm equivalent of serious religious differences, or really bad STDs). Baker & McKenzie will have to settle for being a firm with a measly $2.2 billion in annual global revenue.
And now this, from the National Law Journal:
In the days that followed the joint announcement by Wolf Block and Akerman Senterfitt that their merger talks hit a snag over a conflict, sources have pointed to deeper issues affecting the drawn-out discussions…
One source aware of the merger discussions said the combination would be a good thing for both firms but said Wolf Block leadership is unwilling to work out certain tax and pension concerns.
There is concern among some of Wolf Block’s partnership over having to pay a significant amount in taxes upon merging with a corporation, the source said. There is also concern over having to make up for Wolf Block’s unfunded pension liabilities. Both of the issues could cause partners to “take a real financial hit,” the source said, adding that a loan could solve those problems, but firm leadership seems unwilling to go that route.
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We currently have a number of active openings for associate roles at US and UK firms in HK / China, Singapore and two new in-house openings. As always, please feel free to reach out to us at asia@kinneyrecruiting.com in order to get details of current openings in Asia, as well as to discuss the Asia markets in general and what we expect for openings later this year. Our Evan Jowers and Robert Kinney will be in Beijing the week of March 25 and Evan Jowers will be in Hong Kong the week of April 1, if you would like to meet them in person.
The US associate openings we have in law firms are in the usual areas of M&A, cap markets, FCPA / white collar litigation, finance, and project finance. The most urgent of our top tier (top 15 US or magic circle) law firm openings in Asia (among many other firm openings that we have in Asia) are as follows:
• 2nd to 5th year mandarin fluent M&A associates needed in Beijing and Hong Kong at several firms;
• Korean fluent 2nd to 4th year cap markets associate needed in Hong Kong;
• 2nd to 5th year Japanese fluent M&A associates needed in Tokyo;
• 4th to 6th year mandarin fluent cap markets associate needed in Hong Kong;
• 2nd to 4th year M&A / cap markets mix associate needed in Singapore.
The last time I flapped my wings your way, I tried to make at least enough noise about your mobile phone to make you more than a little bit uncomfortable. I hope I did. If enough of us become anxious enough about the known and unknown unknowns and knowns in our mobile phones, then we can start making wise decisions about how to manage that information and its resultant investigations.
Today, I’d like to put a finer point on the last installment’s topic by asking a question that seemed to catch most attendees off-guard at a conference panel that I moderated last week: is there discoverable personal information in a mobile app? Our panelists’ answer was a uniform “yes” with one stating that, if he had to choose only one type of data that he could discover from a mobile phone, he’d choose app data. Why? Because there’s simply so much of it and because almost all of it is objective – not just user-created like an email – but machine-tracked like GPS, usage duration, log in and log out times, browsed web addresses, browsed actual addresses. Also, most of us seem to have the idea that data doesn’t actually “stick” to our mobile devices the way it “sticks” to our hard drives. Maybe there’s a disconnect based on the fact that our phones are mobile so we assume the data is mobile to?
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As we finish off the Vault top 50, we look at some firms went through some tough layoffs.
