The rumor making the rounds of lawyer and staff layoffs at Thelen Reid Brown Raysman & Steiner is true. We just spoke to Thelen’s co-chair, Stephen V. O’Neal, who provided confirmation and details.
The firm is in the process of laying off 26 associates and 85 staff members, on a firm-wide basis, “in response to recessionary pressures.” (Unlike President Bush, Mr. O’Neal was not afraid to use the “r” word.) Thelen has approximately 600 lawyers, per its website, so the cuts amount to roughly 4 percent of total headcount.
With respect to the location of the affected lawyers, the cuts affected all major offices. With respect to seniority — one source told us that some first- and second-year associates were fired — Mr. O’Neal said that “some were fairly junior, and some more senior.”
In terms of practice areas, Mr. O’Neal said the layoffs were spread out among groups, but with “some areas more impacted than others,” including certain parts of capital markets and cap-markets-related real estate work. He noted that other practice areas are “thriving and increasing in scope,” including renewable energy, cross-border M&A, China practice, litigation, and workouts / bankruptcy.
With respect to staff layoffs, Mr. O’Neal explained that they are due in part to the economic climate, but in part due to post-merger staff redundancies. The merger of Thelen Reid and Brown Raysman took place in late 2006, making the consolidated firm a little over a year old. But the firm did not do much cutting of staff in 2007.
Last year “was not a year when we tried to make deep cutbacks in anything, even though we had combined two good-sized firms,” explained Mr. O’Neal. “It was a year of building, coordinating, and consolidating. We wanted to understand how best to organize this new entity.” Now that the firm has a better understanding of its staffing needs, and is in the process of consolidating multiple offices in the same cities (e.g., New York), it is reducing staff redundancies.
As for associate severance packages, Mr. O’Neal stated that firm provided a “market-level” package. We floated three to four months as our understanding of market, and he said that the firm is “in that ballpark.”
“We are anticipating a profitable 2008,” said Mr. O’Neal. “We are being prudent businesspeople, and when you are dealing with recessionary pressures, you adjust your business so you will have — and maintain — a strong level of profitability, notwithstanding those pressures.”
We thank the firm for the information and candor with respect to the layoffs (i.e., not casting these departures as “performance-based”). If you have more information, feel free to email us.
Updates: A few additional nuggets:
1. As noted in the comments, total headcount includes partners and counsel, so the percentage of associates laid off is higher than 4 percent. Some of you suggest it’s around 10 percent.
2. We’re a little annoyed at Legal Pad for the lack of an ATL shout-out — in both the blogosphere and the MSM, it’s proper form to credit and/or link to the source that breaks a story first (even if you were working on the same story too) — but we’ll link to them anyway.
They have more on the Thelen layoffs here. Much of the info in their post appeared previously in ours, but they do add that the firm “is also trimming its summer program from eleven to eight weeks and is pushing the start date for first-years from September to January.”
3. A source at the firm tells us that the severance packages were in the two- to three-month range.
Earlier: Prior ATL coverage of layoffs (scroll down)