It appears that Magic Circle firms have fallen in love with outsourcing. Most American associates will hope that like Mad Cow disease, the outsourcing craze stays on English side of the ocean. The Lawyer reports:

Allen & Overy (A&O) has become the first magic circle firm to outsource legal work as an increasing number of UK firms embrace legal process outsourcing (LPO) in a bid to reduce their overheads.

The firm has partnered with LPO provider Integreon to outsource basic litigation document review to teams in New York and Mumbai, in what could generate a 30-50 per cent cost saving.

Anybody think we’ll see some geographic hypocrisy in the comment thread? Outsourcing to New York = good, outsourcing to Mumbai = bad? Or will everybody simply agree that outsourcing = apocalyptic?

After the jump, The Lawyer has an excellent chart that shows us where British firms stand with regards to outsourcing.

Ed. note: Above the Law has teamed up with Law Shucks, which has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.

It was pretty hard to miss this week’s big news: unemployment crashed through the 10% barrier, hitting 10.2% in October - the highest level since 1983 (and, of course, worse than predicted). Underemployment also hit record levels, with the number of self-reported disenfranchised and under-utilized people reaching 17.5%.

Republicans jumped on the numbers as a sign that Obama’s package has failed, and the White House countered that it has saved almost 700,000 jobs. But that claim doesn’t even come close to addressing the original estimates and is completely unmeasurable. Still, the administration is reconsidering ideas it had previously rejected, like a highway bill and a business tax credit for new hires, even as they ask for two versions of a budget: one with flat spending and another with a 5% cut.

Law firms got their place in the MSM sun this week, as Bloomberg used a former law-firm employee as an example of increased migration to areas perceived as having jobs:

Some people are pulling up stakes and moving to where they think the job prospects may be brighter. Beth Rubin, 41, lost her position as a receptionist at the law firm Goldstein Bershad & Fried, PC in Southfield, Michigan, in October. The resident of Ferndale, a Detroit suburb, is now selling her furniture and moving to Georgia. “I’m looking to get a job in Georgia, and I don’t know about the job market there, but I can tell you Michigan is horrible,” Rubin said in a telephone interview.

Of course, anything has to be better than Detroit.

More on the highs and lows in the legal sector, after the jump.

We are fighting two wars, the economy is in the toilet, and the assassinations of Biggie and Tupac remain unsolved, but our elected leaders have spent a lot of time concerning themselves with soda (a.k.a: pop). Literally, the President of the United States is concerned about this.

Here in New York, wealthy overlord mayor Michael Bloomberg has an entire ad campaign running against soda. It’s probably just a precursor to the soda tax that is often talked about.

As a meat-eating smoker who detests physical activity and enjoys it when cows are fed beer, I’m immune to the so-called “doctors” and their calls for basic health. To me, taxing soft drinks is a violation of the social compact.

But in Biglaw, the war against soda is on. Foley & Lardner has already taken up arms against soft drinks. And it looks like Quinn Emanuel will be next.

Details after the jump.

There are firms that want to make more female partners (and minority partners for that matter), but honestly do not know how to make that happen. Retaining top female associates through a couple of years of around 3,000 billable hours is just difficult, especially if those women want to have a family.

Over on the WSJ Law Blog, Ashby Jones explores the female partner problem facing Clifford Chance:

The issue was the topic of an interesting article this week in the UK’s The Lawyer. The focus of the article was Clifford Chance, which has pledged to increase its percentage of female partners to 30 percent.

As the Lawyer reports, however, “the firm has a long way to go.” Currently, only 15 percent of its partnership is female.

The Lawyer article explains that there is no quick fix to the problem:

“There’s no one thing that will solve the problem,” says Childs. “There’s no quick fix. It’s a long-term goal that we’re very focused on. It’s something that all firms face and there are many ways you can approach it.”

Aggressively pursuing a dramatic increase in female partners is problematic, Childs argues. Firms need to find creative ways to change their cultures and encourage females to strive for partnership.

Give Clifford Chance some credit here. You aren’t going to fix this issue without confronting it head on.

While firms contemplate their cultural impediments to dramatic growth in female partnership , Patricia Gillette — who is a partner at Orrick — sees one simple change that could make eating the hours a little easier for all attorneys.

Like most days, I started my morning with a Red Bull and the best morning man in the business, Pat Kiernan. Everything was proceeding normally, until I received this tip in the ATL inbox:

Women lawyers at City firm Clifford Chance have been given a £90 lingerie allowance.

Now, as you can well imagine, I don’t normally “spring” into anything — much less action. But within nanoseconds of receiving this information, I fired off a flurry of emails.

It turns out that the story comes from the Guardian - U.K. Here are some additional details about this (lacy?) fringe benefit:

Women lawyers at top City firm Clifford Chance are bucking the trend for reduced expenses now that their £90 lingerie-and-blouse allowance, if they work later than 11pm, has been reinstated. Inevitably dubbed the “90 nicker knicker allowance”, this may or may not be the most reliable indicator yet that the credit crunch is over. (Business is apparently so hectic that the firm has also installed sleeping pods.)

If you “work” later than 11 o’clock, you get to buy new panties? Why didn’t I think of that? More importantly, why didn’t Ben Franklin think of that and put it in the Constitution?

After consulting colleagues in London, a spokesperson for Clifford Chance in New York got back to me about bringing this commitment to sensual excellence to America. Sadly, it turns out that what sounds like one of the greatest Biglaw perks ever is in fact just a pedestrian acknowledgment of basic hygiene.

You can still call yourself prestigious if you work at the firms that make up today’s fall recruiting open thread. But once you are outside of the Vault top 20, people start talking about “firm culture” at least as much as they talk about prestige.

Here’s the next batch:

21. Shearman & Sterling
22. O’Melveny & Myers
23. Quinn Emanuel
24. Ropes & Gray
25. Hogan & Hartson
26. Clifford Chance
27. Morrison & Foerster
28. Mayer Brown
29. Linklaters
30. Boies Schiller & Flexner

The slide continues for Shearman & Sterling. The firm was ranked #19 last year, and is down two spots this year. Is there any specific reason for the fall?

After the jump, let’s look at the firms rising up through the rankings.

It is not unusual for some top firms to decline to interview at Yale Law School. The school is so small, and quite frankly some firms know that they are not going to attract Yale talent.

That said, in this market some firms are unsure about what to do with fall recruiting. Is pulling out of Yale this year an indication of a firm’s larger decision to scale back its 2010 summer program? A tipster has done some legwork for Above the Law readers:

Yalies got a fall interview program pep-talk/preparation video yesterday. According to the CDO, the firms participating plan to have “robust summer programs” but “smaller” than in the past. Nothing too surprising….

Interesting to you guys will be the top firms who are NOT participating in the fall interview program at Yale. I went through Vault up to 50. If firms with New York offices won’t send people on an hour-and-a-half train ride to New Haven, even just for show, they must really be hurting.

Check after the jump for the list of Vault 50 law firms that won’t be doing OCI at Yale.

[Ed. note: Above the Law has teamed up with Law Shucks. Law Shucks has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.]

We’re not doing This Week in Layoffs this week, as it was a triple witching day - end of week, end of month and end of quarter (not to mention holiday weekend). Instead, we’ve put together an extensive mid-year review of law-firm layoffs so far.

All told, 125 major law firms have announced or had confirmed layoffs. The combined total is 10,723 people, 4,015 of which are attorneys and the balance, 6,708, are staff.

After the jump, we go into excruciating detail, complete with charts.

* Earlier this week, Leah Ward Sears stepped down as Chief Justice of the Georgia Supreme Court. She penned this piece for CNN about her brother’s suicide, the problems with no-fault divorce, and where she’s going next. [CNN]

* Former Latham & Watkins partner Samuel Fishman sentenced to 15 months in prison for bilking the firm and clients out of several hundred thousands of dollars. [Dow Jones Newswires]

* J.D. Salinger wins his copyright suit. Judge rules that ‘J.D. California’s’ spin on Catcher in the Rye is not transformative enough, and cannot be sold in the U.S. [Associated Press]

* Skadden Arps takes the top-billing throne. [ABA Journal]

* SEC lawyer Genevievette Walker-Lightfoot tried to warn superiors about Bernie Madoff back in 2004. [Washington Post]

* Time for a new edition of the Kama Sutra. Indian court makes gay sex legal. [New York Times]

[Ed. note: Above the Law has teamed up with Law Shucks. Law Shucks has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.]

Forgive us for sounding like a broken record. There are only so many ways to say the same thing about US unemployment: the rate of new filings has slowed down, but overall unemployment continues to rise. Unfortunately, it looks like last week’s brief drop was just a blip in an otherwise unbroken trend of worsening data.

That pretty much mirrors the trend at law firms - fewer layoffs but still no hiring (with one exception).

More detail, after the jump.

[Ed. note: Above the Law has teamed up with Law Shucks. Law Shucks has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.]

Let’s all move to Nebraska! In a week in which unemployment was up in 48 out of 50 states (plus DC), Nebraska’s unemployment dropped by 0.1%, keeping it tied with North Dakota for the lowest in the nation at 4.4% (tie goes to the state with the Championship Subdivision (formerly D-I) football program).

At the other end of the spectrum, the state with the finest football program in the nation has the highest unemployment rate: Michigan at 14.1% (Go Blue!).

Closer to home, New York’s unemployment has hit 9%, the highest rate in more than a decade due to continuing deep cuts in the financial-services industry that spins off so much legal work.

After the jump, we detail the effects that has had on law firms this week.

We reported last month that the head of U.S. litigation for Clifford Chance, Mark Kirsch, was leaving the firm’s New York office — and that layoffs in the litigation practice group were imminent. We didn’t know at the time where Kirsch was heading or how many of the 29 litigation associates in the Magic Circle firm’s New York office would be let go. Now we have more information.

Clifford Chance litigation partners Mark Kirsch and Mark Joel Cohen, and senior counsel Christopher Joralemon, have wound up at Gibson Dunn (which seems to be weathering the downturn better than many firms). Clifford Chance tells us the trio will be taking 7 of the firm’s 29 NY litigation associates with them. Kirsch is joining GDC as co-chair of litigation, as noted in Gibson’s press release.

Of the remaining 22 litigation associates, no more than 10 will be laid off this week, leaving a small litigation team in Clifford Chance’s New York office. As we mentioned before, the firm’s U.S. litigation will now be headed by Juan Morillo, who is in the D.C. office. In the words of one tipster:

It’s tragic what the Brits have done to Rogers & Wells.

So what’s the future for litigators in Clifford Chance’s New York office? A tipster weighs in, after the jump.

Today we sat down with Gururaj Potnis, director of Manthan Legal, who was in New York to attend a legal conference. Manthan is an Indian company that describes itself as a “leader of offshore Legal Process Outsourcing.” According to Potnis, Manthan has roughly 280 lawyers — 140 senior attorneys, and 140 more junior colleagues who do paralegal-type work — and they stand ready to help law firms cut costs (and increase profits).

Potnis thinks a “tectonic shift” is taking place in the legal industry, and he believes his company is well-positioned to take advantage of the new market. According to him, he’s got law firm clients on his side: “For the first time, the large law firms are being asked by their customers: ‘Are you efficient?’” The market change that we are now seeing “is 99% being driven by customers.”

Manthan Legal is positioned differently from its Indian competitors in legal outsourcing. It works primarily for law firms rather than in-house counsel:

Right now, 90% of the [outsourcing] industry is being driven by corporate counsel [i.e., in-house lawyers]. At some point in time, they’ve been exposed to the concept of having to get the maximum amount of work from the minimum budget….

[I]n the short term, the corporate counsel will drive [the outsourcing trend]. But in the long term, the law firms will have to develop an alternate billing model.

And under these alternative billing models, outsourcing may have an important role to play.

What can outsourcing firms offer? Junior associates might not like it, but managing partners will have to start paying attention. More after the jump.

Robert here. Having arrived back in the US last night, I’m sitting up at 3 am now reflecting on the results of another outstanding visit to Hong Kong. Several of us were in town and able to meet with dozens of people while there, some of whom are candidates and some of whom are representatives of law firms and some private equity and hedge funds for whom we have conducted attorney searches in the past. Evan’s spent an extra couple of days working on some additional projects we have in place and will be leaving tomorrow.

In a nutshell, and while this is not without some caveats, we believe that things are picking up strongly at this point in China. By the end of the year, while total number of international attorneys hired in Asia will not be as high as 2007 or even 2008, we expect to have had our best year in Asia yet on a revenue basis by a long shot. Just in the last few weeks we have confirmed eight attorneys placed in Greater China and we anticipate being able to confirm another five placements (touch wood) in the next several weeks. Now, here are some of the caveats:

1. Private equity funds, on the whole, are still seeing reduced deal flow. They report law firm interest in negotiated deals, including busted deal reductions, is significantly higher than in the past. Much of the deal work is restructuring related as they try to mop up the balance sheets of some struggling portfolio companies.

2. Some firms report that, while M&A work has been looking up overall, it’s been hurt recently by the relative surge in stock prices, which has made deals more expensive in many cases and caused some firms to temporarily shelve their plans.

3. The market is changing so that local qualification is becoming a plus factor for any candidate looking to work in Hong Kong.

For today I just want to touch on the third note above regarding local qualification in more detail. It’s important that our readers understand what the local qualification question means. The Hong Kong Law Society regulates lawyers in the territory and does not permit a firm to practice Hong Kong law unless it has over 50% Hong Kong qualified attorneys. Otherwise the firm must be a “Registered Foreign Law Firm.” Lawyers from other jurisdictions can be licensed as “Registered Foreign Lawyers”, in which case they are called foreign lawyers by the Law Society, or they can be licensed as Hong Kong solicitors, in which case they are referred to as “Overseas Lawyers” by the Law Society.

***More after the jump.

[Ed. note: Above the Law has teamed up with Law Shucks. Law Shucks has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.]

Alright, this is getting ridiculous. Last week, no real layoffs until Ropes & Gray got busted doing stealth layoffs at 11:00 on Friday morning. This column closes Friday afternoon, usually. We actually submitted yet another version celebrating the first week of the year without layoffs. Then Weil Gotshal went and laid off 79 staff. We’ll have to save the celebration for next week (hopefully - although we’re planning to be on the golf course, not writing).

So back to the usual roundup.

As in the general US market, the rate of law-firm layoffs (or first-time benefit applications) continues to drop, even though unemployment numbers continue to rise. So most of the cutting may be behind us, even if the growth and hiring haven’t kicked in yet. Still, this recession is far and away the worst of the past 40 years, from a jobs perspective. Check out Clusterstock for interesting chart that shows employment levels are continuing to decline 15 months after the current recession began, a point by which the 1980 recession had completely reversed its losses, 1974-76 was almost back to pre-recession levels, and the others had at least flattened out if not started trending upwards. Elie will continue to monitor Latvian hookers for signs of life. In the economy.

After the jump, there were a few other near-layoffs this week and the usual non-layoff cost-cutting measures.

Last night, Magic Circle firm Clifford Chance announced that Mark Kirsch, the firm’s U.S. litigation leader, is leaving the firm’s New York office. It’s unclear where he will be going next or if this is part of the trimming of the partnership ranks that Clifford Chance warned about back in February.

Given his departure, a source within the firm tells us that Clifford Chance is looking hard at the 29 associate positions in New York’s litigation group. There will be layoffs, though the total number is not yet clear. The firm plans to move quickly so those associates being let go will know who they are soon.

This is the second round of bad news for associates in the New York office within a matter of months. In March, the firm laid off 24 of its New York associates.

The firm made the announcement of impending layoffs and sent around a memo last night. The memo emphasizes that litigation in D.C. is still very strong. The new U.S. litigation practice leader has already been chosen: Juan Morillo, who is based in the nation’s capital. Read the full memo, after the jump.

Incoming associates at Kirkland & Ellis got good news today. They get to start in 2009! November, to be exact. We’ve added the firm to our start date round-up, after the jump.

New associates heading to Sidley Austin, on the other hand, got “optional deferral” news. The firm e-mailed incoming associates yesterday announcing the “Pro Bono Assistance Program:” a January 2011 start date with a $75,000 stipend attached. Says one tipster:

very unclear to what extent each office is effected, what happens if you DONT choose the option, etc. etc.

It looks like at least 17 New York associates will be taking the year off to do good works. From the e-mail that went out yesterday:

The economic downturn has led to a slowdown in workflow for most law firms. As a result, many law firms, including Sidley, are seeking challenging professional alternatives for a number of the lawyers in the class of 2009 - alternatives that will provide a worthwhile experience for our new lawyers and much needed service to the community at large. For this reason, the Firm and the Sidley Austin Foundation are establishing a new Pro Bono Assistance Program (the “Program”). We anticipate establishing between 17 to 20 of these positions under this program in New York. Our other offices will be participating in the Program as well. The Program will enable incoming Sidley attorneys to spend approximately one year working full time for a public interest organization while deferring arrival at the Firm. Participants will be paid a salary of $75,000 per year and will receive benefits from the organization by whom they are employed.

It is anticipated that participants will work on a full-time basis commencing sometime in November of 2009 (subject to adjustment by the employing organizations) and would be welcome to rejoin the Firm effective January 3, 2011, if they choose to do so.

That “if they choose to do so” is a little ominous.

We’re not sure how many associates will be deferred in other offices, as Sidley has not yet responded to our inquiries. If you know more, e-mail us.

Check out the full memo from Sidley, and our updated start date and deferral table, after the jump.

[Ed. note: Above the Law has teamed up with Law Shucks. Law Shucks has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.]

Happy International Workers’ Day, comrades! In light of the scarcity of jobs, we expect few lawyers will be taking to the streets to protest poor working conditions this year.

Once again, mixed news on the broader employment front. Initial jobless claims unexpectedly dropped by 14,000, but continuing claims hit a record high for the 13th consecutive week. That mirrors what we’re seeing at the major law firms: layoffs are slowing down, but new work isn’t being created to vill the massive void.

By the way, Google is rolling out some cool new tools that allow you to view various statistics. Here’s a chart of the New York unemployment rates. Check out TechCrunch for more on the feature.

After the jump, we break down layoffs by region, plus a recap of other cost-management activities.

Many law school graduates are preparing for an endless summer. Endless in that they won’t be starting work until well into the winter. At this point, the majority of firms are starting 2009 graduates in January 2010. There are some outliers though — some firms are starting new associates as early as September 2009, and some are offering them start dates as late as January 2011.

Here are a few of the latest additions to the deferred start dates list from the past week:

[Ed. note: Above the Law has teamed up with Law Shucks. Law Shucks has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.]

First time jobless claims ticked back up again last week, up 27,000 to 640,000, continuing the 12-week run of record number of people staying on unemployment. There was a net increase of 93,000 in the overall number of people collecting benefits, at a total of 6.14 million. From the “ray of hope” department, the rolling four-week average, which is less volatile, dropped slightly to 646,750 from 651,000 first-time applicants.

“There is nothing suggesting at this point that payroll declines are going to abate,” said Tom Porcelli, a senior economist at Castlestone Management Ltd. in New York. “We could bounce along the bottom here for a while.”

That may be true in the broader markets, but in BigLaw there is one factor looming on the horizon that could stanch the bleeding. What is it? After the jump.