Back at the beginning of the legal recession, when Heller and Thelen were collapsing, there was talk that a number of firms would either have to fold or engage in mega-mergers.

For the most part, that hasn’t happened. But today, Legal Week is reporting that Hogan & Hartson and London-based Lovells are at least talking about merging:

Lovells and Hogan & Hartson are in the early stages of merger talks, Legal Week can reveal, with the firms’ management teams currently assessing the case for a transformative union.

Lovells is to discuss the proposed tie-up with the top 25 US law firm at a meeting of its international executive on 28 October. A deal would create a top 10 global practice in revenue terms.

With firms of this size, one imagines that merger talks will be complicated. And there is a lot that will have to happen for these firms to go from talking to combining. But if all the pitfalls are avoided, how big of a firm could we be looking at?

Details after the jump.

Here we are. The end of the Vault 100.

To be on the Vault 100 is to be a well-known firm. Sure, maybe not well-known to law students or junior associates who can’t see past the mountain of doc review boxes in their windowless conference rooms. But known to partners … and clients. Look down your nose at these firms if you wish, but remember the old African proverb: “The smallest elephant can still crush your Lexus.”

Here is the final batch of top law firms for discussion:

91. Stroock & Stroock & Lavan
92. Blank Rome
93. Seyfarth Shaw
94. Kramer Levin Naftalis & Frankel
95. Manatt Phelps & Phillips
96. Squire Sanders & Dempsey
97. Sheppard Mullin Richter & Hampton
98. Patterson Belknap Webb & Tyler
99. Wiley Rein
100. Mintz Levin Cohn Ferris Glovsky and Popeo

What say you about these fine firms? Some final thoughts after the jump.

Ed. note: Welcome to the latest installment of “Notes from the Breadline,” a column by a laid-off lawyer in New York. Prior columns are collected here. You can reach Roxana St. Thomas by email (at roxanastthomas@gmail.com), follow her on Twitter, or find her on Facebook.

One evening after work, or at least the hours during which most people engage in employment-related activities, Lat and I sit in his office, contemplating an evening stroll. The office has the deserted feel that settles over most workplaces as the summer winds down, and I find myself waiting for a tumbleweed to blow by, rattling gently past the empty desks and rustling the leaves of the donut plant, which droop with late-season crullers. At some point, when we weren’t looking, August slipped away and turned to September, announcing its presence with cold evenings that jolted us from our summer reverie. Fall, I think, is like a cruel gym teacher, snapping our unguarded bums with a wet towel.

“How did this happen?” I wail plaintively, shivering. “I want a few more months of sunshine and warm weather.”

Lat strokes his chin thoughtfully. “Well,” he says absentmindedly, “I guess it has something to do with the tilting of the earth on its axis, relative to the sun. But I was an English major, so I’m just guessing.”

We spend a few minutes lamenting the advent of fall. No more seminude Hollister hotties, I remind Lat. No more flip-flops, he counters. Though the loss of these small luxuries is predictable, it is no less painful. We sigh glumly.

The end of summer is always wistful, like the day after Christmas or first love. One moment the world glitters with warmth and possibility, and even the air around you seems kinder. But when you look again, these pieces of ephemera — drooping stands of tinsel, the giddy thrill recorded in your diary — stare back, nothing more than frail relics of passing brightness. The most radiant instants slip away too fast, laying bare the impermanence of magic.

Usually, however, the sadness of summer’s end is offset by the renewed energy of fall. Fall is when things begin again: vacation ends, judges return from their summer travels, and cases resume. People have purpose! Having rested and loafed, they are ready to face the tasks at hand with renewed vigor, attired in new clothes. Perhaps this is why, this year, summer’s passing seems even crueler. This year, I have nothing to go back to.

In this weekend’s piece about the White & Case business model, the New York Times noted the law firm, cash-on-hand business model. Yesterday, Kash wrote:

Law firm dons partners generally get loans from banks at the beginning of the year to pay overhead — rent, associate salaries, etc. As the year goes on, they (hopefully) collect massive fees from clients, paying off the loans (and paying themselves out). Apparently, this is how your local ice cream truck driver — or maybe cupcake truck driver — operates his business as well.

Obviously, the model doesn’t work when banks aren’t willing to lend. But today Am Law reports that JPMorgan is poised to step up its law firm lending practice. The move could result in additional lines of credit open to law firms:

JPMorgan Chase is beefing up its profile in lending to the legal industry. The bank has hired the former head of Citigroup’s law firm group.

Lester Pataki, who led the legal industry specialty group in Citi’s private bank arm, is joining JPMorgan as the national practice leader and chairman of its law firm group, the bank announced Monday. JPMorgan says it hopes to capitalize on Pataki’s strategic skills to help it boost its presence in the area.

Isn’t JPMorgan one of the banks that is doing relatively okay? You can almost hear management committees all across the law firm landscape saying “Gimmie, gimmie, gimmie.”

More details after the jump.

Above The Law used to be a place for perk-watching. Bonus wars! Pay raise watches! Perk craziness! Extending the length of maternity and paternity leaves!

As the economy has taken its toll on the legal industry, our coverage here has taken some dark turns. The layoff watch. The salary freeze watch. The delayed start date watch. The shrinking summer associate programs.

The New York Times has been reading. This weekend, they ran a piece proclaiming the end of Biglaw as we know it, entitled A Study in Why Major Law Firms Are Shrinking:

As the apocalypse on Wall Street ripples out into the larger economy, a thick red tide is lapping at the once-impregnable foundations of New York’s corporate law firms, threatening to turn the industry — and with it, some iconic city characters — into an endangered species.

White & Case offered itself up to the sacrificial altar for the piece, with chairman Hugh Verrier telling the tale of the firm’s troubles. White & Case has laid off over 200 associates, with the bulk of them let go on March 9, a day we called “bloody, black March Monday,” as the layoff announcements came rolling in from so many firms on that day. But the firm stands virtually alone in this NYT piece and will now be known as THE firm representing the downfall of Biglaw.

Why was Verrier willing to lay White & Case on the altar? In talking about the layoffs of associates and partners at the firm, he told the NYT:

Mr. Verrier said he saw the storm approaching shortly after he took control in 2007, and considered three options, in consultation with a group of core partners: Do nothing, which risked the firm’s survival; couch layoffs as decisions based on poor performance; or own up to the crisis and bid large numbers of lawyers a harsh but needed goodbye.

His choice to confront the situation directly, while lauded by many on the staff, carried the risk of seeming weak, of becoming the poster child for the industry’s demise. But he saw it as opening a window for White & Case to eventually reposition itself.

Perhaps this is his hope with the NYT article as well. Insight into the demise of Biglaw using White & Case as the poster child, after the jump.

What goes up, must come down. Nearly two years ago, Above the Law broke the news of Kilpatrick Stockton raising starting salaries to $145K in Atlanta and North Carolina. At the time, the firm said:

As you know, starting salaries for new associates have recently increased, for the second time this year in some of our markets. Consistent with our philosophy of paying competitive salaries, we are announcing today increases in the starting salaries in some of our offices and markets, to be effective January 1, 2008.

Effective on that date, we will pay a starting salary of $145,000 in Atlanta and North Carolina and $160,000 in Washington, D.C., New York, and IP Patent.

But in an even more shocking sign of the times, that August 2007 memo also noted:

We are studying the market in the capital markets practice to determine if any adjustments are warranted with respect to the existing capital markets scale. We remain committed to paying competitive compensation to our lawyers who practice in that area, but are not currently making any changes to the existing capital markets scale.

But today is not 2007. What do you think the existing capital-markets attorney pay scale is today? A pat on the back and a fish sandwich?

Today, Kilpatrick announced that it was scaling back starting salaries to $130K in Atlanta and North Carolina.

But that is not the full extent of the cuts. More details and a statement from the firm after the jump.

Last month, Philly-based midsized firm Wolf Block joined Thacher, Thelen, Heller, & Morgan & Finnegan as victims of the Great Recession. The firm officially dissolved on March 23.

The press release at the time said:

WolfBlock will remain in the practice of law for several months to protect the interests of its clients, employees and creditors. The decision to unwind was reached in view of a confluence of unfavorable factors: the economic recession, especially in the firm’s core real estate practice; the constriction of credit occasioned by the ongoing banking crisis; and the intended and anticipated departure of significant partners and practices.

We now know where some of those partners and practice groups went. Duane Morris is picking up 50 of 290 WolfBlock attorneys, including the firm’s Trial Practice Group, Employment & Immigration Practice Group, and Business Reorganization and Financial Restructuring Practice Group.

It’s not a good time to be part of a Real Estate Group, but two Real Estate partners and one associate managed to make the jump.

From the Duane Morris press release:

“When this unique opportunity materialized to add such a prominent group of lawyers from a venerable institution, we acted immediately,” said John J. Soroko, Chairman and CEO of Duane Morris. “These lawyers bring an impressive level of experience, knowledge and business acumen that will integrate well with Duane Morris’ international platform. Our collective goal is to take their already significant practices to the next level.”

The lawyers will be joining Duane Morris’s offices in Philadelphia, Cherry Hill, N.J., and New York. See the full press release and the names of the saved, after the jump. As to the other 200+, WolfBlock attorneys, we’ve not seen any press releases as to their fates.

In November, Howrey picked up 40 lawyers from Thelen, including former Thelen chairman Stephen O’Neal. Today, tipsters report that non-equity partners at Howrey are being asked to make capital contributions to the firm:

At Howrey the non-equity partners have been told they must make a … 10% capital contribution to the firm. This is a suggested minimum, the partners are being encouraged to contribute more.

We mentioned yesterday that firms that picked up Thelen lawyers have had a couple of bumps.

A Howrey spokesperson clarified our tipster’s report. But non-equity partners will be required to make their contribution by June 1st. A Howrey spokesperson characterized the new program as follows:

However, beginning June 1, 2009, Non-Equity partners will be asked to contribute capital, at a percentage far less than equity partners. Additionally, all partners, Equity and Non-Equity, will now able to contribute voluntary capital and several have already agreed to do so. All these are signs of their commitment and dedication to the Firm and its plans for growth.

This is reminiscent of the DLA Piper situation. Back in November, DLA asked its non-equity partners to kick in a capital contribution, in exchange for turning the contributing non-equity partners into equity partners. But it does look like Howrey is maintaining the distinction between non-equity and equity partners.

While Howrey contemplates the structure of its partnership, the structure of its staff is being downsized. Additional details after the jump.

The list of firms cutting associate salaries keeps growing. Yesterday, the Connecticut-based firm Robinson & Cole reduced all associate and counsel salaries by $10,000. According to the Connecticut Law Tribune:

On Wednesday, Hartford-based Robinson & Cole, which has about 240 attorneys, confirmed that it has decided to cut associates’ and counsel’s annual salaries by $10,000. The pay cuts are effective immediately and affect incoming and current associates and counsel in all nine offices in the Northeast and Florida.

Discussions about salary cuts began last month, according to Anne Elvgren, chief marketing officer at Robinson & Cole.

First years at Robinson are getting dangerously close to losing the six figure dream:

Starting salaries vary by office, according to law firm officials, but entry-level attorneys earn $115,000 at Robinson & Cole, according to information the firm provided to NALP, the association for legal career professionals.

After the jump, we wonder how Robinson’s managing partner is enjoying his new gig.

Former Thelen associates might still be scrambling to pick up the pieces of their aborted legal careers, but former Thelen partners continue to land on their feet. The latest partner refugee is an All-Star. Richard Raysman (of what used to be known as Thelen Reid Brown Raysman & Steiner) has ended up at Holland & Knight.

Raysman left Thelen in August for Otterbourg Steindler. He got out before Thelen collapsed. Not surprisingly, Holland & Knight’s announcement downplays Raysman’s connection to his defunct former firm:

After graduating from Massachusetts Institute of Technology and receiving his J.D., from Brooklyn Law School while working at IBM as a systems engineer, Raysman founded the firm of Brown, Raysman, Millstein, Felder & Steiner which grew to 250 attorneys. The Brown Raysman firm was the first significant firm to focus on computer law. Raysman was among the first lawyers to recognize that the practice of law in the area of computers would be increasingly important as digital technology spread through commercial enterprises.

But ex-Thelen employees still remember My. Raysman. Remember, earlier this month former Thelen employees were granted class status to pursue claims against Thelen. Their lawyer has indicated a willingness to go after former partners of the firm.

But clients probably won’t care about Raysman’s connection with the unfortunate events surrounding Thelen. He’s a leading lawyer in an important field. We’re sure Holland & Knight will be thrilled by the extra rain.

Check out the full press release after the jump.

As mentioned previously, your above-signed writer is currently at the annual education conference of the National Association for Law Placement (NALP). Yesterday we attended some excellent events.

One of our favorite presentations, despite its deeply depressing nature, was “Understanding the Current Legal Economy.” Law firm management guru James Jones — Managing Director of Hildebrandt International, and former managing partner of Arnold & Porter — spoke to a packed ballroom about how the legal industry is, in short, completely screwed (at least for 2009, and probably beyond).

We took some notes on Jim Jones’s talk, which we’ve written up in this post. It is, we confess, what some might call a notebook dump. Alas, we don’t have the time for a more polished write-up.

Even if inelegantly written, we think you’ll find it interesting. Check it out, after the jump.

We have received a bunch of emails from soon-to-be Morrison & Foerster associates waiting for the firm to tell them something about their start dates, or deferral stipends, or even their bar stipends. People who plan to start with MoFo are particularly worried because their last communication with the firm suggested that there would be some further pushing back of the start date.

The problem seems to be located in California. One tipster explains it like this:

On January 28th, Mofo informed us that “the earliest initial starting date that we now anticipate would be November 2, 2009. We are committed to working to provide greater certainty regarding starting date alternatives as the year progresses and as we are in a better place to assess the opportunities for effectively incorporating new lawyers into the practice.”

We have not received ANY updates and cannot plan our lives.

The lack of paying out or even informing associates about the bar stipend is also very troubling. As another tipster explains:

MoFo never got us any funds to cover our bar expenses as they promised they would. They’re over 6 weeks late, bar apps and BarBri fees were due yesterday, and there’s been no word. We’re pretty desperate here.

After the jump, MoFo offers a brief statement.

Thelen dissolved, not that long ago. But some former employees claim that they did not get sufficient notice under the WARN act. Those employees are now allowed to pursue remedies as a certified class:

Lawyers and staff for the now-defunct firm Thelen have won class certification of their suit claiming the firm failed to give federally required 60 days notice that it would close its doors….

Thelen stipulated to class certification, a move praised by Steven A. Blum, who represents former Thelen employees.

Congratulations guys. Good luck getting blood out of a rock.

Of course, there are people affiliated with Thelen that still have money, and the lawyer representing former Thelen employees intends to go after those deep pockets, regardless of where they practice now:

Asked if sufficient funds exist for a recovery, Blum said, “From one source or another there should be a substantial recovery. From Thelen itself there are banks to contend with first and we may have to go to other sources in addition to Thelen to get maximum compensation.”

He said those other sources would include “other law firms that have taken large groups of Thelen partners and discarded the employees.”

Interesting. Nixon Peabody picked up 90 Thelen attorneys. Any chance that former Thelen partners now at Nixon will disgorge profits to this new class of former employees?

Ex-Thelen Lawyers Granted Class Certification [ABA Journal]
Judge approves class certification of suit filed by employees of shuttered Thelen [National Law Journal]

Earlier: Thelen Officially Dissolves
Nixon Peabody Picks Up 90 Thelen Attorneys (This is Different From a Merger How?)

[Ed. note: Above the Law is committed to bringing you the most comprehensive and up-to-date information about how the economic crisis is affecting the legal industry. Towards that end, we’ve teamed up with the people at Lawshucks. They’ve done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.

This post, written by Lawshucks and cross-posted here, is what we expect will be a new weekend feature on the week that was — at least until the economy turns around, and all the layoffs stop.]

This week seemed like it would start off relatively quietly after recent hysteria. The week ending February 20 was the first week in which major law firms laid off more than 1,000 people in a single week and, of course, the week prior to that we had “Black Thursday” or the “Valentine’s Day Massacre” (although I will always think of the Valentine’s Day Massacre as Drexel Burnham Lambert’s bankruptcy filing in 1990, which was also a slight misnomer, as it, too, actually occurred on February 13).

In fact, this week did start off relatively slowly, with just over 100 people laid off from firms such as Sheppard Mullin, Dechert, Linklaters, and Baker & McKenzie. Although rumors had been stirring for much of the week, it was only on Friday that official word broke of the massive cuts at Latham & Watkins.

Analysis and context after the jump.

Law firm partners need to watch more Gossip Girl. If they did, they’d learn the perils of talking about private matters in public places. In the age of BlackBerrys, texting, and cameraphones, it’s ridiculously easy for tipsters to leak details of overheard conversations and not-so-secret rendezvous to their favorite online gossip girl (or boy — XOXO, Lat).

Last year, we wrote about a Thelen partner who was overheard discussing her firm’s layoffs on the subway. Last night, we received this information, from a law student traveling from D.C. to New York:

This afternoon I boarded a train from Washington bound for Penn Station…. I, along with all of the other passengers, were sitting quietly when the man directly behind me decided to make a phone call using his bluetooth. He was talking so loudly that I think most people in the car were able to hear him.

His conversation, though he stressed how necessary it was to be kept secret (ah, the irony), detailed the current plans of Pillsbury to lay off somewhere in the range of 15-20 attorneys from four offices by the end of March, including a few senior associates with low billable hours and two or three first-year associates. I wouldn’t have believed it except for the fact that he identified himself to the call as Bob Robbins, who I learned is the leader of the firm’s Corporate & Securities practice section, and was talking to Rick Donaldson, who I learned was COO. What’s more, he was NAMING NAMES over the phone!

After we expressed skepticism over this wild story, including the tipster’s ability to catch the names of both Robbins and Donaldson, we received this response:

I agree it’s pretty wild. I wasn’t trying to overhear, but I had no choice because of the proximity. The name “Robbins” I remembered because he said it so damn loud. I went to their website, and the picture [at right] was an exact match. He was big enough to fit almost two chairs.

“Donaldson” I didn’t remember as clearly. I remembered that it began with a “Do” and thought it was “Dotson,” but there was no “Dotson” on the site — just “Donaldson.” Also, he called him “Rick” a few times.

Says our source, in explaining the decision to tip off ATL:

Before today, I have never even considered posting on this website, but I was so mortified by my experience…. I’ve heard of attorneys being reprimanded for discussing client matters in an elevator. Where does airing your own firm’s dirty laundry on an express train fit on the list? I don’t know if there is a way that you can independently verify this, but if so, please do.

Partial verification, after the jump.

In August, we reported on significant layoffs at Morgan & Finnegan. Two and a half weeks ago, we told you that Morgan & Finnegan would be dissolving with survivors going over to Locke Lord.

Thanks to the recent dissolution of Heller Ehrman, Thelen, and Thacher Proffitt, we have learned what to expect as a firm shuts its doors. Employees are supposed to have sixty days of paid warning, under the WARN Act.

But what is the use of a severance check if there is no money in the bank? Morgan & Finnegan employees are finding out. Last week, a tipster reported:

Morgan & Finnegan severance checks were sent to fired employees. They were drawn on an account that is frozen. The checks are not good. The signature is illegible.

At the time, we thought this was a minor clerical error. But yesterday, ATL received additional confirmation that Morgan & Finnegan employees are having trouble getting paid. Details after the jump.

Nixon Peabody announced layoffs of 56 employees today. Nixon Peabody adds its name to the growing list of firms that are eschewing stealth reductions in favor of open communication during an obviously difficult time. Managing partner and CEO, Richard F. Langan, Jr. furnished ATL with a statement minutes after the first reports surfaced of layoffs at Nixon Peabody:

While we enter 2009 with a solid platform to build upon, we are also faced with many business challenges that other law firms face-reductions in client demand for legal services which result in reduced work volumes for attorneys and paralegals, in the face of an increasing cost of doing business. Prudent management of our business requires that we downsize our associate, legal support, and administrative ranks, with the result that 20 attorneys will be leaving the firm, and we will be reducing our staff by 36 people through a combination of staff reductions and the creation of new positions.

One of our sources also reports:

A few unlucky first years who were in wrong group at the wrong time and never got the chance to prove themselves. It’s shocking that Nixon Peabody gets recognition as one of the better places to work…

Perhaps this kind of open communication from the firm is one reason Nixon is typically well regarded by the attorneys who work there?

We don’t know if any of the 56 employees let go from Nixon today were recent laterals from Thelen. Remember back in November, Nixon threw Thelen refugees a major life boat as Thelen was dissolving:

But now it is looking like Nixon is picking up 90 ex-Thelen lawyers (partners and associates), former Thelen support staff, and tripling its presence in Silicon Valley.

Good luck to all the former Nixon (and all the former Thelen) people looking for work. Please read the full statement from Mr. Langan after the jump.

[Ed Note: Do you have a question for next week? Send it in to advice@abovethelaw.com]

Dear ATL -

I’m a seventh year BigLaw associate. I’ve had excellent reviews and several of the partners here have hinted that I will make partner when I’m up for partnership next year. Last year I interviewed for an in house position, and I recently got word that the position is mine if I want it. The job is pretty sweet (good salary, hours, etc. ), but I would prefer to be a partner because I like my work and my colleagues and the pay is better. I wonder if it wouldn’t be a safer bet to take this in house position, because if I don’t make partner the firm will probably ask me to leave in due course. Any advice?

On the Chopping Block

Regardless of whatever those partners may have hinted at, you won’t know you’ve made partner until you’re actually being knighted in a candle light ceremony. Their assurances are bags of hot air in this economy, and frankly if they really liked it, then they shoulda put a ring on it.

Of course, an in-house job at a company is no guarantee of employment, as the company could easily fold or you could be laid off. But those same risks also apply to law firms, even if you do make partner. It boils down to whether it is more likely for you to make partner in a continuously solvent firm than it is for you to be terminated from your in-house job for any reason. This calculation can be expressed simply as: (P x R) + Ma > $ x Se, whereby P = number of partners who hinted at partnership, R = reliability of such partners, Ma = probability of the moon being in Aquarius, $ = richness of the in-house company, Se = similarities of the company to Enron. Any fool can do the math and see that job security at your in-house job is more likely, and therefore a better bet, than partnership. Even moving back in with your parents is more likely than partnership, and you don’t need a formula for determine that.

But if it’s always been your wildest dream to be a partner, then ignore the incontrovertible math and sally forth into battle. In the meantime, I’ll make sure to have the fort in your parents’ basement ready for your triumphant return home.

Your friend,

Marin

Elie gives terrible advice after the jump.

The number of attorneys looking for jobs continues to grow each month. And we can’t help running into them in New York, ground zero for attorney layoffs. We asked one Thacher refugee whether he had thought about banding together with other jobless legal eagles to start their own venture. “Too junior, not interested,” he replied.

Well, that’s not stopping two recent law grads from the University of Missouri-Kansas City. The Kansas City Star reports that Sarah Buckley and Alexandra Hutchings were unable to find work after passing the Missouri bar exam last year, so they’ve started their own firm: Buckley & Hutchings, LLC:

The question remains, though, whether they are an exception or — as more law school grads find a serious shortage of law firm jobs — the start of a trend.

Are these bright-eyed, bushy-tailed Missouri grads blazing a novel trail? More after the jump.

Last summer, we started an official Nationwide Start Date Watch as a few firms decided to trim costs by delaying the start dates for incoming associates. Why bring in new kids at $160,000 a pop when there’s no work to give them?

In 2008, Powell Goldstein, Thelen, Thacher, and Heller pushed their start dates back to January ‘09 (though it was not enough to save the latter three firms); Seyfarth Shaw, K&L Gates, Shearman, and DLA Piper pushed their start dates back from September to October; Pillsbury pushed back to October, with bonus incentives offered to those who were willing to start even later; and Sonnenschein and WolfBlock asked associates to start in November.

This summer, firms may not have to “delay” start dates. Based on reports from a few 3Ls, it looks like late fall may be the new norm for start dates.

Start dates are in late October for new associates at Clifford Chance and Milbank Tweed, and November for new associates at Morrison & Foerster. (Though with Wednesday’s layoff news, MoFo-bound law grads are just happy to have start dates.)

Later start dates are good news for those who want to take nice, long bar trips, and bad news for those who want to start building their bank accounts as soon as possible. We’re wondering how widespread this trend is. If you’re a 3L with an offer letter in hand, please take this poll about when you’ll be officially entering Biglawdom.

Earlier: Previous ATL coverage of Start Dates