The Above the Law inbox has been on fire all morning as disgruntled (former) Schulte Roth & Zabel associates share some bad news:

Yet more lay-offs: Two groups — 13 associates so far — real estate and business transactions.

Other tipsters have used the same ominous language: “13 associates, so far.” Are there more people that are going to get the bad news from Schulte today? The firm did not respond to our request for comment, so we suppose other Schulte associates will just have to wait and see.

But let’s not get ahead of ourselves. Before we worry about how many more pink slips might be handed out today, let’s take a moment to look at the 13 we know of that have already been let go.

Ed. note: Welcome to ATL’s first foray into serial fiction. “My Job Is Murder,” a mystery set in a D.C. appellate boutique, will appear one chapter at a time, M-W-F, over the next few weeks. Prior installments appear here; please read them first.

Susanna Dokupil can be reached by email at sdokupil@sbcglobal.net or on Facebook.

Back at the office, Tyler reached for his case file. A yellow Post-It note on top read “Drinks at 5 p.m. Solstice. K.”

Tyler instantly e-mailed Katarina one word: Yes.

Then he noticed an e-mail from the managing partner announcing cuts in the recruiting budget. No reimbursements for associate lunches with summers. The firm has, however, negotiated a deal with Solstice such that all recruiting meals eaten there and paid for by corporate credit card are still fully reimbursable up to $7.00 per person. Tyler groaned audibly. Having to eat well-presented-yet-unflavored food every day was his personal hell.

An e-mail from Katarina appeared! His heart pounded as he read her reply: “?” He read it again and mentally administered severe self-flagellation for a divination attempt gone badly awry! Tyler wished vainly for a time reversal spell to recall that e-mail. Seeing none, he instead replied, “What is the answer to which the question is ‘dinner tonight?’” He crossed his fingers.

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.

This week, economists missed on the good side — initial jobless claims fell by more than expected. The 502,000 applicants are the fewest since January 3, and the four-month rolling average is at the lowest level since November 2008.

It’s tough to grasp half a million people filing for first-time benefits as good news, but these are troubled times, so we have to cheer where we can. Don’t get too excited, though. Even news that looks good at first glance probably isn’t. The 139,000 people who came off the continuing-claims roster more likely did so as a result of benefits running out or giving up the search than actually finding work.

But don’t be surprised if that number starts creeping back up. A bill was passed last week that will extend benefits by 14 weeks in all states, and six additional weeks in states where the unemployment rate is greater than 8.5%.

All in all, it was a relatively good week in BigLaw, with no layoffs reported. Nonetheless, firms continue to flail about trying to fix their economic models, and we document the efforts after the jump.

Welcome back to “The Pile Up” caption contest. We presented ATL readers with this photo and asked for possible captions:

With over 500 entries, we felt as if we were living the horror of the photo. But we waded through the submissions and whittled them down to our top ten. Check out our favorites and vote for the best one after the jump.

We receive a lot of interesting emails here at Above the Law. Once law firms started deferring their deferred incoming associates for a second time, we started getting emails like the one below. Since I don’t really know how to respond to the people who have been asking this type of question, I figured I’d throw it out to you guys for your expert advice:

Can you do a story about the size of deferral stipends? Particularly, breaking down the math of expenses showing that some firm’s stipends are too small. For instance, [Redacted] is paying deferred first years only $3300 per month before taxes. After taxes this only comes out to like $2600 per month. Most law students went to expensive schools with $150,000 debt (not to mention undergrad debt), and have $1,000 per month loan payments starting this month even if you select the maximum 30 year repayment plan. Under the 10 year payment plan, loan payments are $1500 per month. When you consider that rent in New York, DC, Chicago, LA, and San Francisco is at least $1,200 (being very very conservative), that leaves no money to pay for things like food or utilities. They expect us to basically spend more than we make for 3, 6, 9, 12+ months? This is practically a layoff. I don’t have the finances or rich parents to go 6+ months with no money. Firms like [Redacted] need to pay at least the market $5,000 per month so that the deferred first years have enough to live on. Especially when our original offer letter promised us “market compensation.”

Is there anything useful we can tell this person (and the other incoming associates in the same position)? Let’s try after the jump.

You know how much we love rankings around these parts. But apparently there is a list of law firm rankings out there that actually matters. The National Law Journal reports:

An Association of Corporate Counsel law firm rating system unveiled last month has triggered a lot of interest from the association’s in-house lawyer members, who have submitted 1,500 firm reviews. Lawyers at firms are less enthused. …

Since the ACC initiated its “value index” last month, its members have shared their opinions about the performances of 500 law firms. The ACC has used the mainly anonymous input to rank firms on a five-point scale.

Unfortunately, there is one humongous catch:

The evaluations and ratings are viewable only by ACC members.

Why, Association of Corporate Counsel? Why? Why produce a new juicy list of clients actually rating the quality of legal services they receive, and then keep it private? We all want to know what you think.

Sorry. “All” is probably a little bit strong. Law firm managers don’t seem to like this list very much. Details after the jump.

With most associates just trying to avoid joining the growing ranks of unemployed attorneys, partnership prospects might seem like part of a distant and unfathomable future.  But in what might be a surprise to associates who have been laid off or suffered salary cuts, many law firms are making a healthy number of new partners. The National Law Journal reports that the overall number of partners nationwide in 2009 is actually higher than in 2008. 

Visit the Career Center, powered by Lateral Link, for more on which firm has a five-year non-equity partner track, which firm does not require capital contributions from new partners, and which firm went from promoting 34 attorneys to partner in 2008 to promoting 0 in 2009. 

If you are a mid-level associate in Los Angeles and you really want the inside scoop on how to grab that brass ring, come to the Career Center Professional Development panel on November 17, hosted by Lateral Link and Proskauer Rose, for a discussion on long-term career planning, partnership prospects and in-house careers. Panelists include Morgan Chu of Irell & Manella, Mike Woronoff of Proskauer, and Vivian Yang, GC at Citysearch. Attendees will receive 1.25 CLE credit hours.  Click here to learn more or to register.

We have another episode in the saga of Deidre Dare, one of our favorite laid-off lawyers. She was an attorney in Allen & Overy’s Russia office until she penned typed a salacious online novel about her expat adventures, which featured lots of drinking, sex, drugs, donkeys, and dwarves. After the firm let her go, she sued.

Dare’s still in Moscow, where she writes an often controversial column for the Moscow News called sExpat. The latest reveals that Deidre likes it rough:

Anyone who has spent even five minutes in bed with me knows that I have a strong proclivity for S&M. My experience in the area ranges from the mild (spanking) to the extreme (ball gags, golden showers and the like), according to how much experience my partner has and what he or she likes.

The column goes on to praise Russia’s abusive men. Dare writes: “If you’re hanging out with real men and you’re a little slutty, you’re going to get hit. Period.” Roll On Friday photoshops A&O’s chairman into being a “real man” here.

Ed. note: We at Above The Law do not condone physical violence against women. We do, however, condone violence against the commenter ShaFeef.

In a previous column, Dare said money was tight and suggested that prostitution might be a way out of her money woes. That might have led to more hitting than even Deidre likes. Luckily, she’s come up with a different way to make money. She’s written another book. Its title, fittingly, is SLUT.

On Sunday, the Boston Globe released its list of the Top 100 Place to Work in Massachusetts. Goodwin Procter placed #74. That’s interesting because last Thursday Goodwin laid off 55 people.

Nice timing on the Globe report. In a companion article titled “They look past the paycheck” the Globe highlights Goodwin:

Under the traditional apprenticeship system at law firms, new lawyers learn from partners who handpick associates they want for particular cases. …

A new approach matches the associate’s professional development goals with a partner’s needs, leaving associates less at the whim of partners and partners more assured of a good fit. Goodwin Procter has a site online where associates enter their availability and their interests, but it takes more than a grand schedule to make the program work. Staffing managers who are lawyers themselves make the match.

Wrong day for that story. Wrong day.

Goodwin wasn’t the only law firm on the list. Other firms after the jump.

* The National Law Journal has their annual headcount at the top 250 law firms. Law firms saw their biggest decline in the three decades that NLJ has been keeping track, with headcount falling by nearly 5%. [National Law Journal]

* The links of the Galleon insider trading ring. Ropes & Gray had some uncomfortable calls to make to clients Hilton, Avaya Inc., 3Com Corp. and Axcan Pharma Inc., thanks to Arthur Cutillo. [Bloomberg]

* Law firms may want to come up with a “dos and don’ts” list for clients with regard to insider trading. [New York Times]

* Scott Rothstein rose fast and will fall faster. More details on his wild life and wilder philanthropy. [St. Petersburg Times]

* Actor James Woods is suing a Rhode Island hospital over the death of his 49-year-old brother. [Fox News via AfterTheBeef]

* New Google Books settlement tonight. [Washington Post]

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.

Damian Bonazzoli is a senior staff attorney for the Massachusetts Appeals Court. According to the ABA Journal, he likely makes a five-figure salary. Apparently that wasn’t enough money for him. His entrepreneurial side business got him caught up in a journalist’s term-paper-trafficking sting operation.

Colman Herman wrote a piece for Commonwealth magazine exploring the “shadowy underworld” of college papers for purchase. The journalist went cruising on Craigslist for people advertising thesis-generating services. He e-mailed 66 people. Among the 62 respondents was Bonazzoli:

Damian Bonazzolli (sic), who promised a “quality grade” if he was hired to write the 20-page paper, responded to an initial inquiry by sending, unsolicited, his résumé. It indicated he is a senior staff attorney for the Massachusetts Appeals Court, a job that pays him $94,000 a year, according to state records. He wanted $300 to write the paper on physician-assisted suicide.

In an email exchange, Bonazzolli (sic) [FN1] said turning in a paper that he had written would not be illegal. “I am aware of no state or federal statute that prohibits such a practice. This is not the equivalent of, say, lying on a federal employment or tax form,” he said. “Could your school take disciplinary action? Of course. But that’s quite different from a criminal prosecution.”

We hope no law students have hired Bonazzoli to do legal analysis for them. His is not up to par when it comes to Massachusetts law.

It’s been a tough day at Goodwin Procter. Multiple tipsters report that the firm is laying off both attorneys and staff today. One source reported on the human toll of losing your job:

[L]awyers were just laid off this morning at Goodwin Procter in Boston. There are both men and women crying in the halls.

It’s not clear what triggered the tears, since Goodwin handled the dismissals professionally, appropriately, and in a manner similar to other top firms. Are Goodwin guys just more sensitive?

Goodwin has laid off 21 attorneys and 34 staff. Here is the critical part from the firm-wide memo Goodwin Procter just sent out to its associates:

In anticipation of a slow economic recovery, we took a number of actions during the year to manage our staffing model, secretarial ratios and discretionary expenses. The end result was that while we were largely successful in realigning resources to meet client needs and market demand, there remains some overcapacity within the firm.

After careful deliberation, we have made the difficult decision to reduce our associate ranks by 21 people and our professional staff ranks by 34 people.

Most of the attorneys who were cut were second-year associates in the firm’s Business Law Department, out of its Boston office.

Read the full memo, after the jump.

Incrementally, the pace of layoffs has been picking up. Perhaps firms are trying to get through all of their cuts before the holiday season?

The latest news comes from Day Pitney. A tipster reports:

Day Pitney in CT laid off 30 staff today and moved staff to lower positions.

A spokesperson from Day Pitney confirmed that the firm laid of 29 staff (not 30). The move was part of a staff reorganization and affected staffers in eight of the firm’s nine offices.

No attorneys were laid off.

Let’s check Day Pitney’s layoff history after the jump.

Give Dickstein Shapiro credit. When the firm lays people off, it doesn’t hide behind any performance review rhetoric. When Dickstein laid people off back in January, firm chairman Michael Nannes had this to say:

These are purely economic decisions — this is a group of talented attorneys who have made valued contributions to our Firm.

Dickstein is going back to the layoff well today. Once again, Nannes has some frank language:

It is with heartfelt regret that I announce today that we are readjusting the size of our workforce to better align the firm with the current economic climate and emerging legal services model.

Well then. Business model layoffs.

Numbers and the full memo after the jump.

The signals seem mixed in terms of whether the legal profession is on the road to recovery. On the one hand, the pace of layoffs is certainly slowing. On the other hand, firms are taking other steps to keep headcount (and expenses) down. They are not yet in a mode where they need more hands on deck to handle all the work.

One of the popular approaches is deferral extension, i.e., pushing start dates for incoming associates back yet again. A number of firms have gone down this path. To view our prior coverage, click here and scroll down.

The latest firm to take this approach: Winston & Strawn. The firm’s incoming associates were previously scheduled to arrive on January 19, 2010. Now, according to a memo issued yesterday by hiring partner Joseph Torres, class of 2009 associates will be starting on one of three dates: February 1, 2010; June 1, 2010; or October 4, 2010.

Deferral extension details, including the full memo, plus other information about Winston — after the jump.

What role do lawyers have in advising their clients on business matters? Some might say: None.

“The client decides on the business objective, and the lawyer helps the client reach that objective, as long as it’s legal,” this line of thinking goes. “And why would you want lawyers giving business advice anyway? They have no business training — and judging from how large law firms have fared in the Great Recession, they don’t seem to be particularly good at business either.”

On the other hand, one thing we commonly hear from the in-house lawyers we speak with is that they do give a combination of legal and business advice (not surprising, given that they have one client, which they want to see prosper). And some top law firm lawyers also get involved in the business side of things; they’re dealmakers in their own right, not just the folks who “paper up” the deals dreamed up by investment bankers. E.g, H. Rodgin Cohen of Sullivan & Cromwell, who played a major role in various bank M&A deals last fall.

Fried Frank partner Jonathan Mechanic (pictured) — chair of that firm’s high-powered real estate group, with a top ranking from Chambers and Partners — is arguably the real estate world’s answer to Rodge Cohen. In the New York Observer, Dana Rubinstein began an August 2008 interview with Mechanic by citing a study declaring him to be “the best-connected and most powerful real estate lawyer in the world.”

But at least one ATL reader holds the opinion — a minority opinion, it should be noted — that Jon Mechanic’s track record isn’t so stellar.

The bill of particulars against Jon Mechanic and Fried Frank, after the jump.

Year-end bonuses have been announced at the market-leading firm of Cravath, Swaine & Moore. And they are even lower than last year’s Cravath bonuses.

But look, this is 2009. Welcome to the Great Recession. Your true bonus is: you get to keep your job. That shouldn’t be taken for granted, even at Cravath.

Anyway, here’s the Cravath bonus scale for 2009 (via the WSJ Law Blog):

Class of 2008 — $7,500
Class of 2007 — $10,000
Class of 2006 — $15,000
Class of 2005 — $20,000
Class of 2004 — $25,000
Class of 2003 — $30,000
Class of 2002 — $30,000

Cravath’s bonus announcement is always important because the market tends to follow Cravath — as it did last year. Skadden’s 2008 bonuses, at roughly twice Cravath’s levels, were ignored.

Could this year be different? Are the Cravath bonus levels low enough such that a firm of similar or even lower prestige will try to better CSM? Or will other Biglaw shops simply avail themselves of the political cover provided by Cravath — which is arguably what happened last year, when Skadden’s generous bonuses went unmatched (excluding Wachtell)?

So, readers, what do you think? Read the FULL MEMO, take a READER POLL, and COMMENT — after the jump.

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.

Last week we wrote that jobless claims were higher than expected and that predicting anything with any degree of confidence seemed pointless. This week, the number of people receiving unemployment benefits was lower than expected, the lowest levels in seven months, and that was before announcement that benefits will be extended again. Still, the best that can be said is that the cuts are slowing:

Companies are cutting fewer jobs as they see more evidence of a recovery, helped by government stimulus efforts and less weakness in housing and manufacturing. While a separate report today showed the economy expanded for the first time in more than a year, a rebound in hiring may take longer to materialize

So while things bounced around unpredictably in the broader market, we had two notable announcements in law-firm innovations this week. We’ll cut right to them after the jump.

Back in May, Drinker Biddle came up with a radically different program for first years. For the first six months, first years at Drinker are more like apprentices than traditional first years. They get intensive training, but are only paid $105,000.

Despite those changes, the firm has still decided to lay off attorneys. Multiple tipsters report that 22 Drinker Biddle associates were laid off yesterday.

Drinker Biddle spokespeople did not comment about the news. But tipsters report that the significant cut to first year salary did not end up saving the jobs of more senior associates.

Details on departments and offices and an update after the jump.