Clifford Chance

Magic Circle Meltdown: Layoffs at Allen & Overy, Linklaters, and Clifford Chance

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london.gifThe London-based “Magic Circle” firms may have had a strong presence on the 2008 global law firm rankings, but a few of them are off to a rough start in 2009. Earlier this month, we reported, “having already laid off 20 New York litigators, Clifford Chance today let go of 70 – 80 London lawyers.”

The layoff disease has spread to two other Magic Circle firms. Layoffs were announced in the New York office of Allen & Overy yesterday. Our sources says:

Allen & Overy just fired two paralegals and three attorneys in the NY office. These firings are said to be “performance based.” Word on the street is that there will be more, but they will come in bits and pieces to avoid bad press. Rumors have already started about other attorneys being let go in offices abroad.

[UPDATE (Jan. 26, 10:34 a.m.]: In response to our inquiry about layoffs, A&O spokesperson Jaime Bruck says, “This is nothing more than the normal management of our business. We don’t comment on the reasons for individual departures. The total # of attorneys in NY is 171.”]

And Linklaters plans layoffs soon. The Old World firm is going “New World” by axing 70 partners and 10 percent of its associates, reports The Lawyer:

Linklaters’ top management is to drastically overhaul the firm’s structure, slashing up to 70 partners and 10 per cent of associates in a bid to become a smaller, more profitable operation.

The programme, understood to be called Linklaters New World, will also see redundancies among support staff. The firm’s offices in Western Europe are thought to be most vulnerable to cuts.

Those layoffs could start as soon as February.

With the Guardian reporting that “Britain has officially entered recession for the first time since 1991,” the layoff news from London seems inevitable. But some of the firms in the circle– Freshfields and Slaughter & May– are still feeling magical. Good news from those firms, after the jump.

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Legal Eagle Wedding Watch 1.11: Dream Dean

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champagne glasses small.jpg

Twenty-seven-year-old hottie marries much older non-hottie: Normally a match like this would be explained by the groom’s (1) job at Goldman, (2) trust fund, or (3) peerage. But no, this groom is (drumroll) the associate dean for finance and administration at Yeshiva’s Cardozo School of Law. This is how bad the economy is, folks: Attractive women are marrying associate deans of non-T14 law schools.

Here are this week’s finalists:

1. Adrienne Lockie and Adav Noti

2. Inna Dexter and Benjamin Nussdorf

3. Arlene Hong and Darren Duffy

For our analysis of these couples, click on the link below.

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International Layoff Watch: Clifford Chance Knocks off 80 London Attorneys

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Clifford Chance LLP Abovethelaw Above the Law blog.jpgWe mentioned this massive layoff from across the pond in today’s Morning Docket, but it seems like we need to devote a full post discussing the shocking news.

Having already laid off 20 New York litigators, Clifford Chance today let go of 70 – 80 London lawyers. The Lawyer reports:

In a statement, London managing partner Jeremy Sandelson said: “We have not taken this decision lightly. However, like any other business, we have to respond to prevailing market conditions.

Our clients and their legal services needs have undergone significant change over the past year. We need to reflect that in the London office, and that includes ensuring that our level of staffing is appropriate for today’s economic realities.

By taking action now, we believe we will be well placed once conditions begin to improve.

Today’s information puts yesterday’s news about Clifford Chance asking for more capital from their partnership into a larger context. Yesterday, we said:

Associates: next time you complain about greedy partners slashing your pay, consider the possibility that they’re suffering too in this economy. They’re trying to safely navigate the recessionary shoals, just like the rest of us. Some of the measures they’ve been taking, like pay freezes and reduced bonuses, may just be prudent planning. Better to have a smaller paycheck than no paycheck at all.

Good luck to our U.K. friends suddenly receiving no paycheck at all.

Clifford Chance to make 80 London lawyers redundant [The Lawyer]

Earlier: Clifford Chance to Partners: Brother, Can You Spare… £100,000?

Nationwide Layoff Watch: Clifford Chance (Redux) Twenty Litigators Laid Off, in NY and DC

Clifford Chance to Partners: Brother, Can You Spare… £100,000?

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Clifford Chance LLP Abovethelaw Above the Law blog.jpgClifford Chance leadership to the rank-and-file partnership: “Partners, spread the wallets, so we can smell the juicy insides.”

Associates, we feel your pain: slashed bonuses and salary freezes are bad news. But things could be worse: imagine having to pay your firm for the privilege of working there:

[A]s a Christmas “bonus” this year, partners at Clifford Chance were each required to make a capital contribution of £100,000 (roughly $150,000). Ouch.

Through a spokesperson, Clifford Chance declined to comment. But, if true, the news would not be completely shocking. The firm has done at least two rounds of layoffs, and they paid bonuses that were down sharply from prior years (although, in fairness to CC, at market levels for 2008).

If true, Clifford wouldn’t be the only firm looking to its partners for financing. As previously discussed, because of super-tight credit markets and the high cost of borrowing, more firms are financing their operations by tapping partner wallets. See, e.g., DLA Piper (letting some income partners become equity partners, if they can cough up capital contributions of up to $150,000).

Associates: next time you complain about greedy partners slashing your pay, consider the possibility that they’re suffering too in this economy. They’re trying to safely navigate the recessionary shoals, just like the rest of us. Some of the measures they’ve been taking, like pay freezes and reduced bonuses, may just be prudent planning. Better to have a smaller paycheck than no paycheck at all.

Are you aware of other firms that are hitting up their partners for cash in these dire times? Drop us a line, by email (subject line: “[Firm Name]: Capital Contribution”). Thanks.

Earlier: Biglaw: Welcome to the Credit Crunch

Prior ATL coverage of Clifford Chance

Associate Bonus Watch:
Clifford Chance Already Laid People Off, Half-Skadden Bonuses Were Sure to Follow

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law firm associate bonus watch 2008 biglaw bonuses.jpgLegal Week is reporting that Clifford Chance has done the predictable thing and slashed associate bonuses to half of what they were in 2006:

The US arm of the magic circle firm will award bonuses ranging from a pro-rated $17,500 (£12,000) for first-year associates to $32,500 (£22,000) for eighth-year associates – a significant decrease on last year, when the firm awarded bonuses ranging from $35,000 (£24,000) to $65,000 (£44,500).

In October, we reported on Clifford Chance’s layoffs of 20 litigation associates. But at the time we noted that the financial health of the firm had been strong in 2007:

Interestingly enough, Clifford Chance recently snagged the #1 spot on the American Lawyer’s list of top-grossing global law firms (ranked by 2007 revenue). Will its proactive response to economic turmoil help CC keep the top spot for 2008? Or are the cuts a sign of deeper troubles at the firm?

Because Half-Skadden low balled the market on associate bonuses, we can’t tell if today’s announcement is indicative of “deeper troubles,” or if Clifford Chance is just being a prudent bonus follower? Certainly, Clifford Chance wasn’t going to leave bonuses at Skadden levels so soon after firing attorneys. That would have just seemed irresponsible.

So far, the Cravath bonuses have set the floor. We’ll see if any firm wants to take it to the basement.

CC announces bonus cutbacks for US associates [Legal Week]

Earlier: Nationwide Layoff Watch: Clifford Chance (Redux)

Prior ATL coverage of associate bonuses.

Morning Docket 12.05.08

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* Bad news for the big three: the New York Times says Congress “is suffering from acute bailout fatigue.” [NYT]

* There were 13 law firm mergers in the third quarter this year (not unusual). The largest number of combinations (5) were in the southeast. [The Birmingham News]

* O.J. Simpson is finally going to jail. He will be sentenced today in Nevada. This time, he stole back sports memorabilia from two people. Can you think of a more inelegant end to the Simpson saga? [The Associated Press]

* If you break the law in New York, at least you get free day care. Thanks to Judge Judith S. Kaye (New York State’s cheif judge), there are 34 children’s centers across the state in family, criminal, and civil courts. They provide a safe and happy place for children whose parents are involved in legal battles. [NYT]

* The shareholder lawsuit against the merger of Bear Stearns and JPMorgan Chase was dismissed Thursday in the New York State Supreme Court. [Reuters]

* Singapore awarded Clifford Chance, White & Case, and Latham & Watkins licenses to practice law, as part of an attempt to compete with Hong Kong and other cities in China and the Middle East that have benefitted from having international law practices. [Bloomberg]

* Discover is mad at Morgan Stanley for secretly hanging-out with Visa and Mastercard behind Discover’s back. Sounds a lot like middle school, only in the real world, you can sue. [Bloomberg]

Crisis for some firms, opportunity for others

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good news bad news.jpgIt’s been a dark week on ATL. Layoff news has been pouring in: 21 attorneys cut at Katten, up to 60 at Sonnenschein, and 20 at Clifford Chance.

To prevent you from jumping out your windows, we’re revisiting a Wall Street Journal article from earlier this month on the silver lining for law firms during the economic crisis.

Firms with relatively strong balance sheets are hiring lawyers from competitors that are hurting from the dropoff in mergers, debt offerings and other staples of the legal business. Leaders of these firms figure that being bigger and more geographically diverse will help them weather downturns in particular market sectors and capitalize on complex business opportunities that require a variety of specialties. In most cases, they’re even giving the new hires raises.

Did you hear that, despondent ones? Raises!

Many firms have been feasting on the remains of Heller Ehrman (R.I.P.). Heller partners and attorneys have been snatched up by Hogan & Hartson; Orrick; Sheppard Mullin; Arnold & Porter; Covington & Burling; Jones Day; and Cooley Godward Kronish. Other firms have been poaching partners from struggling Thelen.

Some firms are buying on the cheap, while others are giving new attention to more resilient practice groups:

K&L Gates LLP has acquired medium-size firms in Texas and North Carolina this year and hired 45 partners from other firms. “We have no debt — no long-term debt, no short-term debt — and therefore have a balance sheet that allows us to grow aggressively into a downturn,” says Peter Kalis, chairman of the 1,700-lawyer firm…

But many law firms believe that they have no choice but to expand specialties, such as restructuring, intellectual property, securities litigation and antitrust, that are generally believed to remain steady — or even pick up — during down cycles. Cadwalader, Wickersham & Taft LLP in New York laid off 131 lawyers — nearly 20% of its staff — earlier this year because of the implosion in the mortgage-backed securities market, a key practice area for the firm. But it has hired lawyers in other practice areas, including financial restructuring.

Chins up.

Some Law Firms Hire in Slump [Wall Street Journal]

As Heller is sliced and diced, many associates are out in the cold [National Law Journal]

Earlier: ATL Layoff Coverage

Nationwide Layoff Watch: Clifford Chance (Redux)
Twenty Litigators Laid Off, in NY and DC

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Clifford Chance LLP Abovethelaw Above the Law blog.jpgAbout a year ago, Clifford Chance was one of the first firms to conduct layoffs (at least openly, to their credit). In November 2007, the firm laid off six associates in structured finance, one of the first practice areas to get hit by the credit crisis.

Today Clifford Chance is announcing additional cuts. Individual and group meetings have been and are being held, in both the New York and Washington offices. Litigation is one of the affected departments.

Interestingly enough, Clifford Chance recently snagged the #1 spot on the American Lawyer’s list of top-grossing global law firms (ranked by 2007 revenue). Will its proactive response to economic turmoil help CC keep the top spot for 2008? Or are the cuts a sign of deeper troubles at the firm?

We have calls and emails into the firm requesting details about the layoffs. We will update this post as soon as we hear more.

Update (2:30 PM): One tipster tells us that the layoffs have affected “at least 20 associates.” This source adds that the layoffs have affected the classes of 2005, 2006, and 2007.

Update (2:45 PM): We’ve received a statement from the firm. It reads, in part:

Clifford Chance today told 20 associates in the firm’s U.S. Litigation & Dispute Resolution practice they would be laid off as sluggishness in litigation matters continues despite market volatility that historically has produced countercyclical balance. There will also be a reduction in Business Services staff that follows in the fourth quarter.

Those attorneys in New York and Washington, D.C. affected by today’s decision are held in high regard by the firm. These layoffs were not performance-driven, and those affected will receive severance packages and outplacement services.

You can read the complete statement after the jump.

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Twenty Litigators Laid Off, in NY and DC“

Fall Recruiting Open Thread: Vault 21-30 (2009)

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comparing.jpgIn connection with on-campus interviewing season, we’re giving you a chance to assess the firms that made this year’s Vault 100 list of most prestigious law firms. The previous open threads listed firms in groups of five, but to up the pace, we’ll list them by ten from here on out. Here’s the next group, with prestige scores in parentheses:

21. O’Melveny & Myers LLP (6.815)
22. Clifford Chance LLP (6.772)
23. Jones Day (6.763)
24. Morrison & Foerster LLP (6.657)
25. Hogan & Hartson LLP (6.579)
26. Linklaters (6.574)
27. Milbank, Tweed, Hadley & McCloy (6.512)
28. Ropes & Gray LLP (6.501)
29. Mayer, Brown, Rowe & Maw LLP (6.494)
30. Paul, Hastings, Janofsky & Walker (6.481)

We note Magic Circle firm Linklaters making a big leap from the high 30s in the 2008 list to #26 this year — perhaps because its “notable perks” include group retreats to Europe, a drinks trolley, and an on-site doctor and dentist.
Compare. Contrast. Discuss. Thanks.
Earlier: Vault 100 Open Threads – 2009

Musical Chairs: Aaron Charney to Clifford Chance!

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Aaron Charney headshot Aaron B Charney Aaron Brett Charney.JPGBack in February 2007, shortly after young gay lawyer Aaron Charney sued his former firm of Sullivan & Cromwell, alleging anti-gay discrimination and retaliation, the WSJ Law Blog asked: “Are Aaron Charney’s Big Law-Firm Days Over?”
Based on the experts it spoke to, the WSJ concluded that “it’ll be tough for Charney, though not impossible, to find work at another big firm.” In the comments to the WSJ post, readers were less optimistic. One described Charney as “toast” — a sentiment apparently shared by many ATL readers we heard from, who found laughable the notion that Aaron Charney might someday return to Biglaw.
If you were one of those who doubted that Aaron Charney could return to a large law firm, it’s time for you to eat one of these. Next month, Charney will be joining Clifford Chance, in the Magic Circle firm’s New York office.
We reached out to both Aaron Charney and Clifford Chance for confirmation and comment. Charney did not get back to us, but the firm did. From firm spokesperson Mike Kachel:

I can confirm that Aaron Charney, a talented lawyer, will join our New York office in early September from Sullivan & Cromwell as a fifth-year associate. Aaron’s presence will further strengthen our M&A practice and we’re delighted he’s joining us.

The firm is clearly pleased to have Charney on the team. But does everyone at Clifford Chance feel the same way? The CC source who tipped us off to the news alluded to some grumbling among the rank-and-file about Charney’s hiring (but didn’t specify why people wouldn’t want to have Charney as a colleague). As for why the firm wanted to hire Charney, this tipster suggested that Clifford Chance may want to improve its standing in the gay community, after settling a sexual orientation lawsuit brought by a gay partner in London last year.
Regardless of the naysayers’ views, this does seem like a felicitous pairing. Aaron Charney gets to return to the world of corporate law and deal work, which he clearly loves. Clifford Chance gets to beef up its New York M&A practice — and enhance its diversity record, too. Congratulations to both Charney and Clifford Chance!
P.S. Clifford Chance wasn’t the only firm that flirted with Charney. As we mentioned back in May, he also interviewed with Kramer Levin.
P.P.S. Whatever happened to Charney pal Gera Grinberg? Might Clifford Chance have room for him too?
Are Aaron Charney’s Big Law-Firm Days Over? [WSJ Law Blog]
Earlier: A Brokeback Lawfirm for the Other Side of the Pond

Ex-Associate Sues Clifford Chance… for $75,000,000!!!

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Clifford Chance LLP Abovethelaw Above the Law blog.jpgPoor Clifford Chance. It seems they just keep on getting sued. First this. Now this, from the New York Sun:

A Haitian woman is suing one of the world’s largest law firms for $75 million, claiming that the firm used her only as window dressing because of her race, fired her for complaining about it, and finally blacklisted her in the New York law community.

Caroline Memnon, who is black, says in the lawsuit that despite her $125,000 salary as an associate at the New York office of London-based Clifford Chance LLP, she was never given any real work….

After firing her in 2002, Clifford Chance, known at the time as Clifford Chance Rogers & Wells, “surreptitiously ‘blackballed’ [her] within the community of New York law firms,” the suit says….

“We believe this claim to be without merit and will be contesting the case,” a Clifford Chance spokeswoman said.

Did Clifford Chance “blackball” her? Or did they just give her a less-than-stellar job reference, which employers are certainly entitled to do? [FN1]

Two other law firms, Chadbourne & Parke and Manatt Phelps & Phillips, both offered Ms. Memnon employment and then withdrew their offers, according to the lawsuit….

[Ms. Memnon] was hired by Sullivan & Worcester’s New York office and began working in February 2007. Sullivan & Worcester terminated her employment that March, though she billed 143 hours in her first three weeks there, which is above the firm’s expectation of 150 hours a month, the suit says.

The shortness of her stay at Sullivan makes one wonder if other issues are at work here. Could Caroline Memnon be another Charlene Morisseau — although probably less fabulous, since the divalicious Morisseau is in a class by herself?
[FN1] Does anyone else remember that Curb Your Enthusiasm episode where Larry David “recommends” someone for a job with Richard Lewis? Larry intends to make the recommendation a tepid one — “recommend,” in scare-quotes — but Richard doesn’t pick up on that. Law firms may be more attentive to such nuances.
Woman Sues Law Firm Over Blacklisting [New York Sun]

An Update on Clifford Chance

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Clifford Chance LLP Abovethelaw Above the Law blog.jpgTwo quick items about Clifford Chance, concerning two favorite topics here at ATL: layoff rumors and bonuses. A tipster at the firm told us:

CC/NY has laid off more structured finance associates in the wake of the six associates laid off last October. At least two more structured finance associates have been laid off in February — one straight layoff and one “pushed out,” i.e., strong-armed to leave — and there are rumors of more to come in other areas as well (such as M&A)….

The morale is low and associates [fear] that the CC/NY of the 2002 Memo vintage has come back. How can a firm which pretends to be one of the New York elite firms resort to layoffs as soon as market has slowed down? This is fantasy.

We contacted the firm, and spoke on the phone with a spokesperson:

“There have not been any layoffs since the six associates affected last October, not in structured finance nor any other practice. There aren’t any plans [for layoffs] in any practice area.”

“I’m not saying that we don’t continually monitor our business and work allocation. But we haven’t had layoffs in terms in terms of people being asked to leave for economic reasons. The layoffs in October were in direct response to market conditions in a very specialized product area, rather than a trend.”

We’re inclined to credit the firm on this. A firm that openly acknowledges layoffs, as Clifford Chance did, has more credibility when it denies layoffs than a firm that sheds a suspiciously high number of lawyers, but claims that everything is “business as usual.”
But we do have a correction to our prior report that Clifford Chance paid market bonuses, on an across-the-board / lockstep basis. Read more, after the jump.

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