It'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

Heller Ehrman continues to stave off involuntary bankruptcy, despite not being able to pay employees their accrued vacation time. But Heller's breakup continues to take weird twists.

The latest bizarre news comes from Seattle, where some associates have wondered whether they are about to be evicted from their offices. Tension was so high that Heller management had to send around a clarification email:

TO ALL HANDS (SEATTLE):

I have heard various rumors in the hallways to the effect that the Seattle office will close imminently and therefore that everyone needs to move out pronto. To clarify, here is the status.

The landlord has not issued a notice to vacate. If such a notice were issued, the notice period would be ten days. For reasons too long to explain, we overpaid rent throughout 2008. When those overpayments came to our attention, the firm asked that they be applied to cover (completely) the October rent obligation. The landlord has since asserted that the overpayments instead should be applied toward a fee that was due in connection with our give-back of space on 58. The Dissolution Committee is working with our outside counsel and communicating with the landlord to hopefully resolve this issue, and to clarify with the landlord any issues relating to removal of property from our space. To the best of my knowledge, closure of this office is not imminent and the date of closure remains to be determined, based on the pace of collections versus ongoing costs and also based on the banks' decisions about what spending they will approve.

A law firm on the edge of solvency "overpaid" their rent? We hope that the explanation for this oversight is too long and difficult to get into, but we wonder if it is just too embarrassing.

Meanwhile, the Heller refugees that ended up at Covington have officially started .

Associates that we are speaking to say that it is just starting to sink in that they will be out of a job soon. Hopefully the Seattle associates will get as much time as possible to come to grips with this reality, instead of showing up at the office one day only to find locks on the door.

Update: The Blog of the LegalTimes reports that Arnold & Porter has picked up the latest Heller refugees. The big fish is Kenneth Chernof, Heller's managing partner in the D.C. office. Any associates coming along for the ride?

Homeless In Seattle? [Heller Highwater]
Heller partners join Covington & Burling [Business Journal]
Arnold & Porter Picks Up Heller Partners [The BLT: Blog of the LegalTimes]

Earlier: Anatomy of a Dissolution: BoA & Citi Tell Heller Ehrman There's No Money For Vacation Time

* President Bush wants lawmakers to hurry up and pass the $700 billion bailout plan. Sounds like taxpayers are going to be paying back those $600 economy stimulation rebates and then some. The Dems agree to drop the provision giving greater authority to bankruptcy judges. [New York Times]

* Democrats sue in Washington to force "G.O.P." gubernatorial candidate to embrace his "Republican" identity. [New York Times]

* Guantanamo prosecutor quits, citing ethical concerns. [Washington Post]

* Kudos to these four law firms. Covington, Arnold & Porter, Katten, and Pillsbury make Working Mother magazine's best employers list. [National Law Journal]

* Who would have thought a gas mask would be needed for a DUI arrest? [WSAZ]

* Gibson Dunn's Ted Olson will appear before SCOTUS for the 50th time this fall. One secret to his success: St. Michael the Archangel. [Legal Times (subscription req.)]

* ATL's former bling-bling lawyer of the day, Gabriel Schwartz, was robbed of property worth only $63,000, by his random-lady-friend-turned-thief. [Associated Press]

It turns out that the mystery meeting at Covington & Burling involved some great news for Covington, and some bad news for Heller Ehrman.

Fifteen IP partners will be leaving Heller to join Covington, as Covington expands into Silicon Valley. The Daily Journal reports that in the wake of the latest defections and yesterday's failed merger, Heller Ehrman has decided to stop seeking merger options:

Heller management told the firm attorneys Monday that they are going to cease merger pursuits and "try to go it alone," the Heller attorney said. But some legal observers said this could be a sign of Heller's imminent dissolution. Heller partners have been in clustered meetings all day, the Heller attorney said.

Guess San Francisco isn't far enough west to escape the tough economic climate for law firms.

This should be great news for Covingtion, and you would think they would want to spread the word about their hiring coup. But apparently not. A tipster's report on yesterday's firm-wide meeting:

First came the ten-minute lecture regarding tipping off the blogs, and then the news about Silicon Valley. It surprises me that they were so freaked out about the spread of positive news in the scary economy.

It surprises us too. It's hardly a bad thing if Covington's surrogates do a better job of publicizing the firm than Covington's own PR people.

As always, we thank all of our tipsters who are willing to sit through ten minutes of "lawyer talk" in order to bring us the latest information.

Partners Leave Heller as Mayer Backs Off [Law.com]
Heller Ehrman, Mayer Brown Merger Is Off [Daily Journal] (subscription)]

Earlier: Covington & Burling's Mystery Meeting
Law Firm Merger Mania: The Heller / Mayer Merger Is Off

Last month we reported on merger talks between Heller Ehrman and Mayer Brown. Those talks have now been called off, as reported earlier today by Am Law Daily. This leaves the San Francisco-based Heller with another failed romance.

From an email sent out today on behalf of Mayer Brown chairman James Holzhauer:

As you are aware, the firm has been exploring the possibility of a merger with Heller Ehrman. After careful consideration, we have decided not to pursue that course.

Heller Ehrman is a fine firm with outstanding lawyers. Like us, they have a long heritage of excellence in their work and service to clients. A merger with them would have offered potential benefits for both firms and our clients. In the end, however, various issues, including client and practice conflicts, could not be resolved, and we have ended our discussions.

Jim

Speculation has now turned to which other firms might be in the market for Heller. Orrick? Covington? Check out the comment threads for the latest and wildest rumors.

The only thing we do know for sure is that Heller has once again been jilted. We'll bring you all of the new suitors as soon as they reveal themselves.

Mayer Brown Calls Off Merger Talks With Heller Ehrman [Law.com]

Earlier: Law Firm Merger Mania: Heller Ehrman Is At It Again

A couple of tipsters have let us know that Covington & Burling has scheduled a firmwide meeting tomorrow.

We don't think they're going to announce a merger (because no suitable partner comes to mind). We have it on good authority that they're not announcing layoffs (or anything else negative).

So what gives? Why does a firm pull all of their associates and counsel into a room? Did they just buy a coat factory?

Let the rampant speculation begin in the comments. We'll update with actual facts as soon as we receive them.

Update: The actual facts appear here.

Good news for Legal Eagle Wedding Watchers: LEWW will be returning to a more frequent and timely posting schedule! Beginning next week, we'll once again feature our gold standard of three fabulous couples per week to ogle and dissect.

We'll bring you more hot August weddings tomorrow and Friday, but for now, it's time for our readers to vote on a Couple of the Month for July. Although their write-up wasn't in the NYT and therefore didn't run in our normal LEWW column, we're including celebrity professors Samantha Power and Cass Sunstein, whose union merited LEWW bonus coverage last month (as well as a shout-out in the Washington Post's Reliable Source column).

For more information on these newlyweds, click on the link below. When you're ready to vote, here's the poll:

In honor of the new Vault rankings, we're doing a series of open threads on the 100 most prominent law firms. We invite you to compare and contrast the firms in the comments. In the last open thread on Vault firms 6-10, there was an animated discussion about litigation at Cleary and which Kirkland office is best to work for.

Moving on down the Vault 100 list, here's the next bunch up for discussion, with prestige scores in parentheses:

11. Covington & Burling LLP (7.428)
12. Debevoise & Plimpton LLP (7.417)
13. Paul, Weiss, Rifkind, Wharton & Garrison LLP (7.290)
14. Williams & Connolly LLP (7.238)
15. Sidley Austin LLP (7.201)

The oddest language in the "notable perks" in this bunch is at Williams & Connolly: "Fancy bunch of smarties." Well-dressed intelligent lawyers, or a big basket of the tart candy?

Please discuss the work, perks, and lifestyle at these firms in the comments. More threads to come.

Earlier: Vault 100 Open Threads- 2009

This morning we brought you a special sneak preview of the 2009 Vault law firm rankings (to be released in full on Tuesday, August 12, over at the Vault website). We passed along two compilations: (1) firms ranked 26-50 by prestige, and (2) firms 11-20 on the "best to work for" list.

Now, as promised, we bring you the balance of the rankings: firms 1-50 by prestige, and all 20 of the "best to work for" firms.

Check out the lists, plus comment from Vault law editor Brian Dalton, after the jump.

We interrupt the spirited smackdown of ATL Idol to bring you a couple of LEWW-related announcements. First, as expected, Team Ho-Glover scored a decisive win in June's Couple of the Month voting. LEWW salutes this glorious SCOTUS - WGWAG - Friend-of-Lat juggernaut!

In other news, two notable grooms didn't make our list of finalists this week. The first is Lee Bollinger, son of current Columbia University president (and former University of Michigan president) Lee Bollinger. And the second is Paul Lieberstein, who looks a lot like that guy who plays Toby in The Office. Because he is that guy.

On to this week's contestants:

1. Sue-Yun Ahn and Charles Kitcher

2. Jennifer Hare and Jaron Shipp

3. Gena Hatcher and David Lenzi

4. Athena Theodoro and Daniel Adamson

Click on the link below to read more about these impressive legal matches.

A clear winner emerged from the 2499 votes on ATL's Tighty-Whities caption contest:

The man in the photo is David Remes, a partner at Covington & Burling -- but not for long, as reported by the Legal Times. From the WSJ Law Blog:

David Remes, who made Law Blog headlines last week for removing his pants at a news conference in Yemen, is leaving the firm, according to the Legal Times, which reported the news over the weekend. Remes will reportedly devote himself exclusively to human rights litigation.

Last week, we reported that Remes (Columbia, Harvard Law), who's representing 15 Yemeni detainees at Guantanamo Bay, removed his pants at a news conference in Yemen. Remes was attempting to demonstrate what he feels are the inappropriate body searches that detainees are undergoing several times per day.

"At the press conference in Yemen -- this is a society where the rule of morality is so strict -- I wanted to drive home the degree of humiliation that these searches cause by illustrating a typical body search," Remes told the LB.

Biglaw doesn't like seeing those kinds of briefs.

Remes Resigns from Covington & Burling [BLT]
David Remes, Who Dropped His Pants in Yemen, to Leave Covington [Wall Street Journal Law Blog]

Earlier: 'Tighty-Whities' Caption Contest Finalists

If you work for the government, you'll earn a fraction of what you could make at a private law firm. But at least you have job security, right?

Not necessarily. From the Washington Post:

The D.C. attorney general's office told 10 lawyers and a manager this week that they are being fired to help close a $3 million deficit in the office's fiscal 2009 budget.

The cuts are also being made because of the workers' poor performance and as part of an effort to transform the agency into what interim Attorney General Peter Nickles called a "first-rate law firm" with "strong, young, able stars."

Our tipster quips: "[Nickles] is trying to turn the Office of Attorney General into a law firm. What better way to make government attorneys feel they are working in a law firm than by firing 11 of them? The only problem: Nickels doesn't realize these government attorneys are in a union."

The purge, Nickles said, is only the beginning and is part of his overhaul of the $101 million operation. Lawyers are required to wear jackets at all times, must submit reports to him each week about their casework and will soon have to clock in and out, he said.

A Biglaw environment, for government pay? Where do we sign up?

Update: As noted in the comments, D.C. Attorney General Peter Nickles is a former partner at Covington & Burling.

D.C. Attorney General Fires 11 Staff Members [Washington Post]

Covington & Burling is a bit late to the holiday bonus party, but as a spokesperson told us, their bonus announcements for non-NYC offices come in April. A tipster from the Washington, D.C. office wrote us today:

Max bonus in the DC office was $75k. Minimum was zero. Average bonus ranged, by class year, from $16k for 2nd years to $55k for 7th years. Bonuses are all merit-based -- while hours are the main factor, there is no set scale or cutoff. About 2/3 of eligible associates (i.e. those at the firm before August 1) got bonuses.

We reported yesterday that in Covington's San Francisco office, bonuses ranged from $5K to $65K.

Should you have other late-breaking bonus news, please email us (subject line: "Associate Bonus Watch").

Earlier: Associate Bonus Watch: Covington & Burling (New York)
Associate Bonus Watch: A Few More Updates
Associate Bonus Watch: Covington & Burling? (non-NYC)

We previously reported that Covington & Burling, in their New York office, paid special and year-end bonuses at market levels. But what did they do in their other offices around the country?

The firm takes its sweet time, for one thing. Last month, a tipster there wrote us:

The D.C. office of Covington & Burling still has not paid bonuses to associates. When our peers at other firms (and in NY) got bonuses months ago, it seems offensive and stingy to hold out on the bonus payment...

But that's the way things have always been. We contacted Covington and learned, through a spokesperson, that "it's been our firm's policy for years that our bonus schedule is around April 1 in all markets, except New York."

So today is April 1. Do you know where the Covington bonuses are -- and what they're like this year?

If so -- or if you have bonus news on another major national law firm, not previously covered in these pages -- please email us (subject line: "Associate Bonus Watch"). Thanks.

Update: We've learned that in Covington's San Francisco office, bonuses ranged from $5K to $65K (but don't have any more details).

Earlier: Associate Bonus Watch: Covington & Burling (New York)
Associate Bonus Watch: A Few More Updates

Sorry we're late to the party on this HuffPo post, bearing the provocative title "Law Firm Segregation Reminiscent of Jim Crow." It's by Yolanda Young, a former staff attorney at Covington & Burling. Her claim, in a nutshell, is that Covington fills the ranks of its "staff attorney ghetto" with African-Americans, while the ranks of its partnership and partnership-track associate pool are overwhelmingly white.

Young's post has already been discussed at Legal Blog Watch and the WSJ Law Blog. But considering how we love to fan flames of racial tension follow the issue of diversity in the legal profession so closely here at ATL, of course we're going to cover it.

Here's an excerpt (emphases added):

Blacks at Covington comprise less than 5% of the Washington office's partners and associates, but make up 30% of its staff attorneys. A peek at the firm's website doesn't reveal this since, unlike all other lawyers there, staff attorneys aren't pictured. Were they, a peculiar pattern would emerge.....

Covington's black staff attorneys (like its black partners and associates) hail from top law schools like Harvard, Duke and Georgetown while several white associates and partners attended schools like Catholic, Kentucky and Villanova (all ranked well below 50). Taken as a whole, the black staff attorneys' average law school rank is higher than that of white staff attorneys at the firm.

Blacks bought into the notion, stressed by legal literature, ranking systems and law firm recruiting departments, that investing in a top legal education is paramount for those wishing to work at top law firms. It's disheartening to then discover that the black student who borrows $120,000 to attend Georgetown will only earn half that of the white associate who's paid $60,000 to attend the University of Maryland.

Covington began stockpiling its staff attorney ghetto with blacks and other minorities in 2005, shortly after the General Council [sic] of some of the country's largest companies joined Roderick A. Palmore, Executive Vice President, General Counsel & Secretary of Sara Lee in taking a tougher stance on law firm diversity. Signed by hundreds of General Counsel, this new "Call to Action" states they will retain firms that demonstrate a level of diversity reflective of their employees and customers and end their relationship with firms "whose performance consistently evidences a lack of meaningful interest in being diverse."

Covington has certainly diversified its firm; however, its attorneys are far from equals. The vast majority of Covington's black attorneys do no substantive work, have no control over their case assignments and no opportunity for advancement. This seems to be just the sort of structure the U. S. Equal Employment Opportunity Commission warned against in its 2003 "Diversity In Law Firms" report which stated, "In large, national law firms, the most pressing issues have probably shifted from hiring and initial access to problems concerning the terms and conditions of employment, especially promotion to partnership."

You can read the rest of the post -- it's quite lengthy -- over here.

What explains our delay? We were doing the MSM thing of waiting to hear back from Covington before posting (instead of just going ahead and writing about it, which would have been the more bloggy thing to do). They just got back to us, a few minutes ago; here is the first part of their statement:

We have long been committed to equal opportunity at all levels of hiring. Our ongoing efforts show positive results. In the case of our staff attorneys, we've been very successful in recruiting African-American lawyers. We attribute our success to a number of factors. We offer competitive compensation and benefits, which we will likely further enhance in the near future. This includes the innovative benefit of pay for pro bono work, and our staff attorneys average about 70 hours of pro bono work a year. Our staff attorneys are a stable, productive and respected part of our workforce. Part of this stability can be attributed to our recruitment process, which has benefited from the great number of referrals from our current staff attorneys.

The rest of the Covington statement appears after the jump.

In addition to reading Young's post and the coverage of it, check out the material on the rest of her blog for background. Props to her for coming up with such headline gems as "Think of my mouth as your next sexual partner."

P.S. Disclaimer: Please note that Kashmir Hill, former Covington & Burling paralegal, had no role in the writing of this post.

Law Firm Segregation Reminiscent of Jim Crow [Huffington Post]
Georgetown Law Grad Says Big Law Segregation Reminiscent of Jim Crow [Legal Blog Watch]
Ex-Staff Attorney Takes Aim at BigLaw Minority Hiring [WSJ Law Blog]
Spade Project [video blog of Yolanda Young]

The holiday season is pretty much over, and bonus season kinda is, too. But it's not completely over, so we'll still bring you occasional updates on news that comes across our desk. If you have information to share, please email us (subject line: "Associate Bonus Watch").

While placing info in the comments is helpful, comments aren't subject to verification and follow-up in the same way as emails. Also, due to sheer volume, we can't (and don't) read every last comment. So email is still the best way to send us bonus info (or request that we cover a given topic).

Here are some associate bonus odds and ends:

1. Quinn Emanuel: Lots of unhappy campers. The upshot is that they employed a very bright-line 2100 hours cutoff to get the full bonus. More details, after the jump.

2. Fish & Richardson: They announced a new compensation plan back in November. It didn't go over so well. To their credit, they seem to be reversing themselves (for the most part; look out for a higher hours requirement). More details, after the jump.

3. Covington & Burling (New York): We previously reported on their special bonuses, which matched market. In case you were wondering, they're also paying the standard year-end bonuses (in New York).

4. Bracewell & Giuliani (New York): We haven't written much about them before. But since name partner Rudy Giuliani is in the news a lot lately, thanks to his presidential bid, and some folks were kind enough to send their memo our way, we provide their bonus announcement after the jump.

5. Kasowitz Benson: We also haven't written much about Kasowitz Benson before. It's a very profitable shop, and a bit on the secretive side. Since several people passed along their bonus memo, though, we're happy to post it after the jump.

It's good to be an associate at Covington & Burling these days.

There's the cleaned-up Wikipedia entry. There are, for New York associates, spiffy new offices in the Renzo Piano-designed New York Times building. One Covington associate describes the new digs as "spectacular," with views of the Statue of Liberty, George Washington Bridge, and Empire State Building. "They are a bit cold and impersonal, but we are a law firm, after all."

Also for New York associates: special bonuses. Check out the Covington (New York) bonus memo, after the jump.

We were pleasantly surprised by the robust and intelligent discussion in the comments to our earlier open thread, Fall Recruiting Open Thread: Vault 1-5. There were over 100 comments, and many of them were quite informative. So we will press on.

The next five firms up for bids, in Vault 100 order (prestige scores in parentheses):

6. Simpson Thacher & Bartlett LLP (8.116)
7. Cleary, Gottlieb, Steen & Hamilton LLP (7.759)
8. Latham & Watkins LLP (7.712)
9. Weil, Gotshal & Manges LLP (7.672)
10. Covington & Burling LLP (7.510)

Please compare and contrast these firms, and discuss what it's like to work for them, in the comments. Thanks.

The Vault Top 100 Law Firms [Vault]

Some good news for law clerks heading to the New York office of Covington & Burling after their clerkships. A source at the firm directed us to check out this updated section of their website:

We reward judicial clerks who come directly to the firm following their clerkship(s) with credit for purposes of both salary and partnership consideration, together with a $50,000 bonus for one clerkship and a $70,000 bonus for two clerkships for those who have clerked for a federal judge, or for the highest court in any state or the District of Columbia.

So add a new member to the $50K/$70K Club. But note that Covington is taking the Ropes & Gray approach: the new and improved clerkship bonuses are paid out in New York only. In Washington and San Francisco, the firm still pays a $35,000 clerkship bonus.

Update: Also noteworthy, per a commenter: "This is different from the other $70K bonuses in that it only applies to people with two-clerkships, rather than one two-year clerkship."

In addition, we've heard a rumor that Willkie Farr & Gallagher has raised its clerkship bonus to $50,000. But we haven't seen the email, and Willkie's website and NALP form don't reflect this info. If you can confirm, please drop us a line.

A "List of Shame" for top firms paying below-market clerkship bonuses, after the jump.

The rumors were correct (as they so often are). Before the Memorial Day weekend, Covington & Burling raised associate salaries to the $160K scale. The raise is retroactive to May 1, and summer associates are in on the fun.

Alas, it took us a while to get our hands on the memo. We obtained it only after threatening people with Gitmo making affirmative requests of multiple sources at the firm.

C'mon, folks -- show us a little love. We can't accurately track law firm salary developments without your help. If you have a pay raise memo we haven't previously posted, stop holding out on us. Please send it to us by email.

The fruit of our labors, namely, the Covington memo, after the jump.