History repeats itself. We quote from our post of January 10:

Just half an hour ago, based on information we gleaned from various sources, we asked: "Is today Layoff Day at Cadwalader?" The answer would appear to be: YES.

Earlier this morning, we once again posed the question: "Is today Layoff Day at Cadwalader?" And once again, the firm has confirmed -- this time to the WSJ Law Blog -- that it will be laying off 96 lawyers, from counsel on down to first-year associates. The intelligence in our post from earlier this morning, which estimated the carnage at "as many as 100 attorneys, ranging from special counsel down to the current first-year associate class," was essentially correct.

90 of the 96 cuts will come out of the real estate finance and securitization practices, said the firm's chairman, Chris White. Most of the affected lawyers, said White, are in the New York, Charlotte and London offices, with "one or two" in Washington. The 96 layoffs are in addition to the 35 lawyers the firm laid off in January.

Wow -- that's a ton of attorneys. Ninety-six lawyers would appear to be the biggest round of lawyer layoffs in the current economic cycle (see Bruce MacEwen's layoffs table). Congratulations, Cadwalader!

Cadwalader chairman Chris White gives the WSJ Law Blog a spiel about how the firm got caught up in the mania surrounding commercial mortgage-backed securities:

"There was a frothiness that occurred as a result of the Blackstones and the Apollos using mortgage-backed securities to fund their buyouts. It was a lot like junk bonds becoming the instrument of choice in the late 80's and early 90's."

White explained that, in 2004, there were only $98 billion worth of mortgage-backed securities issued. In 2008, he said, that number ballooned to $314 billion. "So we grew right along with client demand. And now that market has contracted severely. That $314 billion from last year will go to roughly $60 billion in 2008 -- an 80% contraction."

With his use of the passive -- "[t]here was a frothiness" -- and his "we grew right along with client demand" remark, White seems to be offering a "not our fault, everyone was doing it, nobody predicted this" sort of defense. But isn't it the job of firm management to make sure that a firm is well-diversified among practice areas and adequately protected against downside risk?

(Perhaps the WSJ Law Blog should have pressed White a bit harder on this. Maybe they could have gotten White to throw former chairman Bob Link under the bus, since the firm's disastrous overexpansion happened under Link's watch. Link is the leader featured in the firm's embarrassing-in-hindsight video advertisement.)

To be sure, other Biglaw shops have been hurt by the credit crunch and the economic downturn. But after this latest round of layoffs, involving close to 100 lawyers, it lies beyond dispute that no major firm has been hit as hard as Cadwalader. This obviously raises questions -- or should, in the mind of anyone looking to work for or retain CWT -- about whether the firm is well-managed.

As for offering the "affected" associates an opportunity to transfer into other groups, White said, "We can do that a little bit at the junior levels -- the first and second years -- but, at the third, fourth and fifth years, lawyers aren't fungible."...

Markel said that the 96 associates who are laid off will receive severance pay through the end of the year.

Five months' severance -- is this accurate? If so, it's definitely on the generous side. So look on the bright side, CWT associates: you're getting almost half a year of paid vacation.

We'll have more on the Cadwalader situation as it unfolds. If you have info to share, please email us. Thanks.

Update: More about the Cadwalader layoffs appears here.

Cadwalader to Cut 96 Lawyers [WSJ Law Blog]

This is, like, WOW. We don't quite know what to say.

This departure memo, sent by an associate leaving the San Francisco office of Paul Hastings, is extraordinary. It also confirms the rumors -- which have swirled about for quite some time, but without confirmation until now -- of associate layoffs at PH.

We're reaching out for comment to the associate in question and to Paul Hastings. But we wanted to put this up ASAP, to break the story first.

Farewell email below (with a handful of minor typos corrected). "Transition Agreement and General Release," after the jump.

*******************
From: [Redacted]
Sent: Monday, May 05, 2008 10:14 AM
To: [redacted]
Subject: My departure

The circumstances surrounding my departure from Paul Hastings have been deeply disappointing. It is one thing to ignore an email sent as a colleague is waiting to have her uterus scraped after a miscarriage, but it is wholly another level of heartlessness to lay her off six days after that. [Partner X] is the only one who expressed any sympathy after my miscarriage, and I am grateful to him for that.

A business is a business, but it takes very little to convey some level of humanity to carry out even the most difficult business decisions. We are human beings first before we are partners or associates. Had you simply explained that the department is unable to sustain the number of associates in the office, I would have completely understood. Had you explained that the office had been directed to reduce the number of associates and I was chosen because of my high billable rate and low billable hours, I would have appreciated such directness, even though the consequences of blindly raising billable rates to an unsustainable degree is plainly predictable. What I do not understand is the attempt to blame the associate for not bringing in the business that should have been brought in by each of you and to hide your personal failures by attempting to tarnish my excellent performance record and looking to undermine my sense of self esteem.

The last few months have been surreal, at best. Just last year, I had celebrated my engagement and marriage with many of you. In fact, during the engagement party, the head of the department took my then-fiancée aside to express to him what a great attorney I am and what a great future I faced. Indeed, less than a week before this year's bizarre performance review, I was again told by the same partner that my work is great and that the slow business in no way reflected on my performance. A week later, I was given a mediocre performance review and told that I should worry about whether I have a future at Paul Hastings. When I asked for specific examples of my alleged deficiencies, I received no response. When I asked for an explanation as to why I had been downgraded in so many performance categories when I received absolutely no criticism throughout the year and my prior year's review was stellar, I was told that my prior year's performance assessment may have been "over-inflated." What a startling response.

After my miscarriage, I had discussed my concern with several associates that Paul Hastings may use that opportunity to lay me off quickly before I have a chance to get pregnant again. Those associates thought it unfathomable that a firm would be so callous and assured me that Paul Hastings isn't that kind of a place. What a lesson this has been for them - and for me. I would not have anticipated that a partner would tell me one thing and completely renege on his words a week later. I would not have anticipated that a female partner (whom I had looked to as a role model) with children of her own would sit stone faced as I broke into tears just days after my miscarriage. Even a few words of sympathy or concern would have made a world of difference. What kind of people squander human relationships so easily?

If this response seems particularly emotional, perhaps an associate's emotional vulnerability after a recent miscarriage is a factor you should consider the next time you fire or lay someone off. It shows startlingly poor judgment and management skills -- and cowardice -- on your parts. If you should ever have the misfortune of suddenly losing something or someone precious to you, I hope you don't find similar heartlessness as I have.

As for your request for a release, non-disclosure, and non-disparagement agreement in return for three months' pay, I reject it. Unlike you, I am not just a paid mouthpiece with no independent judgment. I will decide how and to whom to communicate how you have treated me. I find it ironic that you would try to buy the right not to be disparaged after behaving as you have. Your actions speak volumes, and you don't need much help from me in damaging your reputation.

I attach the proposed release for any associate who may be interested in reviewing its details.

[Redacted]

*******************
And that's all she wrote. The release that Paul Hastings wanted this associate to sign, after the jump.

Update (5:10 PM): We have heard back from the associate in question, who had no additional comment.

Update (8:20 PM): Previously posted in the comments, but now we can bring it up to the main page. Here is Paul Hastings's statement, from Eileen King, Global Director of Public Relations:

"We disagree with the person's description of what occurred, but unfortunately we don't comment on internal employment matters."

Update (5/6/08): Blog reactions to this story are collected here. Additional discussion of pregnancy discrimination cases appears here. Lawyer layoffs at Paul Hastings are covered here.

Further Update (5/9/08): The author of the email, Shinyung Oh, has gone public and given an interview. See here.

Guess we picked our Lawyer of the Day too soon.

Update (2:30 PM): Press conference scheduled for 2:15 p.m., but Governor Spitzer is running 15 minutes late. "I don't blame him," said Ben Smith of the Politico, interviewed just now on CNN.

Update (2:35 PM): Jeffrey Toobin, who was an HLS classmate of Eliot Spitzer, described the news as "a total shock." He said Spitzer has been "nothing but a straight arrow" for many years.

Update (2:50 PM): Still no press conference. Brooke Masters, author of Spoiling for a Fight: The Rise of Eliot Spitzer, was just interviewed on CNN. She noted that this scandal comes at a bad time for Spitzer politically, in the wake of last year's scandal involving his misuse of the State Police for political purposes.

Update (3 PM): We're stepping away for a bit, to give a talk at Stanford Law School. We'll be back online as soon as we can. Some content will be posted while we're gone (material prepared ahead of time, not Spitzer updates).

Developing... Check back for updates.

Spitzer Is Linked to Prostitution Ring [New York TImes]

It's very early, but it's true: Cravath, Swaine & Moore announced bonuses today!!! Here are the numbers:

Class of 2007 -- Year end bonus $35,000 (prorated), no special bonus
Class of 2006 -- Year end $35,000, special $10,000
Class of 2005 -- Year end $40,000, special $15,000
Class of 2004 -- Year end $45,000, special $20,000
Class of 2003 -- Year end $50,000, special $30,000
Class of 2002 -- Year end $55,000, special $40,000
Class of 2001 -- Year end $60,000, special $50,000
Class of 2000 -- Year end $60,000, special $50,000 (same as 2001)

Update (5:05 PM):

1. No official comment from the firm (we called their spokesperson), but this news is solid. It has been confirmed for us by multiple sources at Cravath, by phone and by email.

2. As noted in the comments, the "special" bonuses will be paid in November (on November 9, to be exact). The year-end bonuses will be paid in December.

Update (5:40 PM): If you'd like to compare this bonus table to what Cravath (and pretty much everyone else in New York) paid last year, you can check out the 2006 CSM bonus memo over here. As you can see, the year-end bonuses for this year and last year are basically the same; it's just that this year, there are "special" bonuses that take total compensation higher.

Also, recall that the base salaries in effect in December 2006 were lower than current base salaries. The Simpson Thacher-led move to $160K didn't happen until January 2007. So between the higher base salaries and the "special" bonuses, CSM associates this year are significantly better off than last year's batch.

As for timing, last year's Cravath bonus memo was issued on December 11, 2006. So this year's bonus announcement comes quite early in the season. The 2006 bonus season was kicked off by Milbank, which announced on December 8, 2006.

Earlier: Associate Bonus Watch [2006]: A Real Milbank Bonus Announcement
Associate Bonus Watch [2006]: Cravath Announced; Cadwalader Rumored
Breaking: Simpson Thacher Raises Associate Base Salaries!!!

Related: Associate Bonus Watch 2007 archives (scroll down)

Yes, the Brokeback Lawfirm litigation has come to an end. No, this is not an April Fools' joke.

Sullivan & Cromwell and Aaron Charney ride off into the sunset, with Charney a little sore in the saddle -- from all the money he's sitting on. No more "bending over" for this cowboy.

The scoop, from Anthony Lin, appears in the New York Law Journal:

Sullivan & Cromwell said Thursday it had reached a settlement with former associate Aaron Charney, who sued the New York law firm earlier this year for sexual orientation discrimination.

"Aaron Charney and Sullivan & Cromwell have resolved their differences in connection with all pending disputes between them," the firm said through a spokesman.

Charney's lawyer, Daniel Alterman of Alterman & Boop, did not return a call for comment.

The settlement, the terms of which are confidential, brings to a close a dispute that had fascinated the New York legal community over the past several months, both with its allegations concerning partners at one of the city's most prestigious firms and its bizarre twists and turns in the courtroom.

The rest of the piece recites the facts of the case and its procedural history, which will be familiar to ATL readers. But it's a clear and cogent summary, and you can read the rest of it here.

We'll have more to say in the morning. In the meantime, have at it in the comments.

Aaron Charney, wherever you are: Good night, and good luck. And if you need any help spending those settlement proceeds -- call us.

P.S. Anthony Lin's article was linked to by Howard Bashman at 10:58 PM, but we're not exactly sure when the news broke. (We just got home from the Georgetown Law EJF auction, which was great fun.)

Sullivan Settles With Former Associate Who Sued Firm for Discrimination [New York Law Journal]

Sources in the New York office of Cadwalader, Wickersham & Taft have informed us that a bed bug has been found on the 20th floor. It is believed that said bedbug infiltrated the premises through a delivery or box shipment. Perhaps it was hidden in a document production from opposing counsel?

Attorneys were notified of this breach in CWT's bed bug security via email. We haven't seen the email message, which we understand was protected against forwarding, printing, or copying.

But if you have further details, please post them in the comments (or email us). Thanks!

Update: We like this commenter's speculation: "Cameron Diaz brought it!"

Earlier: Breaking: Cadwalader Overrun By Bed Bugs!!!
Cameron Diaz at Cadwalader!

A first-year student at Yale Law School was found dead in his apartment last night.

You read it here first; the story is developing. More details to appear in this space; refresh your browser for the latest updates.

Update (12:40 PM): We just got off the phone with Bliss Bernarda in Yale's Office of Public Affairs. She confirmed that a Yale Law School student has died but said the university does not have further comment at this time. We provided her with our contact information, and we will let you know if and when the school issues a statement.

Update (1:05 PM): We are hearing that the death may not have been violent (as some people appear to be assuming) -- that he may have died of natural causes. But we don't have confirmation or details.

Further updates appear after the jump.

In addition to a story on the Nixon Peabody song controversy -- which we'll do a full post on later, so save your comments until then -- the New York Times has this big scoop:

Attorney General Alberto R. Gonzales, whose tenure has been marred by controversy and accusations of perjury before Congress, has resigned. A senior administration official said he would announce the decision later this morning in Washington.

Mr. Gonzales, who had rebuffed calls for his resignation, submitted his to President Bush by telephone on Friday, the official said. His decision was not immediately announced, the official added, until after the president invited him and his wife to lunch at his ranch near here.

Any thoughts on a successor?

Update: We liveblogged the (extremely short) press conference by Alberto Gonzales announcing his resignation. See here.

Gonzales Resigns as Attorney General [New York Times]

A steam pipe exploded on Manhattan's East Side, right in the middle of evening rush hour. One person is dead and more than twenty are injured. Eyewitnesses describe it as "the scariest thing I’ve seen since 9/11" -- a scene of mass hysteria, with "thousands running fearfully" through city streets.

Mayor Michael Bloomberg is giving a briefing right now. In the real-time coverage of these events on the New York Times's excellent City Room blog, there's a shout-out to one of your favorite law firms:

6:55 p.m. | Simpson Thacher & Bartlett, a large law firm with offices at 425 Lexington Avenue, at East 43rd Street, was one of many companies to evacuate their workers.

“It sounded at first like thunder, but it just didn’t end. It was a really loud, deep, sustained explosion,” said Andrew T. Frankel, a partner at the firm, who works on the 23rd floor. “We all looked out the window and saw black smoke just billowing up 43rd Street. It was pretty frightening, more for the unknown than anything. Nobody waited for the evacuation warning. Everybody headed for the stairwell and headed out of the building. People were tense, but calm.”

“We did floor sweeps and there’s nobody left in the building except the emergency response team in the lobby,” said an operator who answered calls to employees at the firm.

Not even WP? You know something is up when a Biglaw shop is deserted by 7 PM. On a Wednesday.

If you witnessed this evening's events, please share what you saw, in the comments.

Steam Explosion Jolts Midtown; One Person Is Confirmed Dead [City Room / New York Times]
One Dead After East Side Explosion [WNBC.com]

Here's a development that has Colorado prosecutors saying "oh crap" -- quite literally. From the Rocky Mountain News:

A former Democratic Party activist who left dog feces on the doorstep of U.S. Rep. Marilyn Musgrave's Greeley office during last year's 4th Congressional District campaign was found not guilty Wednesday of criminal use of a noxious substance.

So what happened? Did the prosecution fail to establish the element of noxiousness?

Ensz's lawyers never denied that their client left a Musgrave campaign brochure full of feces at the front door of the congresswoman's office. But they argued that Ensz was making a statement protected by free speech - the poop was a symbol of what she thought of Musgrave's politics.

"Her only intention of going over there was to make a political statement that Marilyn Musgrave's politics stink," attorney Shannon D. Lyons said after the verdict.

Is feces flinging the flag burning of the future?

Woman acquitted of illegal poop use [Rocky Mountain News]

It's Good Friday -- the Friday before a big holiday weekend. And we all know what that means: a high-profile resignation, timed in an attempt to avoid the news cycle.

Today we bid a fond farewell to the fabulous Monica M. Goodling. As de to Attorney General Alberto Gonzales, Monica Goodling helped coordinate the controversial firings of eight United States attorneys. When called upon to testify about the matter before Congress, she invoked the Fifth Amendment privilege against self-incrimination.

Oh, Monica -- you will be missed. Long after you disappear from the newspaper headlines, you will live on in our hearts. We will always carry a torch for you.

Like so many great blonde icons -- Marilyn Monroe, Lady Diana Spencer, Anna Nicole Smith -- you left us before your time. So it is fitting and proper that we quote from these lyrics, as we mark your passing from the halls of justice:

And it seems to me, you lived your life
Like a candle in the wind
Never knowing who to cling to
When the rain set in
And I would have liked to have known you
But I was just a kid
Your candle burned out long before
Your legend ever did

Eternal rest grant unto the Justice Department career of Monica Goodling, O Lord. And let perpetual light shine upon it. May it rest in peace. May her DOJ career, and the careers of all the faithful departed, rest in peace. Amen.

Gonzales Aide Goodling Resigns [Associated Press]
Top Gonzales Aide Monica Goodling Resigns [Washington Post]
Gonzales Aide Who Refused to Testify Resigns [New York Times]

Earlier: Prior ATL coverage of Monica Goodling (scroll down)

No really, it does! The National Law Journal tells us so:

Now where's our Drudge siren gif?

Largest law firms hire from elite schools [National Law Journal]

Like the mystery smell that took over the NYU law school library last month, the cause is unknown.

This sounds worrisome. Con Edison is investigating.

This natural-gas odor is being detected in midtown and downtown Manhattan, home to countless law firms. If you're noticing this smell in your workplace, feel free to share your firsthand account of it (after securing your own gas mask).

Gas Smelled Over Large Area Of Manhattan [NBC via Drudge Report]
Gas-Like Odor Permeates Parts of New York City [Associated Press]

For those of you who enjoyed poking fun at Harriet Miers during her ill-fated Supreme Court nomination, you won't have her to kick around anymore.

(Yes, we know. When it comes to mockery of Harriet Miers, we have somewhat unclean hands.)

We must step away from our computer now. As Howard Bashman might say, we are meeting a very cool and important law professor for lunch (but won't name him or her). Hahaha.

We'll resume our coverage of the Miers demise after we return.

Miers Resigns As White House Counsel [Associated Press]

We're reading Tony Mauro's super-juicy article as fast as we can. Highlights and discussion will follow shortly.

Okay, we're done. Here are some excerpts:

The late Chief Justice William Rehnquist’s Senate confirmation battles in 1971 and 1986 were more intense and political than previously known, according to a newly released FBI file that also offers dramatic new details about Rehnquist’s 1981 hospitalization and dependence on a painkiller....

In July 1986, when President Ronald Reagan nominated Rehnquist to be chief justice, the Justice Department asked the FBI to interview witnesses who were preparing to testify that Rehnquist had intimidated minority voters as a Republican Party official in Arizona in the early 1960s. According to a memo in the Rehnquist file, an unnamed FBI official cautioned that the department “should be sensitive to the possibility that Democrats could charge the Republicans of misusing the FBI and intimidating the Democrats’ witnesses.” But then-Assistant Attorney General John Bolton — who more recently served as ambassador to the United Nations — signed off on the request and said he would “accept responsibility should concerns be raised about the role of the FBI.” It is unclear whether the FBI ever interviewed the witnesses.

John Bolton? That guy is everywhere! Did he have the walrus moustache back then?

More discussion -- including tales of Rehnquist's "bizarre ideas and outrageous thoughts," his paranoia that the CIA was out to get him, and his attempt to escape from a hospital while in pajamas -- after the jump.

And at the peak of final exam studying, too! Our Greenwich Village correspondent reports:

I don't know what it is, but it smells like the law library is in a dump. I gave up and left an hour ago. The whole basement of the library was EMPTY. But there were holdouts in the corners and the top floor in Vanderbilt.

We don't know what the smell IS....

And from another NYU source:

People have been thanking me for confirming that they weren't nuts. We've asked the librarians [about the mystery smell], but they have no answers.

From a commenter:

It smells like a Dumpster / port a potty combo, with an emphasis on the Dumpster. Think rotting trash in warm weather.

DEVELOPING...

That's what CNN and the Associated Press are reporting. President Bush is holding a press conference at 1 p.m.

This is obviously big news. Is it law-related? Yes, insofar as the global "war on terror" has raised a whole host of thorny legal issues: treatment of terror detainees, appropriate interrogation methods under the Geneva Convention, etc. A new Secretary of Defense may approach these issues in a different way.

(Also, even though Secretary Rumsfeld is not a lawyer, back in 1982 he served as Presidential Envoy on the Law of the Sea Treaty. And as everyone knows, maritime law is the bomb.)

GOP Says Rumsfeld Stepping Down [Associated Press]
Donald H. Rumsfeld bio [U.S. Department of Defense]

Midterm elections, consider yourselves upstaged. Pop princess Britney Spiers is divorcing her wastrel husband, Kevin Federline.

More details, from TMZ (which broke the story, and has a copy of the divorce petition (PDF)):

[T]he legal papers, filed today in Los Angeles County Superior Court, [cite] "irreconcilable differences." In her petition, Spears asks for both legal and physical custody of the couple's two children, one-year old Sean Preston and two-month old Jayden James, with Federline getting reasonable visitation rights.

As for money, sources tell TMZ the couple, who married in Oct. 2004, has an iron-clad prenup. Not surprisingly, Spears is waiving her right to spousal support. She's also asking the judge to make each party pay their own attorney's fees....

Spears has hired powerhouse celebrity divorce lawyer Laura Wasser, who has repped a number of celebs, including Angelina Jolie, Nick Lachey and Kiefer Sutherland. We're told Reese Witherspoon and Ryan Phillippe asked Wasser to rep both of them in their split, but Wasser declined for personal reasons.

We're all in favor of keeping marriages together. But this split may be for the best. K-Fed was bad news from the start.

If any of you have worked with or litigated against Spears's attorney, Laura A. Wasser, and can tell us a little more about her, please drop us a line.

Britney Spears Files for Divorce [TMZ.com]
Britney Spears FINALLY Divorces K-Fed [Gawker]
Britney Spears Divorcing K-Fed, Immediately Begins Search For Next Bad Relationship [Defamer]
Britney Spears Files For Divorce, Quashing Further Use of 'Spederline' [Jossip]
Laura Allison Wasser bio [Martindale-Hubbell]
Divorcing Stars Pick This Group: Top Hollywood Divorce Lawyers [USA Today]

The court rules that the State of New Jersey must provide for some way for gay couples to enter into legally-recognized unions.

* Committed same-sex couples "must be afforded on equal terms the same rights and benefits enjoyed by opposite-sex couples under the civil marriage statutes."

* The 4-3 ruling rests upon the New Jersey Constitution, not the U.S. Constitution. Translation: The buck stops here. Nyah nyah.

* Unlike the Massachusetts Supreme Judicial Court, New Jersey's high court did not mandate bestowing upon gay unions the magical "M" word, "Marriage."

* Instead, what to label this legal relationship will be decided by the legislative process. So expect it to get called "civil union" (as in Vermont).

* The state legislature has 180 days to enact the legislation providing for same-sex unions.

You can access the opinions, as a PDF file, by clicking here.

N.J. Court Backs Rights for Same-Sex Unions [New York Times]
New Jersey Court Sends Gay Marriage to Legislature [Reuters]
NJ Court Stops Short of Gay Marriage OK [Associated Press]
Lewis v. Harris (PDF)

Instead, you should be reading about the small plane aircraft that just crashed into a residential high-rise building in New York City.

Actually, we take that back. You can read about the crash right here; we're following the story on the cable news networks. Refresh your browser for our updates on this developing story.

Update #1: At least two confirmed dead. Initial reports suggest that this incident is NOT terrorism related.

Update #2: Drudge has changed his headline text from red back to black. According to DHS spokesman Russ Knock, "The initial indication is that there is a terrible accident." Up in New York, home of our corporate Mother Ship, the NYPD is out in full force.

Update #3: CNN is now reporting that the pilot of the four-passenger aircraft, which took off from Teterboro Airport in New Jersey, put in a "mayday" call before the crash. The pilot cited a fuel problem.

Update #4: A pitcher for the New York Yankees, Cory Lidle, may have been on board the aircraft in question. Lidle's passport was found on the street after the crash.

Update #5: At least four people were killed in the crash.

Small Aircraft Hits Manhattan Building [Associated Press via Drudge]
Small Aircraft Crashes into Manhattan High Rise [Reuters]
Small Aircraft Hits Building in Manhattan [New York Times]