It’s March and Katten Muchin is coming into it like a very meek lamb. The firm froze salaries in 2009. So far in 2010, it has sent a series of memos trying to explain why it can’t get its act together. A tipster reports:
You may recall that most associates had their salaries frozen and then cut in 2009. We continue to receive frozen-then-cut salaries at this time, although the memos state that we will get retroactive payments back to January 1 on “any increase” that occurs. All the other Chicago firms have spoken (with double bumps), but Katten is waiting on something…we guess. At this point we’re wondering whether we’ll know our 2010 salaries in 2010!
Check out the memos. They’re a case study in “we’re waiting for others to tell us how to run our business.”
Some lawyers love what they do. Those who don’t are vocal about how much they hate their jobs. So what would the naysayers prefer to be doing professionally? Above the Law editors have heard these “dream careers” tossed around: government intelligence analyst, writer/journalist, banker (so they can keep making the bank), and — for those who want to stay in the law, but not Biglaw — assistant U.S. attorney, judge, or law school professor.
Some people are content to stay in the law but need a creative/fun outlet. It’s an added bonus if that outlet also makes money. One such endeavor is to open a restaurant. (The belief that most restaurants fail in the first year is a myth, after all.)
We’ve written before about lawyer-turned-Subway entrepreneur Larry Feldman. But being king of a sandwich-shop franchise is not really the glamorous side of food service. The daydream version involves starting up a place with a bit more character.
For some, being laid off has been a push to tap into a culinary side. Here in New York, a first-year associate caught up in law firm layoffs used the opportunity to open a Taiwanese steamed bun cafe in the Lower East Side, called Baohaus.
Further south, in Washington, D.C., another casualty of the recession layoffs got into the eat-out business. Julie Liu, a former Katten Muchin associate, launched a restaurant in Dupont Circle last year named Scion. She was very thankful to Katten for her three-month severance: it “basically paid for Scion’s kitchen equipment.”
We caught up with Liu about opening a restaurant with her sister, and got some advice for other wannabe restaurateurs.
Would you swap corporate securities work for chipotle seasoning? Nancy Andrade did. The Catholic University ’93 grad quit her job at Katten Muchin in 2001, to start a family tamale-making business called Mexifeast. Their tamales are sold at Walmart, Whole Foods and Jewel.
So how did Andrade go from handling derivative claims to hawking corn-husked deliciousness? She tells the Chicago Tribune that her tamale-loving colleagues at Katten were part of the push in the frozen food business direction:
When I started at Katten (Muchin Rosenman) and people discovered I was Mexican-American, they’d ask me where to get good tamales.
Thank goodness for ethnic food stereotypes. Did Justice Sotomayor’s new colleagues ask her where to buy burritos in D.C.?
So how did Andrade respond to the tamale inquiries from her co-workers?
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.
Katten Muchin is using every tool in the box when it comes to figuring out what to do with its incoming associates. If there is a plan for dealing with soon-to-be first years that has been discussed on Above the Law, Katten is using it.
A tipster reports that Katten has broken up its first year class into three groups:
Katten Muchin Rosenman rescinded several offers to 2008 summer associates today. From what I’ve heard about 1/3 were rescinded, 1/3 were re-deferred to October, and 1/3 will start in February as scheduled.
Essentially, Katten just turned itself into Alec Baldwin in Glengarry Glen Ross: “As you all know, first prize is a Cadillac Eldorado. Anybody want to see second prize? Second prize is a set of steak knives. Third prize is you’re fired.”
Let’s talk some more about the third prize after the jump.
Ed. note: Above the Law has teamed up with Law Shucks. Law Shucks has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.
For a while there it would look like the first consecutive weeks without layoffs since this time last year (by our reckoning, you have to go back to the weeks ending October 9 and October 2, 2008). Alas, one firm did come through with staff layoffs, about which more after the jump.
As usual, we begin with the US macroeconomic picture, and as usual, it ain’t pretty. For the week, the S&P 500 was down about 2%. That was the second straight week of losses, and the DJIA had its biggest weekly decline in three months. 263,000 net jobs were lost in September and the unemployment rate rose to 9.8 percent, despite perhaps the technical end of the recession. As with the stock market, bad results are one thing, but results worse than expectations are another, and that was the case here. Consensus estimates were net losses of 175,000, so the actual results were way short. August’s revised numbers were slightly better than original reports, though.
The poor results are creating pessimism around when things will start to turn around:
[T]he report also buttressed fears that economic expansion would be weak and hesitant, with scarce paychecks and economic anxiety remaining prominent features of American life well into next year.
“This is a weak report,” said Stuart G. Hoffman, chief economist at PNC Financial Services Group in Pittsburgh. “The rate of job loss has tapered off, but we still haven’t reached the point where businesses are willing to hire.”
Could this create political difficulties for the president?
There’s an internal debate among your Above the Law editors about whether these green shoots we keep hearing about are real. I believe. Of course, I also believe that if I don’t clap very, very hard, Tinkerbell will die.
And I believe that there are signs that the legal economy is picking up as well. Check out the statement that incoming associates of Katten Muchin Rosenman received on Friday:
In March of this year, we made the difficult decision to defer start dates for our 2009 class of first-year associates until February 1, 2010, the beginning of our fiscal year. Since then, we are fortunate to have experienced an increase in demand for our legal services in a number of core practice areas that has enabled us to offer six of our deferred first-year associates the opportunity to begin their work at Katten this month, rather than waiting until February. These associates will practice in the areas of litigation and intellectual property and are spread across all firm offices.
We are so close to the end of the Vault open threads that I’m starting to get my second wind. I don’t know much about the firms on this part of the list, but you guys do. You know a lot. You’re so smart, you probably don’t even need this quick recap of the next group of firms. But I’ll go through it anyway:
Six impressive lawyers headline our survey of this week’s NYT wedding pages. Even more impressive is that four of them are still clinging to Biglaw jobs — assuming, of course, that bad news does not await any of our returning honeymooners.
Here are the finalists:
* AIG turned in the list of bonus recipients to New York’s Attorney General Andrew Cuomo yesterday–let the games begin. Just kidding, I too fear for the safety of heavily compensated AIG executives–there is nothing scarier than an angry progressive. [The Los Angeles Times]
* Dispensers of medical marijuana have room to breathe after Attorney General Eric Holder announced that federal authorities would cease raiding their operations. [The New York Times]
* Attorney General Eric Holder issued guidelines to federal agencies after The White House advised them to release their records to the public. [The Washington Post]
* A 3-judge federal appeals panel is considering whether or not to re-instate Madoff’s bail–springing him from jail until sentencing in June. [Newsday]
* Albert Hu, a Silicon Valley hedge fund manager conned clients by saying he was represented by prominent law firms like Heller Ehrman and Shaw Pittman; he was arrested in Hong Kong, and charged with defrauding millions from investors. [The National Law Journal]
* Another sad tale of an associate whose offer has been put on hold–his employer Latham & Watkins is asking incoming attorney’s to defer their start dates. [The National Law Journal]
A college graduate without student loan debt is akin to reading a kind quote about Kim Kardashian in a tabloid—it’s rare.
In the past eight years, student loan debt has nearly tripled to a whopping $1.1 trillion, and in the past 10 years, the percentage of 25-year-olds with such debt has risen from 25% to 43%
It’s gotten so bad, in fact, that New York Fed economists warned last month that the burden of student debt could stilt consumer spending by twentysomethings, as well as further hamper the recovery of the housing market and economy.
To get a better idea of what massive student loan debt (we’re talking over $100,000 massive) looks like, we talked to an attorney who graduated with a large student loan debt. We also consulted LearnVest Planning Services CFP® Katie Brewer to see just how their repayment plans stack up.
S. Fischer, 36, Attorney Graduated: 2001
How Much I Borrowed: $100,000
What I Still Owe: $45,000
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Ed. note: The Asia Chronicles column is authored by Kinney Recruiting. Kinney has made more placements of U.S. associates, counsels and partners in Asia than any other recruiting firm in each of the past six years. You can reach them by email: asia@kinneyrecruiting.com.
Deal flow has clearly picked recently up for most US associates, counsels and partners in Hong Kong/China and Singapore. We are on the phone with a lot of these folks on a daily basis, many of whom we have known for years. Further, the head of our Asia team, Evan Jowers, and Kinney’s founder and president, Robert Kinney, frequently meet in person with leading US partners in Asia to assess their needs and keep on top of the inside scoop at as many firms as possible. The need for legal recruiting help in Asia from experienced recruiters appears to be live and well. In March, Evan and Robert were in Beijing at such meetings, in April, Evan was in Hong Kong, and for half of June Evan will be in Shanghai and Hong Kong. Thus its pretty easy for us to tell when there has been an across-the-market pick up in capital markets and corporate work.
On an average day in Asia when Evan and Robert visit firms, they typically have 5 to 9 meetings a day, mostly with US partners in the market. The reason they have these meetings is not simply because Kinney makes a lot of US attorney placements in Asia and that a particular firm may have openings; instead these are just visits with friends. After years of working together as business partners, the folks at Kinney are actually these peoples’ friends. The firms Kinney work closely with in Asia (which is just about every law firm – call us if you want to know the one firm in the world we will never place anyone with again, ever, and why) look forward to the visits, or at least act like they do. After seven years in the market, many of the client partners are former associate candidates. Also, these US partners see Kinney as a very good source of market information as well, because they know how deep their contacts are in the market and how frequently they are speaking to counterparts at peer firms.
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It’s March and Katten Muchin is coming into it like a very meek lamb. The firm froze salaries in 2009. So far in 2010, it has sent a series of memos trying to explain why it can’t get its act together. A tipster reports:
