Today’s firm-wide meeting at McKee Nelson did not yield good news. A statement from the firm reveals the extent of the bloodletting:
This morning, McKee Nelson LLP laid off 17 of its corporate/finance associates, reducing this practice from 94 to 77 attorneys. The layoffs are concentrated in the MBS, ABS and CDO parts of our capital markets practice.
Our firm also laid off 15 administrative staff. All of the affected attorneys and staff members are in good standing at the firm. None of these layoffs are performance based.
At least the firm was honest about the reason for the layoffs. No stealth layoff / performance review rhetoric from the firm partners:
For the past 16 months, the partners of this firm have been committed to bearing the costs of the overcapacity in our structured finance group in order to keep our team intact. The devastation that befell the credit markets in September, however, was unprecedented. We have analyzed and created a projection of what we believe the structured finance business will look like over the next two years and what resources, capabilities and experience will be required to do that work. This layoff is a necessary part of the firm’s adjustment to this new reality.
Is something going down at McKee Nelson today? A tipster reports that there is a surprise, all-attorney video conference scheduled for 1:30 today.
Managing partner William Nelson announced the meeting succinctly via firm-wide email this morning:
There will be an all attorney meeting at 1:30PM.
Recently, these mystery meetings have been held to release good news. In September, Covington & Burling held a surprise meeting to announce the acquisition of Heller Ehrman’s IP department (admittedly, that was not good news for Heller Ehrman). Last month, Jenner & Block held one to reassure associates (shortly before a number of partners were let go).
Okay… so these meetings aren’t always “good news,” but they have been “good spin.”
What does the future hold for McKee Nelson? Well, one of their biggest clients is JPMorgan Chase, one of the only banks left standing. Things can’t be too bad, right?
We’ll let you know where the chips fall.
Update (2:15): McKee Nelson confirmed that they laid off 17 associates and 15 staffers today. Read additional coverage here.
In what could be a trend, DLA Piper has canceled the holiday party for their Chicago office. The move is similar to Fried Frank’s decision to scrap their holiday festivities, but there is no indication on whether DLA intends to donate any of their party money to charity (as Fried Frank did).
Spokespeople for DLA Piper did not immediately respond to a request for comment.
It’s not just the legal community that’s scaling back on holiday cheer. Yesterday, Barclays announced they were canceling their holiday party too. For a complete list of the financial firms that have gone Grinch, see our sister site, Dealbreaker.
The holiday party is just one notch on the ever tighter belt. More after the break.
Bell Boyd & Lloyd managing partner Nancy Bertoglio has confirmed the layoffs we reported earlier today. She stated that 10 associates were laid off today:
Like many firms, Bell Boyd is facing unprecedented market conditions and we are taking measures to ensure the firm’s efficient operation and growth. Today regrettably, Management, in individual meetings with associates, asked 10 to leave effective January 1, 2009. The associates affected were representative of practices across the firm, and none were first year associates. All are in the Chicago office. This is a belt-tightening measure that will put us in a better position to ride out the economic storm and remain competitive in what we expect will be a challenging business environment for law firms and our clients.
At least the firm didn’t throw mud on the associates on the way out of the door. This message makes it clear that the layoffs were done for economic reasons, not because the 10 associates were “under performing” in some way.
Good luck to the most recent additions to the job hunting community.
The Chicago market is really tough these days. In the past month, 21 associates lost their jobs with Katten, 25 associates were laid off from Sonneschein, and Jenner Block parted ways with 10 partners.
A tipster tells us that Bell Boyd’s Chicago office could be the next firm to suffer the layoff bug:
18 fired this morning, some 1st years, some 4th and 5th years. Firm wide meeting at noon central
We have contacted the firm, but they have not yet responded.
We will update you as soon as we can confirm or deny this report.
Update (3:03): Bell Boyd has confirmed 10 associate layoffs. Please see here for additional coverage.
Thelen has officially announced they will dissolve.
According to the release, Thelen:
[B]reached a partner departure covenant that restricts the number of partners who may depart the firm within any twelve month period.
In other words, the bank pulled Thelen’s line of credit, much like they said was not going to happen.
Most disturbingly, Thelen apparently does not think it is obligated under federal regulations:
Although not necessarily required, Thelen is seeking to pay its employees 60 days salary under federal and state WARN Acts. The firm is also seeking to pay all accrued vacation pay. The response to date from the bank is that it will fund employee salary through Nov. 30, but will not pay accrued vacation pay. Both of these issues are still under discussion.
We’ll see how that flies in court, which is undoubtedly where this will end up.
This summer, the firm had to deny a rumor of possible dissolution. The word is that the firm took an especially tough beating when the bottom fell out of the housing and credit markets. In September, just a week after Lehman Brothers collapsed, we reported that Thacher Proffitt was looking for a white knight to save them (King & Spalding).
Today brings word that Thacher Protfitt abruptly closed their office in White Plains, New York. The firm declined to comment on the closing, but this picture was on the door of the firm’s (former) White Plains office (thumbnail image; click to enlarge):
A tipster reports:
Presently, there are no attorneys or support staff anywhere in the office — just boxes, empty ones being filled, and filled ones being shipped out.
Update: Back in April, we passed along a rumor that the White Plains office would be closing. The firm denied this, but the closing has now come to pass.
More bad news, this time from the Los Angeles market.
We’ve received word that O’Melveny & Myers has cut ties with five associates from their L.A. office. A tipster reports:
There were at least 5 associates let go today in the OMM Los Angeles office. Ranging from first years to mid-level associates. I’m not sure if they are being called performance related or if they are admitting they are layoffs.
OMM is calling them performance related. A firm spokesperson told us:
There have been no economic layoffs of associates at O’Melveny & Myers and there are no plans to conduct such layoffs. We are in the midst of our annual associate evaluation process, which began as scheduled in September, and some associates, as is always the case, are receiving less than satisfactory performance reviews.
Apparently, Dechert Chairman and CEO Bart Winokur still finds Above the Law not worth his time, but that hasn’t stopped him from talking about our information elsewhere.
Winokur spoke with the WSJ Law Blog to try to clear up some things about the firm:
1. Quite apart from any characterization as to reasons why associates might have been asked to leave and contrary to anonymous posts in abovethelaw.com, there were not 10, let alone 30, associates who were asked to leave in July with or without deadline.
2. Contrary to the implication in The Legal Intelligencer article, I do not believe that we are replacing “people with better people.” To clarify what I said to The Legal Intelligencer, as associates get more senior, they need to keep doing higher and higher levels of work, and not work that can be done by their juniors.
3. Additionally, in response to the slowdown in our structured finance practice, rather than lay-off associates, we assigned associates to full-time pro bono work, where they could continue to hone their legal skills while at the same time helping others. When the economy stabilizes and business picks up, it is our expectation that they will be part of the firm’s vibrant practices.
Readers have demanded more information about the so-called “stealth layoffs” at Dechert. Finally, we have additional information to report.
Readers, commenters, tipsters, recruiters, employees, and the Virgin Mary who appeared to me in a breakfast grapefruit are all reporting that a number of associates will be laid off at the end of this month. These layoffs have nothing to do with the March departures from the firm, and contradict the firm’s official statements on the matter.
As best we can tell, no less than 10 and no more than 30 associates were told at the end of July that they would be laid off in 3 months. According to one tipster:
Effectively we were told that we can come in to work, but do not have to, and we can tell the recruiters and places where we interview that we still have a job at Dechert. Now, at the end of the three months our salaries would stop coming. These three months was our severance. At the same time the partners did absolutely nothing to help us locate jobs because most were too afraid to do anything.
As many of you know, Gina Passarella of the Legal Intelligencer was able to speak at length (free version) with Dechert Chairman Bart Winokur. Mr. Winokur declined to speak with ATL directly, but in the Intelligencer article he does not really deny that associates were asked to “move on” in this manner. Instead, the Intelligencer reports:
“In my view, layoffs are when you decide to cut head count,” Winokur said. “It’s not when you decide to replace people with better people.”
Winokur said the culture of the firm is to improve year over year and when people reach a point of seniority and still aren’t getting better, the firm will sometimes tell them they don’t have a future at Dechert.
Whatever advantages there are to stealth layoffs are pretty much destroyed when your firm chairman starts talking about replacing people “with better people.” People we’ve talked to have emphasized that the firm is doing nothing to help associates put on notice find new jobs.
Even if you look at all of the evidence in the light least favorable to the firm, it doesn’t look like the number of July/October layoffs rise to the level that has been mentioned by some of our commenters.
But, there might be some other stealth moves going on. Read more after the jump.
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: [email protected].
Since late last year, things have been booming in Hong Kong / China in cap markets, especially Hong Kong IPOs. M&A deal flow has recently been getting a bit stronger as well. Although one can’t predict such things with any certainty, all signs are pointing to a banner entire 2014 for the top end US corporate and cap markets practices in Hong Kong / China. This is not really new news, as its been the feeling most in the market have had for a few months now and things continue to look good.
The head of our Asia practice, Evan Jowers, has been in Hong Kong for about 10 days a month (with trips every other month to both Shanghai and Bejing) for the past 7 months (Robert Kinney and Evan Jowers will be in Hong Kong again March 15 to 23), and spending most of his time there meeting with senior US hiring partners at just about all the major US and UK firms there, as well as prospective candidates at all associate levels and partner levels, and when in the US, Evan works Asia hours and is regularly on the phone with such persons, as our the other members of our Asia team. Our Yuliya Vinokurova is in Hong Kong every other month and Robert is there about 5 times a year as well. While we have a solid Asia team of recruiters, Evan Jowers will spend at least some time with all of our candidates for Asia position. We have had long standing relationships, and good friendships in some cases, with hiring partners and other senior US partners in Asia for 8 years now.
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Everyone is talking about the importance of Social Media in Corporate America. But it is relatively safe to say that most law firms and lawyers are slightly behind the social curve. Most lawyers, at minimum, use LinkedIn, for networking. Some even use Twitter for pushing out short, pithy content, while many have Blogs, where they write their little hearts out. The adage “it is better to give than to receive” is not always true though in the world of Social. In the Social World – it is best to listen, give back and engage.
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