As super-big law firms suffer through the recession, many midsize and small firms are thriving. Back in June, we discussed these firms as a viable alternative to Biglaw. (A number of smaller firms — e.g., Stone & Magnanini, Silver Golub & Teitell, and McKool Smith — are even hiring, with the help of job postings on Above the Law.)
But are smaller firms all they’re cracked up to be? We try to present both sides of the story. Check out this letter, from the ATL mailbag:
I’m an Ivy League law grad with a couple of years in big law. I got laid off and eventually found a job at a smaller firm. Like, way smaller. Unsurprisingly, I know a couple of people to whom this has happened (and a couple who haven’t found jobs as well, of course).
The commonly held wisdom is that the trade off in big law is money for your time and soul, while smaller firms pay less, but ask less. I’m not finding this to be really true, and neither are my friends.
So what exactly are we talking about, in terms of hours and compensation at small firms?
Akerman Senterfitt is a Florida based firm, so — given the economy in Florida — it’s not all that surprising that the firm has decided to join the salary cutting party.
Multiple tipsters independently confirm that Akerman has instituted an across the board, 10% pay cut on all class years. Here is the internal email about the salary cuts obtained by Above the Law:
We are announcing today a 10% reduction in all associate salaries, effective immediately. This action is being taken in response to market conditions, which I know you are all aware of and which I need not belabor. I want to make it clear that our firm’s financial condition remains very strong, and even clearer as to how much we appreciate all your hard word and effort on behalf of the firm.
As previously announced, the associate bonus hours grid that we have used during the past few years has been eliminated. Instead, we will be carefully reviewing each associate’s performance at the end of this year as we consider paying merit-based discretionary bonuses to those meeting the established minimum qualitative and quantitative requirements.
As the email suggests, everybody is well aware of the terrible situation happening in the legal economy. But is the terrible economy forcing Akerman into this situation, or is the firm simply taking advantage of the difficult economic situation to roll back salaries?
After the jump, tipsters who have seen Akerman’s books claim that this is a salary cut of choice, not necessity.
Ed. note: Welcome to the latest installment of “Notes from the Breadline,” a column by a laid-off lawyer in New York. Prior columns are collected here. You can reach Roxana St. Thomas by email (at firstname.lastname@example.org), follow her on Twitter, or find her on Facebook.
At the Big Law Firm where we used to work, my friend Giovanna was the kind of associate that every partner dreams of. She spent nights and weekends at the office. She took on the most tedious tasks without complaining. She did the work of three people. She was conscientious. Sometimes, the partner for whom she worked would call her late at night, at home, with a frantic last-minute request for something that probably could have been done earlier in the day; Giovanna would turn around and go back to work to get it done.
Giovanna survived working for this partner for four years, but she did not survive the round of layoffs that eventually trimmed the herd at the Big Law Firm. In the months before she was “let go,” she had been certain that the figurative guillotine was poised above her waiting head. So, when she was summoned to the managing partner’s office to hear her fate, she said later, she was shocked, but not particularly surprised. She cried when she got the news, but then she gave them a piece of her mind and cleaned out her desk. A few days later, she left without looking back.
For the first few weeks, Giovanna and commiserated about life in the breadline. “I’ll never find a job!” she wailed, and threatened to cash in her 401(k). “Don’t do it,” I told her repeatedly, picturing her out on a ledge, cell phone in hand, ready to take a financially unwise leap.
“This is infuriating,” she said at one point. “No matter how many times I explain that more than 6000 people were laid off from firms, I swear people still look at me and think, ‘You suck, and that’s why you were let go.’ But AT&T lays off 50 people and it makes the CNN scroll and everyone empathizes.” I complained that Cliff didn’t understand that lawyers had emerged as the lepers of the new job market. She complained that her boyfriend, Tony, kept telling her to get a job at the local diner.
But Giovanna is one of the lucky ones. After a few weeks of unemployment, which we spend planning our eventual relocation to the shantytown which, she insists, is bound to spring up in Central Park, a former colleague passes her resume along to a friend of a friend and … before we know it, she has a new job.
Read about Giovanna’s new gig, after the jump.
Biglaw is suffering — big time. Meanwhile, many smaller and midsize law firms are doing just fine, even thriving. (A number of them — e.g., Silver Golub & Teitell, McKool Smith, and Stone & Magnanini — are expanding, with the help of job postings on Above the Law.)
These days, Am Law 200 firms are generally doing better than their Am Law 100 counterparts. This generally hasn’t been the case, at least in recent years. Industry observers are wondering: Is small beautiful?
That was one theme of Casting a Wider Net: The Rise of the Small to Mid-Sized Law Firm, another panel at yesterday’s conference, co-sponsored by the New York City Bar and Vault, entitled Getting Back in the Game: How to Restart Your Career in a Down Economy. (We wrote about an earlier panel here.)
The panel on small to midsize law firms consisted of:
ALLA ROYTBERG (moderator), Solo Practitioner, and Director, City Bar Small Law Firm Center;
Not all firms are cutting back on the perks. The Memphis Commercial Appeal has an enthused article today about the perks to be had at the small Tennessee firm of Burch, Porter & Johnson.
The article, “Legal firm helps its employees find essential balance,” talks about the firm’s AMAZING perks:
Something refreshing for body and soul is happening within the 119-year-old walls that house a venerable Memphis law firm.
Refreshing as a good yoga session. Strengthening as a brisk core-body workout. And uplifting as guest speakers whose work has made Memphis a better place.
Sweet. You can work out at work! And they friggin’ bring in guest speakers at lunch. Wow! Do they have as much free coffee as you can drink too?
If you thought firm life in Memphis couldn’t compare to Biglaw in the big city, think again:
That quest for balance explains why Leah Hillis strolled down the hallways on a recent lunch hour wearing workout clothes for a yoga session.
The associate attorney headed for the firm’s large, third-story storeroom overlooking Court Square… Other exercise classes to strengthen the core-body are Mondays and Fridays in the same unfinished space, which holds files of old cases, surplus furniture and cleaning supplies.
The classes are inexpensive: $4 for yoga and $3 for the core-body sessions.
Only $4 to work out in the storage closet!
If that’s not your cup of tea, you can spend lunch with a guest speaker during one of the firm’s “fireside chats” in the Crump Room. A recent speaker mentioned in the article is a Holocaust survivor. Fun times. Law and life: Legal firm helps its employees find essential balance [Memphis Commercial Appeal]
While Southeastern United States Senators are busy making the world safe for Toyota, Southeastern law firms are busy just trying to survive.
The latest bad news comes the 132-year-old law firm Womble Carlyle. The North Carolina based firm has decided to freeze salary increases for all attorneys through the first half of 2009 at least:
In these times, prudent management requires that we minimize our expenses in order to retain the flexibility that is necessary to deal with unforeseen developments. Accordingly, in addition to a variety of expense cuts that are included in the budget, we have decided not to increase base salaries for salaried attorneys and staff at the beginning of 2009. As we approach the midpoint of the year, we will review the situation and decide whether to provide any increases for the balance of the year. The only exceptions are those attorneys who become salaried members or of counsel on January 1, 2009.
I imagine that if you are a lawyer that relies heavily on the disaster area of the Charlotte banking market, just having a job is reward enough. You don’t want to be laid off in North Carolina right now. Womble Carlyle hopes to avoid that worst case scenario after the jump.
If the second-most profitable law firm in the nation cuts bonuses by 73%, what do you expect regional firms to do?
Today, the management committee at Epstein Becker & Green made a decision that we will probably be copied at regional firms throughout the country. From the EBG internal memo:
The cautiousness of the Firm’s clients regarding their cash position has continued to affect EBG’s cash collections through November. We, like all law firms in 2008, are experiencing a slower pace of payments to the Firm from our clients than in prior years. While we are confident that these monies will be collected over time and we are well positioned for 2009, cash available at year end is, as a consequence, more limited than it has been in years when the economy was stronger.
Reflecting this reality, and on our history of conservative but responsible fiscal management that dictates prudence in retaining our cash reserves and not incurring additional debt for non-capital expenses — thereby protecting the Firm’s position as we enter 2009 — the Compensation Committee has determined that no bonuses will be paid at year end 2008. While we do not make this decision lightly, at a time when many law firms and businesses are engaged in large-scale lay-offs or worse, this decision is, we believe, a moderate response to what are unprecedented circumstances facing our industry.
Remember that a problem many firms are facing right now is that while attorneys keep billing, some clients have stopped paying.
EBG is the first firm that we’re aware of that is offering the “special bonus” of zero. But they won’t be the last. Don’t forget to send us your tips on other mid-sized and regional firms as they make difficult bonus decisions this year.
Read the unabridged statement that EBG attorneys received today, after the jump.
As we previously reported, the fate of Tyler Cooper & Alcorn, one of Connecticut’s most venerable law firms, was up in the air for a while. There were rumors of dissolution, but managing partner William Fish told ATL that the firm was merely in merger talks.
It seems that those talks have borne fruit. Over the past week, we started receiving many emails from Connecticut tipsters about Tyler Cooper. (We had no idea we had such a fan base in Connecticut.)
Here’s one of them:
Tyler Cooper’s collapse (reported last month here) is now official. A number of partners and associates are leaving Tyler Cooper to join LeClairRyan, a growing national law firm. The change will come later this month. The partners just started notifying friends and clients….
They will take over the space of Tyler Cooper in New Haven. No word on whether Tyler Cooper will even still exist, but the fact that LeClair Ryan will have the same mailing address as the former Tyler Cooper can’t be a good sign.
We reached out to both firms yesterday. Tyler Cooper did not get back to us. LeClair Ryan partner David I. Greenberg responded: “It is our Firm’s policy not to confirm or deny rumors related to lateral hires.”
But another firm that’s scooping up Tyler Cooper attorneys was willing to comment. Read more after the jump.
This sign captures the flavor of the past week in law firm news, including the massive layoffs at Cadwalader and the office closings at Akin Gump. If you have other tips for us, send them to us here.
The law firm pain is starting to be felt even by those still in law school. We’ve been forwarded various emails announcing that some firms or offices have canceled on-campus interviews for 2009 prospective summer associates, including the New York office of Dorsey & Whitney, the Chicago office of Midwestern firm Barnes & Thornburg, and, as we reported on Wednesday, Cadwalader (at certain law schools, e.g., Rutgers – Newark). Here are excerpts from the notices:
From John Marshall Law School:
I received notice from the head of recruiting at Barnes & Thornburg that the firm will not be having a summer program in its Chicago office next summer. Therefore, the OCI option for that firm has been removed from Symplicity.
From Columbia Law School:
The New York office of Dorsey & Whitney LLP will no longer be interviewing at EIP (ed. note: Early Interview Program) as they have decided not to have a formal summer associate program in 2009.
From Rutgers Law School:
Also, please note that Cadwalader, Wickersham & Taft LLP, scheduled to interview on campus on August 13th, has had to cancel and will contact students independently to schedule interviews if they are selected.
We expected large law firms to power on with their summer associate programs, so we were somewhat surprised to hear that Dorsey & Whitney is suspending its program in New York. Then again, it was a rather small program — about five summer associates in 2007, per the firm’s NALP form (PDF). A Dorsey spokesperson had this comment:
It is true that the New York office of Dorsey & Whitney will not sponsor a formal summer associate program in 2009. We have made this decision based upon our hiring needs in the New York office at this time. This decision with respect to the New York office summer associate program does not preclude the possibility of hiring an incoming class for 2010 in our New York office. The firm’s other offices that have traditionally sponsored summer associate programs will continue to do so.
Have other firms canceled their OCIs at your school? Please let us know in the comments, including your school, the firm, and the firm office.
See full notices from firms regarding OCI cancellation, 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@example.com.
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When Chintan Panchal decided to leave a global BigLaw partnership to start his own firm, he could only hope that he would face the high-quality problem of firm building that many had cautioned him about. Focused on the uncertainty surrounding of a new firm launch, he decided to tackle staffing needs, IT challenges, and financial planning requirements after he had built up his legal practice.
Panchal Associates LLP–a corporate/finance and outside general counsel boutique–was quickly off to a great start. Clients and matters were flying in the door, and Chintan soon had a team of lawyers and staff with a variety of operational needs. To continue building an excellent team and provide them with a competitive benefits package, to expand his physical presence to include a European practice and additional partners, and to scale his operations and IT capabilities to support this growing enterprise brought with it demands of time, money, and expertise. Chintan knew he needed help.
“With the assistance of NexFirm, we have upgraded the capabilities of our firm to meet, and in some cases exceed, the standards we were used to at our former BigLaw firms. Operationally, we can now attract and service clients we didn’t have the bandwidth to support in the past, and continue to build our team with the best and brightest legal talent in the industry,” said Chintan Panchal, adding “It has worked out quite well in our case; NexFirm is an essential partner for us.”
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