In July, Morgan Lewis & Bockius announced that it would be ending lockstep compensation for its associates in 2010. At the time, the firm furnished this statement to Above the Law:

“We’re running our own business and focusing relentlessly on client relationships,” said Francis M. Milone, Chair of the Firm. “Doing so responsibly means continuing to reduce expenses, committing to the people in whom we are already invested, and looking at compensation across the board to ensure our structure matches the reality the entire legal industry must face.”

The July announcement was the culmination of the effort made by MLB and its chairman, Francis Malone, to reform the Biglaw business model. Back in April, Milone gave an interesting interview to the Philadelphia Inquirer:

Question: Law firms are still very profitable. Why do they need to downsize?

Answer: You have to make a judgment about whether you can keep people busy going forward. It is not healthy for a lawyer to not be busy, to have free time on his or her hands. You don’t grow, you don’t develop, you’re not happy.

And from a cultural perspective, you don’t want to build a firm that culturally is populated by a lot of people, or too many people, who don’t have enough to do.

Q: Is that the only reason?

A: The other piece of it is the feedback we got from clients. Because they’re looking at the way they want law firms to act. They’re not going to be as willing to pay, frankly, to train new lawyers. So it’s going to be harder to find things for new lawyers to do. And when we’re paying new lawyers $160,000 and clients don’t want to pay for them, you’re putting them in a position where there may not be a lot of things for them to do.

Well, 2010 is almost upon us. But MLB is suddenly not so excited about ending lockstep compensation. Milone conducted a firm-wide video conference yesterday, and tipsters report his enthusiasm for ending lockstep compensation was noticeably lacking.

Details and a statement from the firm, after the jump.

We’re now into the back half of the brand new Vault law firm rankings. Just like last year, we worry about a proliferation of “TTT” accusations in the comment threads. But such terms of art can miss the positives of many of the firms in this section of the Vault rankings. Here’s the list:

51. Fulbright & Jaworski
52. Wilson Sonsini Goodrich & Rosati
53. Morgan Lewis & Bockius
54. McDermott Will & Emery
55. Alston & Bird
56. Bingham McCutchen
57. Fish & Richardson
58. Dechert
59. Greenberg Traurig
60. Cadwalader Wickersham & Taft

We have already extensively talked about the Morgan Lewis situation. Let’s move on to other firms after the jump.

Morgan Lewis & Bockius has finally come clean about its offer rates to its 2009 summer class. The numbers are not pretty. The Legal Intelligencer reports:

Now that the firm has finished informing summer associates of their status and has made a firmwide announcement Tuesday morning regarding the decisions, Morgan Lewis has provided more concrete numbers when it comes to offer rates.

Firmwide hiring partner Eric Kraeutler said there were 102 eligible 2Ls across the country in this year’s summer program. Of that group, 28, or 27.5 percent, were given offers to start as first-year associates in the fall of 2011 — a year later than would normally be the case given the deferrals of the 2009 first-year class until the fall of 2010.

Last week we reported that MLB would be “extend[ing] only a limited number of offers.” The Morgan Lewis offer rate is certainly limited, but the numbers are much lower than what we’ve seen so far from peer firms.

And remember that Morgan Lewis has already canceled its 2010 summer program. So if the firm needs any more fresh talent over the next couple of years, it will have to be successful in the lateral market. That might be hard to do if the firm slashes base pay as it moves to a “performance based” compensation model.

After the jump, let’s take a look at offer rates in specific offices.

Ed. Note: This post has been updated (as reflected in the edited title). Please keep reading.

The offer calls for Morgan, Lewis & Bockius went out today, and associates who summered with the firm’s Washington office are receiving some especially difficult news: zero offers.

Update: Morgan Lewis responded with this statement:

Rumors you reported of zero offers in DC are false. We are giving offers in every large office of the firm. Due to the difficulty of predicting 2011 staffing needs, we have today extended only a limited number of offers. To assist those who have not received offers in seeking other opportunities, we will provide a letter to prospective employers that explains the circumstances surrounding our summer program, in the hopes that as these students enter the legal profession, they will be able to obtain employment opportunities commensurate with their qualifications and performance.

The firm refused to elaborate on just how many offers constitute the “limited number of offers” the firm extended. Above the Law has independently confirmed a report of one (1) offer extended at Morgan Lewis in D.C. Is there anybody else? Feel free to email us.

Multiple tipsters from D.C. are reporting phone calls like this one:

They just called. They’re not giving offers this year. They’re re-evaluating next fall for hiring needs for the following year and writing the summers a letter explaining that they were awesome. … [T]he head recruiter honestly sounded like she had been crying … Apparently they’re going to “stay in touch” over the next year to see what’s going on.

According to NALP, Morgan Lewis expected 17 2L summers and 2 1L summers for their 2009 summer program in D.C.

We are still collecting information about Morgan Lewis’s firm-wide offer rate. More details, plus an update from Philadelphia, after the jump.

A month and a half ago, Morgan Lewis announced that it was canceling its 2010 summer program and moving away from lockstep compensation. At the time, some people criticized me for looking at a move away from lockstep compensation as tantamount to a salary cut.

A firm could move away from lockstep to give its associates a larger share of the profits they generate. Is that what Morgan Lewis is thinking?

Morgan Lewis is in the process of holding a series of meetings with associates in various offices. The goal is to let the associates know what the firm is planning to do with salaries starting January 1, 2010.

According to a firm spokesperson, these meetings are preliminary in nature:

As our Chair announced earlier this year, we have decided to move away from lockstep to a performance-based evaluation and compensation model. We are still in the process of developing the new model and are meeting with associates around the firm to solicit their input. We have not yet determined or announced any specific terms of the model, so any reports regarding compensation cuts at this point are pure speculation and false rumor.

Associates who have been in these meetings have a different take on what’s going on.

Based on a Washington Post article profiling the Five O’Clock Club, an outplacement and career coaching company, we constructed a Biglaw blind item:

Which New York law firm, having already completed two rounds of layoffs, has hired the Five O’Clock Club to help it carry out additional layoffs (in August, October, and November)?

After we ran the item, several firms came forward to declare they’re not the firm in question. And now they’re joined by one more: Morgan, Lewis & Bockius.

A spokesperson for Morgan Lewis contacted ATL to say that it isn’t the firm with layoffs in the works. In fact, Morgan Lewis claims that it shouldn’t even be on the shortlist of contenders.

Read why — and check out the list of the Five O’Clock Club’s clients, including some very prestigious law firms that haven’t publicly admitted to layoffs — after the jump.

We are living in a bizzaro world. Check out this fact pattern:

There’s a partner at Morgan Lewis with 18 years of experience. Morgan Lewis cancels its entire 2010 Summer Program. Partner leaves Morgan Lewis. For a more lucrative gig? No. He leaves to be the new head of career services at UVA Law School.

UVA Law has just hired Kevin Donovan, a former litigation partner at Morgan Lewis.

First of all, who leaves a partnership for a career services gig?

Secondly, the irony of a partner at a firm that just refused to hire rising 2Ls being in charge of finding jobs for rising 2Ls is rich. Is this some kind of twisted Marshal Plan? First you bomb it, then you build it?

After the jump, let’s take a look at Mr. Donovan’s qualifications and vision for UVA law students.

Morgan Lewis Chairman Fran Milone just finished a video conference with all associates and staff at Morgan, Lewis & Bockius. And he unleashed some big news. Morgan Lewis is making some major changes in response to the continuing economic recession. Here are the top bullet points:

* Eliminating lockstep compensation for 2010.

* Canceling on-campus interviewing during the fall of 2009.

* Canceling the 2010 Summer Associate Program.

* Pushing back the start dates of current summer associates to 2011.

The firm has already communicated their decision to law schools who had expected to host MLB interviewers this fall.

After the jump, Mr. Milone offers a brief statement about these decisions.

* California lawyer Ryan Kent has accused Dahn Yoga of being a cult and filed a class action suit against the Brain Wave Vibrators. [San Francisco Chronicle]

* Ross Mitchell spent just $38,000 on his online law degree and became his own first client. He won his lawsuit to be admitted to the Massachusetts Bar. [Boston Herald]

* Richard Posner is bearish on newspapers and bullish on draconian copyright protection for online news. Permission to link? [The Becker-Posner Blog]

* Is 12 years enough for Bernie? [Am Law Daily]

* Law school is great preparation for doing something other than law. [Legal Intelligencer]

* Musical chairs: Morgan Lewis taps gas from Baker Botts. [Am Law Daily]

Wait, there are people out there who want banking lawyers? Really? This is excellent news!

Morgan Lewis & Bockius announced today that it has acquired eleven people: five partners and six associates, from Bingham McCutchen’s Boston office. But the real shocker is that all of the lawyers are from Bingham’s Banking and Leveraged Finance Group:

Morgan Lewis today announced the addition of five partners and six associates from Bingham McCutchen’s Banking and Leveraged Finance Group—including a former co-chair of the practice—to its Business and Finance Practice, resident in the firm’s Boston office. Partners Robert A.J. Barry, Jonathan K. Bernstein, Sula R. Fiszman, Matthew F. Furlong, and Sandra J. Vrejan, will focus their practice on corporate finance, as well as restructuring. Their experience across a broad range of industries—including retail, manufacturing, food and beverage, energy, media, communications and sports—add to the depth of knowledge Morgan Lewis offers clients as they face today’s rapidly changing economic conditions. In addition, their arrival significantly increases the firm’s presence in Boston.

Isn’t it great to live in a world where law firms need corporate finance lawyers?

“Particularly in light of the difficult credit markets faced by both our lender and borrower clients, there is an ever-increasing need for us to be able to provide additional top-flight financing expertise across a multitude of industries” said Firm Chair Francis M. Milone. “This expansion reflects our continued commitment to providing clients with the kind of counsel they need to execute credit transactions in any business environment.”

It seems right to focus on “any” business environment, considering that the politicians seem to be making it up as they go along.

A statement from Bingham and the the Morgan Lewis press release after the jump.

* Harvard 3L Juan Valdivieso talks about his plans for his Morgan Lewis $60K deferral stipend. [Boston Globe]

* Copyright attorney Jo Oliver on the impact the Pirate Bay ruling will have on the legal war on piracy. She has no sympathy for “Internet freedom fighters.” [Reuters]

* … Meanwhile, the Pirate Bay folks are appealing the ruling against them alleging that the judge was biased. He’s a card-wielding member of two pro-copyright organizations. [CNet]

* O’Melveny & Myers partner Alejandro Mayorkas has been tapped to be the director of DHS’s Citizenship and Immigration Services. [Chicago Sun-Times]

* We don’t really know what the point of Twitter is, but it’s probably not to issue death threats. Oklahoma man arrested for tweeting about turning the April 15 Tea Party into a blood bath. [Threat Level/Wired]

* Sex, Second Life, and virtual law. [San Franciso Chronicle]

* PSA: Wash your hands frequently, folks. [New York Times]

Today’s evidence that the Biglaw paradigm is crumbling comes from the clients of Morgan Lewis & Bockius. The ABA Journal reports:

Among the sea changes is a reluctance by a number of clients, or even an outright ban, as far having first-year associates work on their matters, says [Morgan Lewis Chairman Francis] Milone in a wide-ranging interview with the Philadelphia Inquirer.

“It’s a trend,” he tells the newspaper. “We literally have some clients who are telling us they do not want us to put brand-new associates on their matters.”

On the one hand, you can take that comment with heavy dose of cynicism. It’s exactly the kind of thing a managing partner would say if he was laying the groundwork for an associate salary cut. For a more full example of how to cut salaries by making associates feel generally useless, check out Womble Carlyle.

After the jump, we see there are even more reasons to be skeptical about chairman Milone’s motives.

* Obama plans to begin pushing for an immigration bill this year. [Reuters]

* Need a job? Meet Katherine Wu, an executive at NBC universal who calls herself a “networking evangelist.” [The New York Times]

* The Office of Congressional Ethics is investigating Rep. Jesse Jackson Jr. because of last year’s allegations that he may have been one of the candidates willing to buy the Illinois Senate seat. Please go on a media blitz, Jesse, please! (I just like writing “Blago” in my posts) [The Washington Post]

* The City of Detroit’s former top lawyer sued the city, claiming that she was illegally demoted for calling the 36th District Court a “ghetto court.” [The Detroit Free Press]

* Yesterday, Vermont became the fourth state to legalize gay marriage. [The Boston Globe]

* Former White House Counsel Fred Fielding is joining Morgan, Lewis & Bockius, as a litigation partner. [The BLT: The Blog of Legal Times]

* As he dismissed the conviction of former senator Ted Stevens, a federal judge appointed a lawyer to investigate the prosecutors’ alleged misconduct. [The Washington Post]

* Citing frustrations with “shrinking compensation” in banking, former UBS banker Lewis Steinberg will join Linklaters in June. [The Am Law Daily]

* “An internet poker site agreed to pay the U.S. $105 million to settle charges that it illegally offered gambling to players in the United States.” [The Washington Post]

* “The Supreme Court will decide whether a judge can award more money to winning lawyers because the judge thought they did a good job. [The Associated Press]

* As the Obama administration prepares to crack down on work-place laws—U.S. businesses are seeking legal counsel. For some lawyers that means money honey. [The Wall Street Journal]

For those of you that have read the comments on the Morgan Lewis layoff post, you already know that MLB is mandating a deferral program for all of its incoming first year associates. We wanted to dedicate a separate post to discuss this plan, as it is very different from what we’ve seen from Latham & Watkins or Orrick.

Here’s how Morgan Lewis characterizes its deferral plan:

Today, we are taking a number of steps to adjust our workforce in light of changed economic circumstances. Among other things, we have decided to defer the start dates for new associates so that incoming entry-level associates will start with us in October 2010. We will offer each affected individual the opportunity to work in a public interest organization between October 2009 and his or her start date, and will pay each a $5,000 monthly stipend.

Unlike Latham or Orrick, this plan is not optional. All incoming first years have to take this plan. Because the plan is mandatory, MLB is in the position where they will have no 2009 first year attorneys. But the firm will save at least $100K on every first year associate they hired.

I say “at least” because obviously not every associate will receive the $60,000 that is contemplated in this memo. The memo clearly states that the monthly stipend will be paid only to associates who secure work at a public interest organization, and even then on a month to month basis. Latham, in contrast, will be giving $75K to incoming first years up-front. (We do assume that the deferral plan includes a “bar stipend” which would bring MLB’s total package closer in line to Latham and Orrick. The memo doesn’t say that specifically though, so we are making an assumption.)

It’s not out of the realm of possibility that some people won’t be able to secure a public interest job by October 2009 (there is not an infinite supply of public interest work). If you don’t get a job until January, you’re not getting a stipend until January, allowing the firm to save even more money.

After the jump, we see that Morgan Lewis expects the tough times to continue right through 2010.

This one even caught us by surprise. We had received some indication that Morgan Lewis was finished with its layoffs, but apparently the reductions earlier this year were just the beginning. A firm wide memo announced the sad news to MLB employees a short while ago.

Unfortunately, we have reached the point where we believe that the greatest good for the greatest number of our colleagues will be achieved by eliminating some positions and bringing our overall numbers more in line with the realities of the present economic environment and what we believe will be the expectations of our clients in the future. Therefore, we will be informing today a number of our attorneys and members of our staff throughout the firm that their employment will end. We expect to inform those of you who are being affected by this decision as early as possible today, at which time we will also discuss with you certain available termination benefits.

The memo goes on to list the damage: 55 attorneys and 161 staffers. The memo makes no mention of the severance package that is going to be offered to the ex-MLB people.

It is not going to be a happy Monday.

Read the full memo after the jump.

We have been waiting a long time to get a look at the Morgan Lewis & Bockius bonus structure. The firm announced way back on October 30th that it would be delaying their bonus decision until the market settles.

Since then, the firm has found time to institute a salary freeze and fire maybe as many as 50 associates.

Now that the bonus information is finally in, the results are somewhat anticlimactic. Individual memos are out at Half-Skadden levels.

But the real news from MLB is contained in this little memo that went out on Friday night:

Most of counsel and associates have had discussions by now with respect to annual evaluations, so this is a good time to remind lawyers of our policy with respect to taking late time-recording into account when we determine bonus amounts. For the year just ended, there were 55 lawyers whose bonuses were affected by their unexcused late time entries. The impact was larger for repeat offenders.

Ouch. I supposed this is a “good time” to remind lawyers about how late time keeping can affect the year end bonus. Let’s hope that Morgan Lewis also reminded people at the much, much better time — which would have been before people lost money for being tardy with accounting.

Tipsters weigh in and the full Morgan Lewis email after the jump.

We are now receiving reports that Morgan, Lewis & Bockius fired a large number of associates. A firm spokesperson tells us:

Attorneys depart law firms for any number of reasons. The number leaving this year is consistent with prior year departures. It is inappropriate for us to comment on individual personnel decisions. However, reports of a firm wide layoff are incorrect.

But tipsters at the firm have gotten a different impression about what is happening at Morgan Lewis:

I believe the total number will be around 50 attorneys. I do not know the number of staff members but I did see at least two secretaries crying on the way out.

Other tipsters also say that 50 or so associates and an undetermined number of staffers will be let go. Then again, our sources also suggest that the 50 have been concentrated in the corporate department, so maybe the layoffs aren’t “firm wide.”

Severance information and other Morgan Lewis notes after the jump.

Thanks to the power of “the internet,” I’m able to remind you that in October the law firm Morgan, Lewis & Bockius informed associates:

As in past years, base compensation adjustments will continue to be effective as of January 1 and will be reflected in your January paycheck.

In fact, I reminded you just last week that Morgan Lewis previously stated:

As in past years, base compensation adjustments will continue to be effective as of January 1 and will be reflected in your January paycheck.

But yesterday, Morgan Lewis decided:

We have taken a number of steps to manage our business conservatively. One of these is a decision to maintain of counsel and associate base salaries for 2009 at the same levels as those individual lawyers were paid for 2008.

In response to the question “how do you feel about this,” a morning tipster said:

I feel like I hate these lying f****** s***eat*** f***s.

Agent Kujan, meet Keyser Soze.

Read the full MLB memo after the jump.

Back in October, we reported that Morgan Lewis & Bockius was one of the first firms to say anything about associate bonuses. The firm said it wasn’t going to make a decision about associate bonuses until sometime in January of 2009, but at least they said something.

Notably, at the time the firm also reported:

As in past years, base compensation adjustments will continue to be effective as of January 1 and will be reflected in your January paycheck.

We now know that the announcement was a much bigger deal than it seemed at the time.

Morgan Lewis has still not announced what they plan to do with 2008 bonuses, but the firm has announced that 2009 bonuses decisions will be made on a different basis. Instead of a 2000 hour requirement in effect for 2008, in 2009 associates will not be required to reach 2000 hours.

But on the other hand, hitting 2000 hours will no longer “guarantee” a full bonus.

Read the firm’s specific wording after the jump.