Back in February, Nixon Peabody laid off 56 employees. The firm was public about its decision to lay off people at the time.

But sources report that over the past few months Nixon has been conducting additional layoffs — only this time the firm is being very stealthy about the departures. Multiple sources state that the firm casts these reductions as performance-based, but the performance issues are simply low hours during the recession. One tipster puts it like this:

[S]tealth layoffs of associates are happening in a number of different including San Francisco … and D.C. A number of second and third years (since we have no first years yet) have been told to pack their bags. They are being called performance-based though the associates who have been let go have low hours because of lack of work. … Associates are terrified to report to work [lest] they get a call from human resources.

We also have reports of stealth layoffs in New York. And still other tipsters tell us that junior partners are being forced out as well.

This time, Nixon Peabody declined to comment about the layoffs.

But after the jump, we have information that might explain why Nixon is going the stealth route with these cuts.

As we get back to the Vault rankings, we encounter more firms that have engaged in stealth layoffs. And a firm that conducts mass transit layoffs.

To refresh your memory, here’s the next group:

61. Cooley Godward
62. Pillsbury
63. Sonnenschein
64. Cahill
65. Holland & Knight
66. K&L Gates
67. Nixon Peabody
68. Foley & Lardner
69. Kaye Scholer
70. Steptoe & Johnson

The penalty for having a partner announce layoffs on a train was six spots according to Vault. There have been other Pillsbury cutbacks. But the Acela incident happened when associates had Vault surveys sitting on their desks.

After the jump, let’s take a look at some of the other firms in this group.

The National Law Journal reports that some firms are hiring lawyers — including associates — in Chicago. The ABA Journal summarizes the good news:

Three law firms are moving into new offices in Chicago and seeking to fill the space with new lawyers.

The firms getting new digs are Skadden, Arps, Slate, Meagher & Flom; Nixon Peabody; and Cozen O’Connor, the National Law Journal reports.

Happy Friday indeed.

According to the NLJ, despite all the hits the Chicago legal market has taken during this recession, the city is in an expansionary mood:

While law firm expansion has slowed in Chicago during the recession, particularly compared to the accelerated growth in the prior five years, many national firms that set up shop in the city since 2000 are still looking to add lawyers. Efforts to recruit partners with business has been a constant, but firms in the past month have started to look for associates in certain practice areas, including finance, banking, litigation and bankruptcy, said Amy McCormack, who leads the Chicago recruiting firm McCormack Schreiber.

Does that include Kirkland & Ellis? Let’s take a look inside (its new offices), after the jump.

When we reported on the salary cuts at Nixon Peabody, we mentioned that the firm would allow associates to make up some of the money come bonus time. Here’s how the firm explained the opportunity:

With our new levels of base pay in place, we will be introducing a bonus program that offers the potential of up to 30% of base pay based on firm and individual performance. We believe this innovative pay structure will reward our highest performing associates while lowering total compensation for those who perform at lower levels.

We’ve gotten a look at Nixon’s proposed “up to 30%” bonus structure. This hasn’t been finalized, but here is what is going around the office:

Let’s break this down, after the jump.

Last Monday, we reported that Nixon Peabody would be cutting salaries. We noted that the pay cuts would be reflected in the May 21st paycheck.

Over the weekend, a source sent us detailed salary information about all of Nixon’s offices. Is this the shape of things to come? According to our tipster, here’s the new first year pay scale:

* $145,000 in NYC, Boston, Chicago, DC and California; ($20k cut)
* $95,000 in Upstate NY, Manchester, Providence ($10k cut)
* $110,000 on Long Island ($10k cut)

These new salaries will also be applied to Nixon Peabody summer associates.

But after the jump, we check out the cuts further up the pay scale.

More bad news for associates that A) enjoyed making a top of the market salary, or B) think lockstep compensation is a good idea. Nixon Peabody has joined the list a of firms cutting salaries.

The memo just went out to all associates:

The first step in our move to this new approach was a comprehensive review of base salaries for all associates. We are rolling back starting salaries to the previous level - $145,000 in Boston, DC, NY, Chicago and California (and corresponding lower levels in the rest of our US markets). This impacts current first year associates as well as our incoming summer associates and our new associates who will join us in January of 2010.

We have also reviewed base pay for the balance of our associates, making adjustments to our associates’ base pay based on individual performance and contribution to firm financial results. Base pay changes will be reflected in the May 21, 2009 paycheck. Associates will be informed of any changes to base pay beginning today.

So far, early reports indicate that some associates received a performance based pay cuts between 15% and 20%. But we did also speak to a source that did not receive any cut at all.

After the jump, Nixon Peabody takes another swing at lockstep by changing its bonus structure.

Given Nixon Peabody’s announcement earlier this week that it was laying off 20 attorneys and 36 staff, one might safely assume that there is not enough work to go around at the firm. Accordingly, a tipster e-mailed us this week to say that 3Ls bound for Nixon this fall had been told that their start dates were being pushed back.

Allison McClain, Nixon Peabody’s spokesperson, confirmed this:

We have chosen to defer the start date for our fall associates to January 2010 and we will pay each a deferral stipend. This start date change affects all of our fall associates in all offices.

McClain declined to elaborate. Someone tell us: what’s the going rate for deferral stipends these days?

Last month, we asked whether later start dates were the trend for the fall. In our terribly unscientific poll, only 6% of respondents said their start date would be in January, while the most sizeable chunk—35%— said they were starting in September.

We’ll continue to keep you posted as to start date push backs. On the downside, later start dates mean delayed revenue for first-year associates (though one could move home with the parents and hoard the deferral stipend). On the upside, those Biglaw-bound 3Ls who don’t like the beach may be able to start thinking about bar trips that involve skiing.

Update (2:39): Tipsters are now confirming that the deferral stipend is $10,000.

Earlier: Nationwide Layoff Watch: Nixon Peabody Lays off 20 Attorneys, 36 Staff
Nationwide Start Date Watch: Longer summers for new associates in 2009?

Nixon Peabody announced layoffs of 56 employees today. Nixon Peabody adds its name to the growing list of firms that are eschewing stealth reductions in favor of open communication during an obviously difficult time. Managing partner and CEO, Richard F. Langan, Jr. furnished ATL with a statement minutes after the first reports surfaced of layoffs at Nixon Peabody:

While we enter 2009 with a solid platform to build upon, we are also faced with many business challenges that other law firms face-reductions in client demand for legal services which result in reduced work volumes for attorneys and paralegals, in the face of an increasing cost of doing business. Prudent management of our business requires that we downsize our associate, legal support, and administrative ranks, with the result that 20 attorneys will be leaving the firm, and we will be reducing our staff by 36 people through a combination of staff reductions and the creation of new positions.

One of our sources also reports:

A few unlucky first years who were in wrong group at the wrong time and never got the chance to prove themselves. It’s shocking that Nixon Peabody gets recognition as one of the better places to work…

Perhaps this kind of open communication from the firm is one reason Nixon is typically well regarded by the attorneys who work there?

We don’t know if any of the 56 employees let go from Nixon today were recent laterals from Thelen. Remember back in November, Nixon threw Thelen refugees a major life boat as Thelen was dissolving:

But now it is looking like Nixon is picking up 90 ex-Thelen lawyers (partners and associates), former Thelen support staff, and tripling its presence in Silicon Valley.

Good luck to all the former Nixon (and all the former Thelen) people looking for work. Please read the full statement from Mr. Langan after the jump.

The summer of 2009 should be very different from past summers of fun and excess. Many are expecting this summer to be a twelve week (or ten week, or eight week) “job interview” that current Biglaw associates didn’t really have to go through.

This shouldn’t come as a galloping shock to A) regular ATL readers, B) casual ATL readers, C) people who can read, or D) anybody at all that has been paying the slightest bit of attention to the legal industry.

But it is time to ask “how bad is it going to be?” We started receiving reports this weekend on perhaps a new paradigm for summer associates. Here’s a rumor that has been swirling around Nixon Peabody:

Nixon Peabody [has] informed their summer class they will only be hiring 50% of the summer associates?? Basically they said…only HALF of you are going to make it and we are going to give you real work to see who is worthy.

After the jump, Nixon Peabody unequivocally shoots down this rumor.

With all the layoffs rippling through the Biglaw community, we are likely to see more lawsuits from attorneys directed at their former employers.

Right now, Nixon Peabody is in the spotlight. A former associate is suing the firm. The National Law Journal reports:

Henry Har, now an associate in Holland & Knight’s San Francisco office, claims that he was wrongly fired from Nixon Peabody in 2008 because of his sex and gender, and because he is Asian-American. …

Har, a graduate of New York University School of Law, originally worked in Nixon Peabody’s San Francisco office and moved to the Los Angeles location in September 2007. His complaint states that the Los Angeles office had a “drastically different working environment” from the San Francisco office and that attorneys in the office “demonstrated inappropriate and offense behavior towards ethnic minorities, women and homosexuals.”

The firm responds after the jump.

We’ve previously reported that Nixon Peabody was acquiring 60 ex-Thelen attorneys, but only Thelen refugees located in Manhattan.

But now it is looking like Nixon is picking up 90 ex-Thelen lawyers (partners and associates), former Thelen support staff, and tripling its presence in Silicon Valley.

Yesterday’s press release from Nixon reported:

The new attorneys are joining all four of Nixon Peabody’s departments: business, intellectual property, litigation, and real estate. The firm also plans to hire a number of associates and staff from Thelen to help support the new partners. With the addition of these new attorneys from Thelen in Silicon Valley, which will triple in size, San Francisco, New York, Los Angeles, Washington, DC, and Shanghai, it is anticipated Nixon Peabody will have more than 825 attorneys worldwide in 19 cities.

After the jump, remember when Nixon and Thelen were supposed to merge?

Nixon Peabody and Thelen continue to make googly eyes at each other. But if Nixon keeps dancing and talking instead of making a move, there might not be any Thelen left to merge with.

As The Recorder reports:

Bingham McCutchen plans to announce on Monday that four D.C. attorneys from Thelen are moving over: Partner Carl Valenstein — recently listed on Thelen’s Web site as a member of the firm’s partnership council — as well as partners Jerome Akman and David Vidal-Cordero, and senior counsel Rebecca Hartley.

I don’t know who any of those people are, but it’s safe to assume that the laws of “subtraction” still apply to Thelen. It’s not like Nixon (or anybody else) is going to merge with the Thelen associates. A book of business is very different from an active Facebook page.

At least Thelen is trying to get the word out that not all of their partners are up for sale:

Two Thelen partners made a point of showing solidarity with their firm Thursday afternoon.

[Michael] Hallerud said that he’s been with Thelen for more than 13 years and has “no interest in going anywhere,” adding that the San Francisco office is “a family place.”

Another partner, [John] Heisse, replied in an e-mail: “As I have told what seems to be every headhunter in the continental U.S., I have no intention of taking my practice to any other firm. If your article has the effect of stopping their calls, then I appreciate your help.”

It’s awesome that Mr. Heisse is in such great demand. But wouldn’t it be nice if he put in a good word for whatever mid-level has been doing his dirty work for the past few years? Something like:

Hey Mr. Recruiter for a firm with much more stable financials. I’m sticking with the date I came with, but you might want to call up Tippy Highflower whose a 6th year in our San Fran office. She’s great and a future star, and based on the bottle of Zoloft I just saw her eating for lunch, I bet she could use some reassurance about her future prospects.

Associates need lifeboats too. Sometimes just knowing that you have one can help you weather the storm.

Merger or No, Gems Remain in Thelen’s Ranks [Law.com]

Earlier: Law Firm Merger Mania: Nixon Peabody + Thelen = Nixlen Thelpea?

Thelen has laid off attorneys and changed its name, the law firm equivalent of hitting the gym and getting a makeover. Now they’re back in the club and looking for a mate.

Leigh Jones of the National Law Journal reports:

Thelen and Nixon Peabody are in merger talks, with a possible agreement pending, according to sources close to the situation. The law firms have been in extensive talks, with Nixon Peabody leaders traveling to San Francisco to meet with Thelen leaders, according to two sources.

Wasn’t this the plot to the movie Made of Honor? Nixon plays the role of Dr. McDreamy, with its dulcet law firm song. Thelen is the cute platonic friend, who suddenly starts looking really hot when she’s about to get hitched to somebody else.

Given the amount of coverage ATL devotes to these two firms, we wholeheartedly endorse the pairing. Maybe we could convince them to adopt a firm mascot — Nixlen Kittens, anyone?

Thelen in merger talks with Nixon Peabody [National Law Journal via Law.com]

Earlier: Law Firm Merger Mania: Thelen Sending Out Feelers?
Law Firm Merger Mania: Everyone’s a Winner at…. Nixon Pillsbury?

The Vault 100 march continues! In this series of open threads, we list the firms, and you all discuss their upsides and downsides. We’ll be wrapping this puppy up this week.

Here are the next ten (with prestige scores in parentheses):

71. Nixon Peabody LLP (5.218)
72. Hunton & Williams LLP (5.208)
73. Perkins Coie LLP (5.119)
74. Reed Smith LLP (5.057)
75. Patton Boggs LLP (5.050)
76. Chadbourne & Parke LLP (4.997)
77. Bryan Cave LLP (4.969)
78. Thacher Proffitt & Wood LLP (4.967)
79. Howrey LLP (4.926)
80. Schulte Roth & Zabel LLP (4.910)

Usually, we have fun with the “notable perks” chosen by Vault. But as we move down the list, the perks are becoming distinctly less notable — e.g., gym membership discounts, free parking, and “good views.” Oh well.

You know what to do! Have at it in the comments.

Earlier: Vault 100 Open Threads - 2009

Lately it seems there’s been a lot of law-firm merger activity. The statistics bear this out, although there’s disagreement as to degree. From a piece by Leigh Jones in the National Law Journal:

Law firms didn’t slow down their march to the altar in the second quarter of 2008, but just how many mergers occurred depends on whom you ask. Altman Weil announced a sharp increase in merger activity during the second quarter. It pegged law firm mergers at 26, compared with 18 in the first quarter.

At the same time, competitor Hildebrandt International announced steady merger activity, with a total of 14, compared with 12 mergers in the first quarter of 2008.

There has also been a steady increase in rumors about law firm mergers. Some of them will turn out to be true, some not. The fact that some gossip won’t pan out doesn’t make it any less interesting. Lawyers need some way to pass the time, and speculating about their competitors — or themselves — is as good a way as any.

Here’s an excerpt from a recent profile of our media idol, former Us Weekly and Star editrix Bonnie Fuller, from the New York Times:

Ms. Fuller knows the dyad of funny / hurtful, having run cover articles about people getting divorced, pregnant and tossed into rehab. Sometimes those stories were true.

“There have been a lot of false pregnancies and laugh-out-loud groaners,” says Simon Dumenco, a longtime analyst of the magazine industry who writes a column for Advertising Age. “What she has done is gotten at a kind of essential truth that is less about the specifics of the gossip. This endless speculation and estimation about the lives of these people has become the stuff of culture.”

In that last sentence, replace “these people” with “these law firms,” and that’s ATL for you. A lot of what we write in these pages may turn out to be inaccurate, but we’re getting at “a kind of essential truth that is less about the specifics of the gossip.”

So, with that caveat in mind, are you interested in hearing the latest law-firm merger gossip? Read more — about rumored deals involving Baker & McKenzie, Heller Ehrman, Nixon Peabody, Pillsbury Winthrop, Sonnenschein Nath & Rosenthal, and Harris & Moure (who?) — after the jump.

Yesterday we wrote about possible layoffs at Pillsbury Winthrop Shaw Pittman. We’ve acquired a few more details, as well as information that might explain why some commenters who claim to be at PWSP haven’t heard about them yet. We’ll pass it along later; if you can add to our knowledge, please email us.

In the meantime, here’s an intriguing rumor making the rounds that might explain upheaval at Pillsbury:

Have you heard anything about Nixon Peabody merging with Pillsbury Winthrop? I have heard this from several different associates [at NP] over the past few weeks. It certainly would seem to jive with the new chairman’s strategic initiative rolled out last month which hopes to double Nixon’s size over the next few years.

More about that initiative, from a second Nixon Peabody source:

[A] few weeks ago there was a firm-wide videoconference with the new managing partner Dick Langan. He said the goal was to double the size of the firm within five years; we all left saying the only possible way to go from 700 attorneys to 1500 in that short amount of time was a merger. He talked a lot about increasing our international presence, and specifically mentioned Paris and also South America.

So even if it doesn’t get with Pillsbury Winthrop, a merger involving Nixon Peabody wouldn’t be that surprising.

Read more, below the fold.

In today’s National Law Journal, Leigh Jones has a most interesting article about the impact of legal gossip blogs (ahem) on law firms. It begins:

Many of the nation’s most renowned law firms have felt the public relations wallop delivered by law gossip blogs, those online tabloids that can turn an interoffice memo into a virtual billboard of bad news for partners or associates.

Whether the topic is layoffs or love affairs, it seems that no subject is too edgy for sites such as Above the Law, Greedy Associates, AutoAdmit and a few others that dig up the legal profession’s dirt. The immediacy — and, at times, the brutality — of the media form is presenting a challenge for firms that are wary of their private matters entering the public domain.

True enough. But blogs can also be a medium for getting positive news out — e.g., associate pay raises, record partner profits, pro bono work, and charitable contributions — which firms are only now realizing.

Here’s an interesting comment from a firm leader one might expect to be less than enthusiastic about blogging:

Gossip blogs have created an immediacy of information and a quick way to share comments, compared with newspapers and magazines, said Rodgin Cohen, chairman of Sullivan & Cromwell. But the rule for law firms to follow has remained the same over time: “With any widely disseminated message, you have to ask if you’re prepared to see it in a publication,” he said.

New York-based Sullivan & Cromwell was highlighted for months on law blogs after former associate Aaron Charney filed a lawsuit in January 2007 alleging that he was subjected to sexual orientation harassment and retaliation by the firm. The case settled last year.

“I accept that publicity is a good disinfectant,” Cohen said.

Indeed (as Justice Louis Brandeis famously observed). Speaking of S&C gossip, does anyone have updates on Carlos Spinelli-Noseda?

More discussion, after the jump.

According to the non-theme-song song (mp3) of Nixon Peabody, the firm is “the best to work with” and “the best to work for.” At NP, “it’s all about the team, it’s all about respect, it all revolves around integrity.”

And top of the line ingredients. From the Washington Post:

Big-time lawyers are pros at waiting for judges’ tough decisions, but yesterday afternoon at Nixon Peabody in the District, some may have posted fewer billable hours until results of the firm’s 19th annual cook-off were handed down.

The competition pits men against women, which could lead to actionable territory and dangerous stereotyping. Yet, it has helped build camaraderie among all departments, firm employees say, pointing to Nixon Peabody’s ranking among Fortune magazine Top 100 Best Companies to Work For, three years running.

Wow, they really milk that honor for all it’s worth! Kudos to NP’s public relations department for placing this puff piece in the Post. The firm’s PR operation has come a long way from the days when they threatened bloggers over leaked musical homages (and generated unflattering publicity for themselves).

More discussion, after the jump.

In last month’s ATL / Lateral Link survey we asked you which holidays you worked on, or expected to work on, during 2007. About half of you reported that you had worked on Martin Luther King Jr. Day.

Last week, we asked you how you fared this year. Did you take the day off to honor a champion of civil rights, or did you make it a “day on”?

We received just under 1,300 responses, and 44% of you reported that you took the day off. Associates in New York, Los Angeles and Boston were most likely to celebrate the holiday, while associates in Chicago, Atlanta, the Bay Area, and Texas were most likely to be working. (Respondents in the Bay Area were also most likely to work over Christmas and New Year’s. Is it time for them to get New York bonuses?)

How did it break down on a firm by firm basis? DLA Piper, Milbank, Sidley & Austin, Dechert, Hunton & Williams, Jones Day, Latham, Mayer Brown, McDermott, Hughes Hubbard, McGuire Woods, Morgan Lewis, Nixon Peabody, Paul Hastings, and Sullivan & Cromwell each had multiple happy associates who reported that they had taken the day off. Kirkland & Ellis, Baker Botts, Dewey & LeBoeuf, O’Melveny & Myers, Weil, and Winston & Strawn each had mixed responses. Associates at Skadden, however, uniformly reported that they had worked the holiday, as Martin Luther King Jr. day is a “floating” holiday for the firm.

Of those who spent the day at the office, about 54% reported that they weren’t actually asked to work the holiday, but had things they needed to get done. About a quarter reported that their offices were open. Another quarter said that partners told them to work on the holiday. About 8% were asked to work by clients. A surprising number of respondents wrote in that other associates had told them to work on the holiday.

A little over a third of respondents who worked on the holiday thought that the work did not justify the sacrifice.

Congratulations to this quintet of five law firms, which just made Fortune magazine’s annual list of the 100 Best Companies To Work For (listed below in rank order):

19. Arnold & Porter: “Staffers get 12 weeks paid maternity leave and profit sharing of 7.5% of salary. The less you make, the less you pay for health-insurance premiums.”

Actually, a correction: 18 weeks (as of January 1, 2008).

31. Alston & Bird: “Both the legal and nonlegal staff get super benefits, including 90 days of paid maternity leave, coverage of fertility treatments, and concierge services.”

Concierge services? Fabulous. Atlantans, stop yer whining!

41. Bingham McCutchen: “They’re proud of their elite grads: 72 from nearby Harvard Law, 24 from Yale, and 20 from Stanford. They all start at $160,000 a year.”

55. Perkins Coie: “They value fun at this law firm. At 2007’s Lawyerpalooza battle of the bands, the Perkins Coie rock & rollers brought down the house (and took home the top prize).”

See also Nixon Peabody: “Fun is not prohibited here.” Speaking of which…

66. Nixon Peabody: “The law firm excels on policies for GLBT employees (a 100% rating from the Human Rights Campaign); it targets 3% of billable hours annually for pro bono work.”

Please send us any theme songs that are composed to commemorate these honors. Thank you.

100 Best Companies To Work For (2008) [Fortune]

Earlier: Bingham McCutchen: Land of the Amazons?