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Morning Docket 12.17.08

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* Conversations about impeachment of Gov. Rod R. Blagojevich were postponed until today so that Blago’s lawyer Ed Gerson could be present, or so that prosecutors could make sure that the impeachment committee could interfere with his criminal case. [The New York Times]

* Judges tighten their belts. Gov. Patterson of New York praised New York’s judiciary for presenting such a tight budget request, despite the influx of financially-related cases. Maine’s judiciary didn’t see any cuts in the budget, but the Gov.’s failure to grant them a shortfall could make cases take longer. [Law.com]

* Former Amgen Inc. patent lawyer Darrell G. Dotson, who claims that he was fired for blowing the whistle on the company’s unethical activity, will be able to pursue his case in court, a Superior court judge rules. [The Los Angeles Times]

* Marc Dreier’s law firm, “scandalized” by his fraud charges, will file for bankruptcy. [The Associated Press]

* The recent killings of three Latino immigrants prompted Latino leaders to ask Congress to extend the federal hate crimes law. [FOX]

* Sarasota city commissioners abolish the city’s law against spitting. [The Associated Press]

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Latham & Watkins Salary Shenanigans Follow-Up

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Latham Watkins LLP lw logo.jpgMaybe Latham & Watkins was never into this whole “____ to $160K” thing to begin with. When Latham finally raised salaries across the board back in May 2007, we reported:

Well, it appears that Latham has been shamed into giving into the “hysteria” surrounding associate comp.

As we’ve discussed, Latham’s associate salary freeze essentially cancels out the pay raise from 2007. Whether you call it a salary freeze or a pay cut, Latham chairman Robert Dell is calling it sound business. The Blog of the Legal Times reported this quote from the chairman earlier today:

We are modifying associate compensation as part of a prudent business strategy in the face of challenging economic times. All associates moving to the next class year on January 1, 2009 will continue to receive the same base compensation as they received in 2008. We are confident that our business strategy, our diverse practices and our strong global platform will serve our clients and our firm well as we all face the challenges of a difficult business environment in 2009.

More discussion, including a salary chart that Lat prepared to show just how bad L&W associates must be feeling today, after the jump.

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Associate Bonus Watch: Allen & Overy

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law firm associate bonus watch 2008 biglaw bonuses.jpgAllen & Overy, recently named by American Lawyer as the firm with the sixth-highest revenue in the world, just decided to pull a Half-Skadden:

Bonuses will be paid at the end of January.

Class of 2008: $17,500 (pro-rated)
Class of 2007: $17,500
Class of 2006: $20,000
Class of 2005: $22,500
Class of 2004: $25,000
Class of 2003: $27,500
Class of 2002: $30,000
Class of 2001: $32,500

I hear that one good way to keep revenues high is to pay your employees as little as the market will bear.

Good job A&O. Way to keep up appearances. There’s no way we’d deny you time in the spotlight just because you sent out a bonus announcement around the close of business.

Read the full memo after the jump.

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Non-Sequiturs: 12.16.08

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Spitzer Slate.jpg* Eliot Spitzer is now a columnist for the Slate. Who’d he have to **** to get that job? [GapperBlog]

* There’s nothing here that regular ATL readers don’t already know about, but here’s NPR’s take on our legal community, with a little help from me. [NPR]

* I’ve got an innovative solution to layoffs: stop hoarding all the money in the partnership ranks. [Connecticut Employment Law Blog]

* Mark Herrmann does a much better job of writing his own non-sequitur lead-in than I could. “Your appeal was denied. U will B executed Saturday. Thx. :) ” [Drug and Device Law]

* Goldman Sachs. 1% tax rate. If Obama doesn’t fix this, I’m writing in Khrushchev in 2012. [TaxProf Blog]

* It’s been a banner year for celebrities in trouble with the law. [Popsquire]

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Nationwide Pay Freeze Watch: Reed Smith Does The Obvious

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Reed Smith.jpgWhile the Latham & Watkins salary freeze came as a shock to most in the Biglaw community, Reed Smith associates have known for days that their salaries would remain frozen in place.

Reed Smith laid off 115 people two weeks ago. Individual salary memos started going out to the remaining Reed Smith associates last week (Reed Smith makes salary decisions known on a person-to-person basis). Not surprisingly, most people are not getting 2009 raises.

Because of the individualized nature of the salary information, we can’t say that nobody at Reed Smith will be receiving a raise. We can say that nobody we’ve talked to has received a full raise, expects a full raise, or is hoping for anything other than having a job when the calendar flips over. A couple of people we talked to will be getting a small salary bump, but nothing at the normal level for their class.

Did somebody say something about bonuses? Our Reed Smith sources don’t expect to get that either. There hasn’t been any official announcement, but the rumblings around the firm all point towards the “special bonus” of $0. Though, one tipster points out that there are enough bonus complications that the firm might be able to avoid the negative press associated with a $0 bonus:

RS doesn’t give end-of-year bonuses. All of our bonuses are dependent on hours or performance or are related to profit sharing. Everything is discretionary, except profit sharing, which is based on the firms performance, and well, we know where that is.

The lesson, as always, if your firm recently picked up a bunch of Thelen attorneys, or a bunch of Heller attorneys, things are not going well.

Earlier: Nationwide Layoff Watch: Reed Smith Cans Staff, Associates, ‘And Your Little Dog Too’

Howrey and Reed Smith: Latest Beneficiaries of Thelen’s Shutdown

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Open Thread: The Time for Giving… To Lawyers!

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We’ve covered gift-giving by lawyers, to their secretaries and administrative support staff. Now, it’s time to move on to gift-giving to lawyers.

This is an open thread to discuss best gifts for lawyers. Perhaps you can e-mail the post out to friends and relatives instead of compiling the hated gift wish list.

Scale of justice bling.jpgTo get your creative juices flowing, here’s a few ideas we came up with:

For the lawyers who like bling: Profession Gifts offers this pin up as “a beautiful clothing accessory that makes both a professional and fashion statement.” Indeed.

For the lawyer doing doc review around the country: We hate stripping down to go through airport security and unloading the contents of our carry-ons. While the shoes, the belt, and the metal bustier still have to be shed, laptops can stay in their bags according to a TSA policy change made this summer. The catch is that you have to have a special “checkpoint-friendly” bag (via USAToday). Here are some bags fitting the bill from The Week.

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For those who work so hard that they never see their kids: It’s nice to remind the little ones of their absent parents. For Counsel has a whole section of “Gifts for Lawyers’ Babies and Toddlers.” We like the idea of branding the little one with this bib.

For the lawyer with lots of weird stuff on his or her desk: We might recommend Supreme Court Bobbleheads (if you can get one) from the Green Bag. Scalia’s up for grabs on eBay at the moment. Current bid: $102.50.

blindfold copy.jpgFor the kinky lawyer: A “justice is blind” blindfold.

So here’s an open thread to discuss what you want this year (besides a Skadden-sized bonus). What do you recommend giving to legal folk this holiday season?

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Dechert Ices 72 Staff Positions

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Dechert logo.JPGWe started getting reports this morning that Dechert let go a number of secretaries and legal assistants. But the numbers from our tipsters were low, very low. The Legal Intelligencer just reported that Dechert has in fact laid off an amazing 72 staffers.

A firm spokeswoman confirmed that Dechert has laid off 72 administrative staff across its U.S. offices. She wouldn’t get into details about which positions or how many in each office, but said the cuts were basically proportionate across the firm’s 11 U.S. offices.

The 72 administrative positions account for about 12.6 percent of the firms 570 U.S. staff members. Dechert has around 1,045 attorneys firmwide and the spokeswoman said there are no plans to cut any more staff or any attorneys based on what they know at this time.

An attorney tipster moves straight to the problem associates at Dechert are all worried about:

[I]t’s not like we can have less secretaries unless there are less lawyers…

Dechert has come to the layoff buffet early and often. In October, there was a lot of contention about how many attorneys Dechert has been stealthily getting rid of. At least the staff layoffs are being properly announced.

But then again, Dechert staff also got to feel a little bit of that “Dechert style” on their way out the door. More after the jump.

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Associate Bonus Watch: Fried Frank Wades Into Half-Skadden Pool

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After stealthily laying off at least 30 associates, the Fried Frank bonus announcement should come as no surprise:

FF bonus memo.jpg

law firm associate bonus watch 2008 biglaw bonuses.jpgNobody expected Fried Frank to break into Skadden territory on bonuses. But at least there is a nod towards the reason for paying the low-end bonuses championed by Cravath:

Current global economic conditions have presented new challenges for our clients and your contributions play an important role in our ability to work together to meet these challenges.

Let’s close off the Fried Frank loop after the jump.

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New Facebook Application: “You’ve been served”

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Facebook logo MySpace Friendster Abovethelaw Above the Law blog.jpgYou can use Facebook to accumulate friends, poke strangers, and tag photos. And if you’re a lawyer in Australia, you might be able to use it to serve a complaint.

Our legal friends in the Land Down Under have made an interesting ruling. From the Associated Press:

A court in Australia has approved the use of Facebook, a popular social networking Web site, to notify a couple that they lost their home after defaulting on a loan.

The Australian Capital Territory Supreme Court last Friday approved lawyer Mark McCormack’s application to use Facebook to serve the legally binding documents after several failed attempts to contact the couple at the house and by e-mail.

The lien notice could have been sent by Facebook messaging–the judge specified that posting to a Wall was not kosher–but the couple got wind of the plan in news reports and took their profiles down.

We love rulings that legitimize the use of Facebook in the workplace. Next up: legal notice via gchat?

Australia OKs Facebook for serving lien notice [Associated Press]

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Nationwide Pay Raise Freeze Watch: Latham & Watkins

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economy freezes over.JPGIf you liked your 2008 salary, you’re going to love your 2009 salary. Latham & Watkins just sent around this email about 2009 associate compensation:

The world economy is experiencing unforeseen and unprecedented dislocations. Our clients are feeling those impacts and the legal community is not immune. The Executive Committee has spent the last few weeks discussing these critical issues in the context of planning for 2009. While we anticipate that the diversity of our practices and global reach will serve us well in the year to come, it seems clear that the global economy will continue to be challenged at least through 2009. As a result, we are modifying associate compensation as part of a prudent business strategy.

Latham Watkins LLP lw logo.jpgEffective January 1, 2009, associates moving to the next class year will continue to receive the same base compensation as they received in 2008. Please do not hesitate to contact your local Associates Committee members if you have any questions about the resulting salary scales.

We expect as a general matter to continue to reward outstanding performances through our merit-based bonus pool. As in previous years, we will announce bonuses in late January.

We are confident that by continuing to work together we will be well positioned to succeed in the face of the economic challenges that lie ahead. We thank each of you for your many contributions to the firm.

Freezing salaries is now part of the “market.” The latest associate pay raise is effectively being undone.

After the jump, what was that about bonuses?

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More Layoffs Coming in 2009?

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financial crisis legal salaries.JPGI’ve been operating under the assumption that the legal layoff party of 2008 would stop in 2008. My rose colored logic has been simple. I’ve assumed that Biglaw managers can: A) count, B) add, and C) figure out a sustainable 2009 business model. If those three assumptions are true, I figured that most well managed law firms would be able to get through all of their attorney reductions in 2008 and get themselves into an appropriate position for 2009.

Flawed logic? Perhaps. It’s what the shrinks like to call a “coping mechanism.”

Of course, in making these assumptions I ignored the possibility that some firms were still using “operation ostrich”: a heads down, asses high approach that gleefully exposes tail feathers to the still spinning wheel of economic destruction.

The Legal Intelligencer today warns us that the first quarter of 2009 could see more chopping at firms that are still trying to ride out the storm:

Move over, New York — it’s Philadelphia’s time in the hot seat. Legal blog Above the Law was abuzz with reports and rumors Monday that two Philadelphia firms saw associate cuts with one of them laying off staff as well. And according to one consultant, the Pennsylvania market could most likely expect to see more attorney cuts in the new year as firms wait out the holiday season.

After the jump, the new cuts in the new year aren’t likely to be localized just to the Philadelphia area.

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Cadwalader: Where ‘Human Resources’ Is a Term of Art

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Cadwalader Wickersham Taft new logo CWT AboveTheLaw blog.jpgI’m not sure how you make a “Happy Holidays” e-card mildly insulting, but then again I’ve never been schooled in the dark arts practiced by Cadwalader, Wickersham & Taft.

Over the weekend, CWT sent around an inspirational holiday greeting card. Check out the screenshot:

CWT holiday screenshot.jpg

Great! Lots of firms send out holiday greetings. But does every firm send out cards to the people they laid off a few months ago? Because that’s what CWT did.

Let’s explore how CWT messed up what should have been a great idea, after the jump.

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