Kirkland & Ellis has asked a number of non-equity partners to leave, multiple sources report. The timing is unclear, but they may have up to six months to pack their things.
The number of laid-off non-equity partners — or “non-share partners,” in K&E parlance — is believed to hover somewhere between 15 and 25. Some are in litigation and some in corporate, but we understand that all of those let go are in Kirkland’s Chicago office.
A tipster points out:
All were told it’s because [of] performance, but most were considered fine lawyers and rated with or above their class each year.
Kirkland & Ellis spokespeople did not respond to requests for comment by the time of this posting.
It’s important to remember that Kirkland & Ellis has a fairly large class of non-equity or income partners. Kirkland uses the “non-share partner” classification liberally, and they tend to make more lawyers “partners,” at earlier stages in their careers. Some K&E “partners” would be senior associates at other firms.
Kirkland also paid out Cravath-level bonuses. When Kirkland announced their bonuses, many commenters opined that bonuses were better than layoffs and that K&E would not do layoffs.
But it looks like Kirkland has had to do some more belt-tightening as the economy continues to tumble. While laying off partners is unusual, it’s not unheard of; last fall, Jenner & Block axed 10 partners (both equity and non-equity).
Clifford Chance leadership to the rank-and-file partnership: “Partners, spread the wallets, so we can smell the juicy insides.”
Associates, we feel your pain: slashed bonuses and salary freezes are bad news. But things could be worse: imagine having to pay your firm for the privilege of working there:
[A]s a Christmas “bonus” this year, partners at Clifford Chance were each required to make a capital contribution of £100,000 (roughly $150,000). Ouch.
Through a spokesperson, Clifford Chance declined to comment. But, if true, the news would not be completely shocking. The firm has done at least two rounds of layoffs, and they paid bonuses that were down sharply from prior years (although, in fairness to CC, at market levels for 2008).
If true, Clifford wouldn’t be the only firm looking to its partners for financing. As previously discussed, because of super-tight credit markets and the high cost of borrowing, more firms are financing their operations by tapping partner wallets. See, e.g., DLA Piper (letting some income partners become equity partners, if they can cough up capital contributions of up to $150,000).
Associates: next time you complain about greedy partners slashing your pay, consider the possibility that they’re suffering too in this economy. They’re trying to safely navigate the recessionary shoals, just like the rest of us. Some of the measures they’ve been taking, like pay freezes and reduced bonuses, may just be prudent planning. Better to have a smaller paycheck than no paycheck at all.
Are you aware of other firms that are hitting up their partners for cash in these dire times? Drop us a line, by email (subject line: “[Firm Name]: Capital Contribution”). Thanks.
A study conducted by Indiana University found that law students are more likely than other students to use their laptops in class. The study confirms our own internal data that shows that most law students enjoy having internet access on par with what can be achieved in Ghana.
The ABA Journal smartly put the study in the context of the University of Chicago Law School’s attempts to shut down internet access in most classes, a move no doubt applauded by this guy:
Distractions posed by laptops with Internet access have prompted some law professors to ban the computers and one law school–the University of Chicago–to shut down Internet access in most classrooms.
A very wise tenured professor once said to me:
The way I see it, if my presentations are not interesting enough to capture your attendance and attention to a lecture you’ve already paid for, the fault is on me.
Needless to say, his lectures were always well attended, and I know more about the English Revolution than I could possibly need. But I digress.
I’m a 2L, and the firm I’m working for next summer sent me fairly nice and useful Christmas present. Should I write the recruiting team a thank-you note? I’m from the South, where we write thank you notes for anything and everything, but I don’t know what the New York/DC norm is and don’t want to look stupid. The firm is DC-based, and I’m splitting with their DC and NY offices.
Dear Eternally Grateful,
Once upon a time, I was on the phone with my mom, sobbing uncontrollably over a guy who dumped me. My mother’s a no-nonsense lady, and while I blathered on and on about how I should just throw in the towel now and move to a nunnery because I’d never find anyone as amazing, she cut me off and told me, verbatim: “I didn’t want to have to tell you this, but remember how we got him that Tempur-Pedic pillow for his birthday? He never sent us a thank you card. Let that sink in.” Her words stung. What kind of person doesn’t send a thank you note to his girlfriend’s parents? A monster, that’s who.
The point is, there is a time and a place for thank you notes. If your significant other’s parents get you a birthday present, send one ASAP. But if your firm’s recruiting team sends you and everyone else in your summer class and/or firm engraved paperweights, you look ludicrous if you send a thank you back.
I’m not saying that thank you notes are never appropriate in the law firm context. On the contrary, if someone referred business to you, it’s entirely appropriate to break out the heavy stock paper with the understated paisley envelope and thank away. But cards that say “thanks for interviewing me” or a “thanks for sending me this tote bag which you sent to everybody else in the firm” is just too much thanks. Nobody should be that thankful for anything, ever.
No matter how insanely useful the stainless steel pen inscribed with the firm’s name, no matter how much you cherish that firm-emblazoned mug, you need to show yourself (and the firm) some respect by reeling in the gratitude, except when it’s appropriate.
The New York Times is reporting that U.S. Senate Democrats will likely seat Roland Burris, Illinois Governer Rod Blagojevich’s pick to replace Barack Obama.
Changing course, Senate Democrats emerged from a meeting with Senate appointee Roland Burris on Wednesday and set forth the legal steps under which they’re willing to welcome him into the Senate in President-elect Barack Obama’s vacated spot.
Isn’t it great to live in a country of laws? A country where disgraced executives can openly flaunt the law yet still wield its power. This whole Senate drama has really been a great example of the power of law.
And hey, how ’bout those Democrats? They control the executive and both houses of Congress, but they sure aren’t letting “winning” go to their heads are they? No, no, no. Looks like the Invertebrate party hasn’t lost it’s talent for folding like a cheap accordion under the slightest bit of pressure:
The pleasantries and complaints were a far cry from the he-can’t-be-seated rhetoric that came from the Senate Democratic caucus a week ago when the governor shocked the party and nominated Burris, who would be the Senate’s only black member now that Obama has departed.
Neither Durbin nor Reid guaranteed Burris would be seated but the majority leader said there almost certainly would be a full Senate vote on it.
There is a great profile in the Boston Magazine about attorney James Sokolove, a guy that advertises his legal services on T.V. so often I just assumed he didn’t actually exist.
Apparently, he does exist, but his legal services don’t, at least not in the traditional sense:
Despite his prodigious success and his omnipresent image as a bulldog attorney, Sokolove hasn’t seen the inside of a courtroom in nearly three decades. Truth be told, he’s argued only one case before a jury; it was back in the early 1970s, and he lost. It wasn’t tenacious lawyering that allowed Sokolove to build a legal empire, but rather his prowess as a businessman and an innovator. He and his staff of 80 don’t try cases; instead they connect prospective clients to other lawyers, who pay Sokolove a cut of their fees for ginning up business.
Sweet. The only thing better then an unabashed “ambulance chaser” is an unabashed ambulance chaser who doesn’t know where the courthouse is located.
But after the jump, what’s really fascinating is that this guy really does have a system.
Bad things happened in the business of Biglaw in 2008. Some people are still so scarred by the experience that they’d just as soon pretend last year never happened.
But the events that transpired in 2008 could have ramifications for the legal industry for a long time.
Our third-place story is the Biglaw salary freeze. It could be the “Shock Doctrine” of the market meltdown. Slashing bonuses during a down year is one thing, but freezing pay (or cutting pay depending on your perspective) is downright deflationary.
We’ve given a lot of “credit” to Latham & Watkins for being the most prestigious firm (according to Vault) to freeze salaries, but as commenters have pointed out, Latham wasn’t the first.
That distinction goes to Squire Sanders. When they froze salaries back on December 15th, the news was so shocking people didn’t know what to make of it. Back then, we said:
The memo below was sent to us by a tipster, with this prefatory comment: “No one really knows what the f*** the second half of the first sentence of the memo means.”
Since then, the following firms have instituted some form of a salary freeze: Orrick, Dorsey & Whitney, Reed Smith, Venable, Sidley, DLA Piper, Arnold & Porter, Sheppard Mullin, and Sonnenschein.
And those are just the ones we know about.
But it’s also important to remember which firms are not on that list. Skadden and Cravath and countless others are going ahead with the expected pay raises for rising classes. Neither Squire Sanders nor Latham set the market for associate pay. They just gave firms another option in dealing with the financial crisis.
Firms need options because you don’t want to work for a firm that is part of our number two story of the year.
* Yesterday’s Lawyer of the Day was snubbed by the Senate. But Democrats may reconsider if Roland Burris agrees not to compete for the seat in 2010. [Washington Post]
* …UC Irvine School of Law Dean Erwin Chemerinsky says they certainly should. [Los Angeles Times]
* Adam Liptak profiles Obama’s solicitor general nominee Elena Kagan. She may not have revealed her views on unilateral executive power, but she did manage to bring harmony to the “notoriously dysfunctional Harvard Law School.” [New York Times]
* More problems for U.S. District Judge Samuel Kent, the first federal judge to be charged with federal sex crimes. More sex crime charges! [Houston Chronicle]
* Judiciary Committee Republican Sen. Arlen Specter is going to the mat over the AG nomination of Eric Holder. He questions his character and his ability “to say no instead of to say yes.” [New York Times]
* Nationwide Government Layoff Watch: The Arizona Attorney General’s Office says goodbye to 20 people. [Phoenix Business Journal]
Sometimes readers complain that Above the Law focuses too much on the East Coast. Since our headquarters is here in New York, and since we lived in Washington from 2006 to 2008, we may have an East Coast bias.
But we do try to run a national legal news site. Even if we’re physically located in New York, wherever two or more lawyers are gathered in our name, there we are.
In recent months, we’ve been making a conscious effort to do more for the West Coast. For example, we’ve started posting — later in the day, to account for the time difference — material aimed at a West Coast / California audience.
And next week we’ll be in L.A., to participate in three events (all kindly sponsored by the Federalist Society). One is with a leading light of the federal judiciary, and another is with a top law professor/blogger. Here are the details:
1. A Judge in Full: Personality and Jurisprudence
When: Tuesday, January 13, 12 p.m. – 1 p.m.
Speakers: The Honorable Alex Kozinski, Chief Judge, Ninth Circuit; David Lat, Founder, Above the Law
Where: Omni Hotel, 251 South Olive Street, Los Angeles
MCLE Credit: One Hour
Cost: $38 if paid in advance; $40 if paid at the door. Public employees, students and law clerks may pay the discounted rate of $15.
* The smell of marijuana is the smell of freedom from tyranny. Or it’s the smell of involuntary incarceration. It really depends on where you live. [Underdog]
* God, does anybody else remember when Wesley Snipes was kind of cool? “We should have gotten a live chicken.” “Jeffrey Dahmer? I love that guy!” “This thing is bigger than Nino Brown. This is big business. This is the American way.” [TaxProf Blog]
* I remember 3L year. I went to Foxwoods on my way from NYC back to Boston and won a ton of money at craps. I was in the Parody. And then my parents came to watch me graduate. I’m told other things happened as well. What a great year. [Ridiculum]
Sonnenschein is the latest firm to adopt a creative approach to associate compensation during the financial crisis. The firm announced bonuses that can go much higher then their peer firms, but also announced a salary freeze.
First the bonus news:
We are pleased to announce that Associate productivity bonuses for 2008 range from $10,000 to $70,000. The Policy and Planning Committee has approved the attached bonus schedule which, as we have discussed during recent Firmwide Associate meetings, remains unchanged from last year and includes a step up for seniority. These bonus levels will result in some of our Associates receiving significantly higher bonuses than their peers at many of the firms with whom we compete for talent and clients, and reflect our strong belief that it is important to recognize and reward our most productive Associates.
You don’t often see a firm go the “significantly higher bonuses than their peers” language. Clearly, Sonnenschein wants its people to know they are valued.
However, no firm is an island in this economic storm. The salary freeze reflects that reality:
With respect to our Associate salary schedule, Policy and Planning has concluded, after consultation with our Practice Group Leaders and Office Managing Partners and consideration of marketplace and client factors that, effective January 1, 2009, Associates moving to the next class year in 2009 will continue to receive the same base compensation as they did in 2008.
As with Quinn Emanuel, the top bonuses are available for highest billers. But, if you were a top biller, the extra bonus offsets the lack of a pay raise.
But perhaps the larger point here is that every firm needs to come up with individualized answers to the economic client. Sonnenschein laid off 25 attorney, acquired 100 Thacher Proffitt attorneys, is paying very high bonuses to associates who bill more than 2450 hours, and is freezing associate salaries. Put another way, Sonnenschein is just another entity trying to navigate through the new economy as best it can until things settle down.
A college graduate without student loan debt is akin to reading a kind quote about Kim Kardashian in a tabloid—it’s rare.
In the past eight years, student loan debt has nearly tripled to a whopping $1.1 trillion, and in the past 10 years, the percentage of 25-year-olds with such debt has risen from 25% to 43%
It’s gotten so bad, in fact, that New York Fed economists warned last month that the burden of student debt could stilt consumer spending by twentysomethings, as well as further hamper the recovery of the housing market and economy.
To get a better idea of what massive student loan debt (we’re talking over $100,000 massive) looks like, we talked to an attorney who graduated with a large student loan debt. We also consulted LearnVest Planning Services CFP® Katie Brewer to see just how their repayment plans stack up.
S. Fischer, 36, Attorney Graduated: 2001
How Much I Borrowed: $100,000
What I Still Owe: $45,000
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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.
Deal flow has clearly picked recently up for most US associates, counsels and partners in Hong Kong/China and Singapore. We are on the phone with a lot of these folks on a daily basis, many of whom we have known for years. Further, the head of our Asia team, Evan Jowers, and Kinney’s founder and president, Robert Kinney, frequently meet in person with leading US partners in Asia to assess their needs and keep on top of the inside scoop at as many firms as possible. The need for legal recruiting help in Asia from experienced recruiters appears to be live and well. In March, Evan and Robert were in Beijing at such meetings, in April, Evan was in Hong Kong, and for half of June Evan will be in Shanghai and Hong Kong. Thus its pretty easy for us to tell when there has been an across-the-market pick up in capital markets and corporate work.
On an average day in Asia when Evan and Robert visit firms, they typically have 5 to 9 meetings a day, mostly with US partners in the market. The reason they have these meetings is not simply because Kinney makes a lot of US attorney placements in Asia and that a particular firm may have openings; instead these are just visits with friends. After years of working together as business partners, the folks at Kinney are actually these peoples’ friends. The firms Kinney work closely with in Asia (which is just about every law firm – call us if you want to know the one firm in the world we will never place anyone with again, ever, and why) look forward to the visits, or at least act like they do. After seven years in the market, many of the client partners are former associate candidates. Also, these US partners see Kinney as a very good source of market information as well, because they know how deep their contacts are in the market and how frequently they are speaking to counterparts at peer firms.
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