The legal community is still buzzing with reaction to the news of Orrick, Herrington & Sutcliffe’s layoffs of 40 attorneys — while White & Case sacrifices blood and treasure to the altar of “good timing.”
We don’t want to pile onto Orrick, we know a lot of good people that work there. But Ralph Baxter’s interview with the AmLaw Daily today is … a little weird.
Yesterday, we noted that Orrick’s layoffs come a month after they acquired a bunch of Heller Ehrman partners. Baxter addressed that issue specifically with AmLaw … depending on your definition of “addressed”:
What do you say to people who will look at your decision to hire 27 former Heller attorneys in early October, a month before this decision?
You take these two facts together (the Heller hirings and the layoffs), and you get a focused picture of Orrick. We’re bullish about the future, bullish about the role of lawyers in global finance, and we are boldly taking action to diversify Orrick’s practice. All of the Heller lawyers who joined us were in practice areas that are litigation-oriented. Compared with the layoffs, it’s apples and oranges. They are mostly partners, and they bring business with them.
Allow me to translate:
You see, there are these things called Apples. And man, let me tell you, Apples are the future. But unfortunately, there are these other things called Oranges, and Oranges are so obsolete, so yesterday. Really, IN THE FUTURE, the only thing Oranges will be good for is Juice. So we said, screw it man, let’s make some Juice. Let’s make some now! Because the future is now. Apples and Pulp bro’. Don’t sleep.
Other highlights from Baxter’s interview after the jump.
We have been engaged in a long-term review of our cost structure and due to improvements and efficiencies with our technology and processes, we determined that lower staffing levels are appropriate.
Meeting and exceeding our clients’ needs remains our top priority. We, like other law firms and businesses, continually strive to best position the firm. We felt it necessary to take proactive measures to align our talent with our client needs
We understand that 50 staffers were laid off: 25 from the Boston office, and 25 across all other EAPD offices. The firm said that no associates were laid off as part of this long-term review.
The firm could not provide us with information about the severance package offered to staff.
* Felons can join the Army but not the New York police force. But New York State Supreme Court Judge Henry Kron wants to change that rule for Afghanistan war veteran, Osvaldo Hernandez, who served a year on Rikers Island for gun possession before joining the Army. [New York Times]
* Former O’Melveny & Myers partner Ron Klain (a.k.a. Kevin Spacey in Recount) is Joe Biden’s pick for chief of staff. [Politico]
* Woman suing Kansas City Chief running back Larry Johnson (not Grandmama). After she rejected his advances, he allegedly spit his drink in her face, threatened her life, and ordered his bodyguards to administer a beatdown. [Courthouse News Service]
* New North Carolina senator is not a sore winner. Senator-elect Kay Hagan drops her suit against Senator-not-for-long Elizabeth Dole. Hagan had sued for defamation after Dole ran a TV ad accusing her of being “godless.” [CNN]
The Recorder is reporting that Howrey will take on 40 lawyers from Thelen’s prestigious San Francisco construction practice:
The group — which Howrey characterized as “most of the construction practice” from Thelen — includes Thelen Chairman Stephen O’Neal, construction practice head John Heisse II, D.C. office managing partner Andrew Ness, San Francisco partner David Buoncristiani (who handles matters for client Bechtel), Los Angeles partner Robert Thum and D.C. partner David Dekker. Most of the 18 partners and about 25 associates and of counsel are in San Francisco and D.C., and the rest are in New York and Los Angeles.
Hmm… Thelen attorneys, Chairman Stephen O’Neal, Howrey — where have I heard that before?
Oh yeah! You’ll remember that the Recorder initially broke the story on O’Neal’s flirtations with Howrey.
Immediately after Thelen dissolved, we mentioned possible options for the firm:
Option 1 is the plan they have arguably been pursuing: breaking up the firm practice group by practice group to interested parties. As we reported yesterday, this is the best option to save associate jobs. However, that plan is dependent on Thelen’s banks signing-off on the plan and maintaining their line of credit. Did Stephen O’Neal’s aggressive and ultimately public pursuit of his own lifeboat at Howrey scuttle that option? Once everybody is told that the managing partner could be leaving in ten days, why would other potential suitors compete for full Thelen practice groups? Instead, it’s easier to wait for an official dissolution and cherry-pick the rainmakers. This is what happened to Heller.
I’ll pause until the Thelen people stop screaming and hitting things.
Read about other Thelen landing places, after the jump.
Being well-dressed costs money. But for a lawyer, looking tailored and professional in an attractive, well-fitting suit is a worthwhile investment, Tony and Tara Costanzo say.
That message has put the 30-something married couple in business, helping several hundred clients including numerous lawyers in the New York area, order the right clothes without ever having to shop for them….
The Costanzas will meet busy clients as and where needed, and once held a clothing consultation in a courthouse restroom. Then they order the right clothes, in the right size. Ready-made suits start at just under $500; custom-made suits begin at close to $1,000 for men and $1,500 for women.
In the middle of a recession, the Costanzos — no relation to George — somehow have hordes of poorly-dressed attorneys willing to pay exorbitant prices for consultations in courthouse lavatories. When the going gets tough, the tough get new wardrobes.
Our tipster remains skeptical:
It seems as though the fashion bar would be much lower these days. After all, your adversaries are probably so worried about losing their jobs that they are likely to be wearing last year’s fashions — or other horrifyingly dated apparel, like a suit from back in the days when men were boldly exploring “skinny pants.”
I have a better idea: let’s take Michelle Obama’s self-congratulatory lead and start a recession-friendly wardrobe consulting business, to dress the desperate — but still fashion-conscious — in bargain finds from J. Crew and the Gap.
We leave you with a fashion tip for these troubled times: when it comes to skirt length, go long.
(Or maybe not? See these musings from our little sibling site, Fashionista.)
The University of Texas School of Law (tied for 16th on your U.S. News scorecards) is apparently not content with their status. They want to be elite. “They’re smart, not dumb, like everybody thinks. They’re smart and they want respect Michael!”
They think they’ve found just the right person to take them to the next level: Dean Lawrence Sager has promised to add $200 million to the UT-Law endowment by 2014. That would nearly double the school’s current endowment, according to the Austin-American Statesman.
Sager, 67, was recruited to UT in 2002 in part for his prowess in building a law school’s reputation from the ground up — something he did in his previous job at New York University’s law school. That reputation is packaged, almost disguised, by a disarming personality as exuberant as the tangled head of hair that often looks as if it will take flight. Law school staffers say they love his frequently wicked humor.
Hair and humor is all good, but $200 million? In this market? It sounds like a tough sell.
Partners at top D.C. firms are worried that they might not be getting bonuses this year, just like associates. The Washingtonian reports that management might not be able to reward their partners as they have in years past:
Usually firm managers try to lowball revenue estimates and then surprise partners with a bigger-than-expected bonus. That final paycheck will come after the first of the year, after all bills and accounts for 2008 are tallied. Many law firms are worried that adjustments will be small or that revenues will not make the estimates. So end-of-the year cost cutting has been rampant.
If associates could get squeezed out of a bonus for simply doing all the work that came across their desk, then we hope partners aren’t expecting huge payouts for bringing in barely enough rain to fill a shot glass.
It’s fashionable to call associates greedy, entitled, warm buckets of spit whenever the markets tank. But now some partners are complaining about not being able to retire to their golden encrusted nursing homes as they had planned.
Firm leaders say that some partners scheduled to retire late this year have postponed their plans because of drops in the value of their IRAs and other retirement vehicles.
Are we living in a bizzaro-world where the pain will be spread evenly between partners and associates? Read more after the jump.
We received reports this morning that Orrick, Herrington & Sutcliffe was planning to make deep cuts into their structured finance, real estate and corporate departments.
We’ve been able to confirm that Orrick is laying off 40 associates and 35 staff members today. The structured finance and real estate departments are expected to be the hardest hit. Associates were notified by chairman Ralph Baxter via email (which included a video).
Despite Orrick’s refusal to respond to our multiple requests for comment all morning, we can also report that displaced attorneys are getting two weeks notice plus five months severance. That is better than the severance package offered by White & Case on Tuesday.
Orrick was willing to speak with the WSJ Law Blog. The firm told the WSJ that they tried to avoid cutbacks for as long as possible:
Throughout 2008, we have done all we could to avoid today’s action: we have redeployed lawyers to different practices and we have cut expenses. Unfortunately, our staffing levels in the affected practices still remained too high given the economic environment our clients and we face.”
While the firm contends that these moves were taken solely in response to the economic crisis, a tipster tells us that the real reason was “to maintain PPP [profits per partner] of $1.5 million in 2009.”
So sad — and surprising. Orrick, you might remember, was one of the first major firms to raise associate salaries to $160K outside of New York. After Orrick moved, the rest of California followed: Latham, Gibson, OMM, even Thelen (kind of).
Just last month, we reported on how some firms (including Orrick) were using the market downturn as an opportunity to acquire productive lawyers and good clients. Baxter was highlighted in the WSJ article. And two weeks ago, Orrick stood behind its previously announced 2008 bonus structure.
But apparently some people had to go. We understand that the layoffs will affect multiple offices.
Update (2 PM): The firm finally sent over its statement. Check it out after the jump.
Jiminy jillickers! ATL editors are going all over the place over the next month or so. Or at least all over the Eastern Seaboard. If we aren’t heading to your neck of the woods on these trips, never fear, we may hit you up on the next time around. We’ve already hit up Houston, Chicago, Seattle, San Francisco, and Los Angeles in the past year.
Kinney Recruiting’sEvan Jowers is currently in Hong Kong for client meetings and still has a few slots available through October 22. Evan will also be in Hong Kong November 14 to December 15. Further, Robert Kinney has been in Frankfurt and Munich this week and is available for meetings with our Germany based readers.
One of our key law firm clients has referred us to one of their important clients in the US, Europe and China – a leading global technology supplier for the auto industry – in order to handle their search for a new Asia General Counsel and Asia Chief Compliance Officer.
Kinney is exclusively handling this in-house search.
This position will have a lot of responsibility and include supervision of eight attorneys underneath them in the Asia in-house team. The new hire will report directly to the global general counsel and global chief compliance officer, who is based in the US. The new hire’s ability to make judgement calls is going to be as important as their technical skill set background.
The position is based in Shanghai and will deal with the company’s operations all over Asia and also in India, including frequent acquisitions in the region.
It is expected that the new hire will come from a top US firm’s Shanghai, Beijing or Hong Kong offices, currently in a top flight corporate practice at the senior associate, counsel or partner level. Of course, the candidate can be currently in a relevant in-house role.
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