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lawyers hanging on.JPGAre you still trying to catch your breath from the bonus announcements at Skadden and Half-Skadden (f/k/a Cravath)? Or are you waiting patiently for S&C to “settle” this bonus debate among top firms? Either way, most people are still just trying to understand why Cravath low-balled the market yesterday.

A couple of days ago we mentioned a theory that has become very popular over the last 18 hours: firms are going to give low bonuses to look responsible to their clients. On Tuesday, we explained the theory like this:

So, reason one: If they give you a bonus, you might tell someone, um, like Above The Law. And reason two: pressure from clients to control costs. Anonymous firm leaders say they fear the effect a big bonus announcement would have on their fee negotiations with belt-tightening clients, especially those in the financial sector.

Some people really believe this is happening, and are using Cravath’s bonus announcement as Exhibit A. One tipster even asked ATL to “stop reporting bonus information.”

But while we can’t know what kind of paranoia is gripping law firm leaders at the moment, we’re pretty sure that clients don’t actually care about associate bonuses.

Our friends at What About Clients attacked this issue yesterday:

So ATL also asks in the post, what about clients? Should great clients care about associate bonuses this year–this evil and financially difficult one of 2008–more than any other year?

The answer: absolutely not.

More analysis after the jump.

double red triangle arrows Continue reading “Do Clients Care About Associate Bonuses? Answer = No”

Fried Frank Harris Shriver Jacobson LLP Abovethelaw Above the Law blog.jpgWe’ve gotten credible information that Fried Frank has laid off at least 15 associates from their corporate department, including 6 in the real estate practice group. A tipster collects the information in a clear way:

They are veiled as performance-based reviews, but virtually everyone is getting a negative review (mostly, it seems, to justify in a paper-trail [a decision] to not give bonuses)….

There has been no formal review process announced, and no one knows what directive came from management last weekend at the partner retreat, but it seems that each group was told to make cuts. People were completely taken off guard when they started getting calls earlier in the week calling them in for their reviews, some of which dredged up years-old information to use as justification for lay-offs, and many of which lasted only 5 minutes or so. Most of the layoffs have been mid-level associates and up, but most junior associates have not yet been reviewed.

The axe is expected to fall on the litigation side of the firm today.

The firm has not responded to voice messages or emails left earlier today. The number of layoffs could be higher than what we are reporting, but right now the best number is 15.

We understand that a three-month severance package has been offered.

Every single tipster (and there are a lot of them) said that the laid-off attorneys were told that they were being let go for performance reasons.

But that’s not all they were told. Read the rest, after the jump.

double red triangle arrows Continue reading “Nationwide Layoff Watch: Stealth Layoffs at Fried Frank”

public defender.JPGATL has been providing in-depth coverage of firm layoffs, but we haven’t written much about public defenders suffering the same fate. With state budgets experiencing big squeezes, public defenders’ offices across the country are getting downsized, while their caseloads are getting upsized.

We wrote about layoffs in Kentucky, Minnesota, Florida, and Georgia back in July. In at least seven states, “public defenders’ offices are refusing to take on cases or have sued to limit them,” says the New York Times in an editorial today. It suggests that the constitutional right to counsel in state criminal proceedings is “hanging by a tattered thread:”

In a disturbing example of legal triage, a Florida judge ruled in September that the public defenders’ office in Miami-Dade County could refuse to represent many poor defendants arrested on lesser felony charges so that its lawyers could provide a better defense for other clients. Behind the ruling were some chastening statistics: Over the past three years, the average number of felony cases handled by each lawyer rose from 367 annually to nearly 500. Misdemeanor case loads rose from 1,380 to 2,225.

Public defenders’ offices all over the country are reporting similar problems. The immediate result is that innocent defendants may feel pressure to plead guilty. There also is an increased risk of wrongful conviction, which means that the real offenders would go free.

The NYT recommends meeting the budget shortfall by increasing the state registration fees for lawyers and expanding pro bono representation by the private bar.

Another out-of-the-box solution would be to get rid of all those pesky drug laws.

Remember to send in all of your layoffs stories and worries to tips@abovethelaw.com.

Hard Times and the Right to Counsel [New York Times]

Earlier: D.C. AG Office Faces Lawsuit After Firing Attorneys (And News of Layoffs For Public Defenders in Other States)


Muskasey alert and talking.JPG* Mukasey is going to be okay. He’s telling jokes and talking to the President. A GW doctor said “”The attorney general is conscious, conversant and alert.” [CNN]

* Do you feel sorry for sex offenders? The California 4th district court does. They ruled that Jessica’s law, a law that prohibits sex offenders from living within 2,000 feel of a school or park constitutes “banishment under another name.” [San Francisco Chronicle]

* “A U.S.-triggered spate of global carmaker-bailout proposals may spark trade disputes over whether the Americans are unfairly trying to subsidize their industry or just making up for state aid foreign rivals already enjoy.”[Bloomberg]

* Meanwhile, the EU’s antittrust chief says the EU should resist an auto-industry bailout. [Bloomberg]

* On Thursday, a federal judge ordered the release of five Algerian prisoners from Guantanamo Bay, Cuba. [Los Angeles Times]

* If you’ve been following Proposition 8, you may want to watch an upcoming gay marriage case that will be coming before the Iowa Supreme Court. [Iowa City Press Citizen]

animated siren gif animated siren gif animated siren gif drudge report.GIFATL correspondent Laurie Lin, on the scene at the annual dinner of the Federalist Society, reports that Attorney General Michael Mukasey “literally collapsed mid-sentence at the podium,” while delivering a speech at the Society’s National Lawyers Convention. It is not clear what AG Mukasey suffered, but a stroke is possible.

“Medical people are working on him now as he lies on the dais,” according to Lin. “Secret Service FBI says no one can get up. Entire hall is shocked and silent.”

Michael Mukasey small Chief Judge Michael B Mukasey SDNY Above the Law blog.jpgUpdate (10:38 PM): “They appear to have an IV in. They have taken him out. Now people are praying…. Everyone is saying it looked like a stroke. People are very somber. Some people from the DOJ are visibly shaken.”

Update (10:47 PM): According to radio reports, Mukasey did not immediately regain consciousness after collapsing, and was taken to an area hospital. More from Politico over here.

Update (11:03 PM): According to a different source, Mukasey had regained consciousness by the time he was taken out of the room.

Update (11:06 PM): People are now being allowed to leave the room. From Laurie Lin: “The party ended abruptly, needless to say. The tone of the man [perhaps David McIntosh] who prayed after they took out the AG seemed pretty grim. He asked for prayers for Mukasey’s wife, who was there according to the program, and the Mukasey family.”

More updates after the jump.

double red triangle arrows Continue reading “Breaking: Attorney General Mukasey Collapses at Federalist Society Dinner”

The world we live in.JPG* “Did you know that the first Matrix was designed to be a perfect human world? Where none suffered, where everyone would be happy. It was a disaster. No one would accept the program. Entire crops were lost. Some believed we lacked the programming language to describe your perfect world. But I believe that, as a species, human beings define their reality through suffering and misery. The perfect world was a dream that your primitive cerebrum kept trying to wake up from. Which is why the Matrix was redesigned to this: the peak of your civilization.” Just take a look at Cravath’s bonus memo from last year and read the happy comments. [Above The Law]

* A Houston based law firm is getting Miley Cyrus to perform at their holiday party. Yes, “harvest” should be even better next year. [Legal Blog Watch]

* A lawyer found a job! Sure, it was Paul Clement, and the job was at King & Spalding. But hey, a job’s a job. [WSJ Law Blog]

* Janet Jackson. Boob. Court. Holy crap did you guys see that Skadden is paying double bonuses compared to Cravath? [SCOTUSblog]

animated siren gif animated siren gif animated siren gif drudge report.GIFIf you work at Cravath, Swaine & Moore, prepare to be very, very angry. From the bonus memo just issued by presiding partner Evan Chesler:

Both 2006 and 2007 were extraordinary years for our Firm. In 2006 we paid large year-end bonuses to our associates, and in 2007 we further supplemented those bonuses. As a result of the deterioration of the business environment, the Firm’s financial performance in 2008 will not be in line with those earlier years. While the Firm believes that we should pay year-end bonuses this year, in light of the current business climate we do not think it is appropriate to pay the full bonuses that were paid in 2006 and 2007 or the additional supplemental bonuses paid in 2007.

Just yesterday, Skadden announced that they would match the 2006/2007 bonuses less the “special” bonus paid in 2007. For Cravath to come in under that number is pretty surprising. The official Cravath bonus structure for 2008 is as follows:

law firm associate bonus watch 2008 biglaw bonuses.jpgClass 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 — $30,000

Suddenly, the question is no longer “Is Skadden the ceiling?” Instead, we must ponder “Is Cravath the floor?”

Done being angry? Okay. Now prepared to get very, very frightened:

Given the uncertainty of the economy and the business climate going forward, we will not be able to address the issue of whether there will be any year-end bonuses in 2009 until this time next year. However, associates should be prepared for the likelihood that the economy and the Firm’s financial performance next year will not show a significant improvement over this year and they may receive significantly reduced or no year-end bonuses next year.

Update (6:22 PM): Of all the tips that have crashed ATL’s inbox in the last 45 minutes, this one best captures the raging rage people are feeling:

WTF does Cravath think it’s doing? They’re basically threatening no bonus for NEXT YEAR? They’re not being Nostradamus, they’re trying to force people out. Cravath associates will get that memo, collect their garbage 2008 [bonus] and lateral the hell out before they get screwed again.

Why not just conduct stealth layoffs? Forced attrition is the same thing. Go home, Cravath. You’re embarrassing yourself.

Read the full memo after the jump.

double red triangle arrows Continue reading “Associate Bonus Watch: Cravath Offers Less Than Skadden”

mayer brown logo.JPGHaving had the opportunity to tell all affected associates, Mayer Brown is ready to publicly confirm the extent of the firm-wide layoffs that took place today:

Despite the current conditions in the worldwide financial markets, Mayer Brown is having a strong year, with an increase in gross revenues. Most of our practice areas are performing well. We have benefited greatly from our practice area and geographic diversity, including our recent

merger with JSM in Asia. However, as is the case in all other comparable law firms, some of our practice areas have been adversely affected by the slowdown in economic activity.

Accordingly, we have asked 33 lawyers and some support and administrative staff in our US offices to leave the firm. This reduction does not include lawyers who were asked to leave this year through our performance review process.

Those affected by this decision are good lawyers who have made valuable contributions to the firm. We intend to give them access to outplacement services and other benefits and a substantial period of time to find another job.

How many lawyers have left during the performance review process? The firm declined to say.

The firm also declined to break down the layoffs by office, but we’ve learned that New York and Charlotte were the hardest hit.

Multiple tipsters have reported that the decision was driven by Chicago management, not the branch office partners.

More after the jump.

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squire snaders staff attorney offers.gifMore bad news today, this time from Squire Sanders.

Multiple sources reported massive layoffs at Squire Sanders yesterday. The firm has confirmed that 30 associates and paralegals were let go:

We have completed annual reviews of all of our associates and, as a result of that process and with regret have advised some of our associates that they should explore career opportunities elsewhere and we are giving them time to do so. About 30 associates and paralegals will be affected firmwide,including three associates in Phoenix. This is a higher number than usual leaving following performance reviews. Admittedly, current and projected business conditions influenced the timing of these decisions. Like all firms, we are forced to align our resource capabilities with project client service levels and make some hard personnel decisions. That may sound harsh to some and sound like a ‘lay off’ to others but we are working closely with all professionals affected and providing support and assistance.

The Phoenix news is significant. Markets like Phoenix (and Tampa, another Squire branch location) are hurting (because of the housing market) but have not yet felt the brunt of Biglaw layoffs.

We understand that the targets of the cuts were more expensive senior associates. We don’t have any word on what severance package Squire Sanders is offering.

From the firm’s statement, it looks like another case of “forced attrition.”

After the jump, we look into the recent past of Squire Sanders.

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sandra day o'connor 2 justice o'connor.jpgIt has been a while since our last Eyes of the Law legal celebrity sighting, so here’s a fun one for your consideration. A D.C. tipster tells us:

We saw Sandra Day O’Connor in the Smithsonian American Art Museum’s exhibit on Georgia O’Keeffe and Ansel Adams. She had on the same red sweater she can be seen wearing in photos dating from the late ’90’s hanging on the wall at Georgetown. I guess the retired justice pension package isn’t as generous as I thought. Or she just really likes that sweater.

SOC was accompanied by two women in their late 20’s or early 30’s… possibly granddaughters, possibly ex-clerks. We didn’t detect any particular resemblance — neither was wearing a red sweater that looked as though it might have been knitted or handed down from grandma.

Old people and museums: perfect together. Please pass the Bengay.

Georgia O’Keeffe and Ansel Adams: Natural Affinities [Smithsonian American Art Museum]

Brown Rudnick logo.JPGThe Boston-based law firm Brown Rudnick is the latest to sacrifice associates to the global economic crisis. Yesterday they parted ways with 20 attorneys, 3 paralegals, and 20 other staffers.

But the anticipation might have been worse than the hammer. Brown Rudnick told associates they were laying people off before anybody was actually laid off. This firm-wide email went out yesterday:

I regret to inform you that today we are having a layoff. Layoff notifications have begun this morning and will continue until approximately 4:00 PM ET today. This action will affect just under 10% of our attorneys, paralegals and staff….

Out of respect for those who are being laid off, we are unable to share more information with you at this time, but we will answer your questions when the notification process is complete. Please refrain from approaching members of the Management Committee, Managing Directors or Administrative Directors, prior to 4:00 PM ET, with questions about the layoff, as they, too, need to honor the privacy of our colleagues.

Everyone who is impacted by today’s action will be receiving severance and outplacement assistance. No other layoffs are planned after today.

The Firm remains strong. Today’s action is intended to better align our staffing with current work levels at the Firm and to position the Firm to be successful in this challenging economic environment.

… [W]e will be holding two meetings in the Boston Event Center later today with video connection to Hartford, New York, Providence and Washington. I encourage you to attend these group meetings. I will answer your questions at that time.

That’s a tough day. Waiting by your phone to learn if you still have a job.

After the jump, it was all over by 4:00 p.m.

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Nick Thompson Ultimate Fighter.jpgIn July, we wrote a post on How Not To Spend the Week Before the Bar Exam. A University of Minnesota law grad, Nick “The Goat” Thompson, had been featured in a Sports Illustrated article on an ultimate fighting EliteXC tournament broadcast on CBS. Thompson had lost his match, but had a good excuse: studying for the bar exam had likely cut into his training time. He took the Minnesota bar two days after the match.

We forgot about this article until last month, when his wife e-mailed us to share the good news that Thompson had passed the bar (as did 89% of test takers.)

We talked to Nick last weekend about what’s it like to be a professional mixed martial arts fighter, esquire. Find out how he’s combining ultimate fighting with a law degree, after the jump.

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