The Above the Law inbox has been on fire all morning as disgruntled (former) Schulte Roth & Zabel associates share some bad news:

Yet more lay-offs: Two groups — 13 associates so far — real estate and business transactions.

Other tipsters have used the same ominous language: “13 associates, so far.” Are there more people that are going to get the bad news from Schulte today? The firm did not respond to our request for comment, so we suppose other Schulte associates will just have to wait and see.

But let’s not get ahead of ourselves. Before we worry about how many more pink slips might be handed out today, let’s take a moment to look at the 13 we know of that have already been let go.

In these difficult times for the legal profession, it’s more important than ever to know all your options. So we resume our series on career alternatives for attorneys — jobs for J.D. holders that don’t involve working as a Biglaw associate or contract attorney.

In a prior post, we discussed the career alternative of entrepreneurship. If you’re tired of working for a boss, then become the boss: start your own company.

Today we focus on two lawyers who, interestingly enough, have started their own businesses in the same area: admissions consulting and academic coaching. Perhaps this is the start of a hot new trend? Cf. the cupcake craze sweeping the nation, which another lawyer is capitalizing on.

Adam Nguyen, formerly of Paul Weiss and Shearman & Sterling, is the president and CEO of Ivy Link. Jon Palmer, formerly of Schulte Roth & Zabel, is the president and founder of The Admissions Experts.

Both businesses are headquartered in New York — which makes sense, given how obsessive Manhattan parents can be about getting their offspring into elite educational institutions. NYC ≠ TTT!!!

Read more about these gents and their new enterprises, after the jump.

Ed. note: Above the Law has teamed up with Law Shucks. Law Shucks has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.

For a while there it would look like the first consecutive weeks without layoffs since this time last year (by our reckoning, you have to go back to the weeks ending October 9 and October 2, 2008). Alas, one firm did come through with staff layoffs, about which more after the jump.

As usual, we begin with the US macroeconomic picture, and as usual, it ain’t pretty. For the week, the S&P 500 was down about 2%. That was the second straight week of losses, and the DJIA had its biggest weekly decline in three months. 263,000 net jobs were lost in September and the unemployment rate rose to 9.8 percent, despite perhaps the technical end of the recession. As with the stock market, bad results are one thing, but results worse than expectations are another, and that was the case here. Consensus estimates were net losses of 175,000, so the actual results were way short. August’s revised numbers were slightly better than original reports, though.

The poor results are creating pessimism around when things will start to turn around:

[T]he report also buttressed fears that economic expansion would be weak and hesitant, with scarce paychecks and economic anxiety remaining prominent features of American life well into next year.

“This is a weak report,” said Stuart G. Hoffman, chief economist at PNC Financial Services Group in Pittsburgh. “The rate of job loss has tapered off, but we still haven’t reached the point where businesses are willing to hire.”

Could this create political difficulties for the president?

Just the other day, we told you that things were looking pretty good for 2Ls who want to be part of Schulte Roth & Zabel’s 2010 summer program.

That positive report is of no consolation to participants in Schulte’s 2009 summer program. It looks like those kids had the bad fortune of going to law school a year too early. Their summer program was only eight weeks long, and yesterday Schulte finally got around to making offers. A tipster reports:

We’re all talking. Seems like Schulte was about 2/3rds [offer rate] or so … We had a listserv of everyone. Seems like a ton of no offers. They did no offers first.

The two-thirds of Schulte summers who received offers were not given a start date. But the benefit of having a listserv is that they are still pretty excited to have offers in comparison to their colleagues that were rejected by the firm.

Schulte declined to comment for this story. But we understand that it is full steam ahead for summer 2010.

Earlier: Schulte Roth Feeling Good About 2011

A tipster pointed us in the direction of Schulte Roth & Zabel’s Frequently Asked Questions page for its 2010 summer program. While other firms are canceling their 2010 summer programs entirely, Schulte seems quite optimistic about its summer program. Check out the firm’s answers to three key questions every 2L is wondering about:

Will you hire more summer associates than you expect to be able to make offers to?

We will hire the number of summer associates we want for our fall class starting in the fall of 2011.

What is your summer associate salary?

In 2009 summer our summer associates were paid a weekly salary of $3,077. The salary is based on the first-year associate annual salary of $160,000.

How many weeks will your 2010 Summer Program be?

Our 2010 summer program will be 11 weeks.

The 2009 summer program at Schulte was only eight weeks long. But the firm is already committing to an 11 week summer program for 2010. And at the firm is sticking to the $160K payscale, and it’s planning on making full offers.

Schulte Roth is ranked #77 on the most recent Vault list. Arent Fox — the firm that just revoked offers to a number of its incoming associates — is ranked #76.

People sitting on a summer offer from Schulte have to feel pretty good right now.

Earlier: Fall Recruiting Open Thread: Vault 71 - 80 (2010)

We continue our slog push through the nation’s 100 top law firms, as ranked by our friends over at Vault. Here are the next ten firms, to be discussed in the comments to this post:

71. Reed Smith
72. Bryan Cave
73. Perkins Coie
74. Hunton & Williams
75. Patton Boggs
76. Arent Fox
77. Schulte Roth & Zabel
78. Howrey
79. Chadbourne & Parke
80. Crowell & Moring

Assorted observations about these firms, after the jump.

On Monday, we tossed out a blind item about future layoffs at a Manhattan law firm, mentioned in the Washington Post as a client of the Five O’Clock Club, an outplacement firm. On Tuesday, with the help of Law Shucks, we narrowed down the list of suspects.

We’re happy to report that we can advance the ball on this. Three firms should be cleared of suspicion:

1. Dewey & LeBoeuf: A spokesperson from D&L stated that it is not the firm in question and has no layoff plans.

2. Schulte Roth & Zabel: A spokesperson from SRZ stated that it is not the firm in question and has not hired a layoff consultant or outplacement consultant.

3. White & Case: A reader pointed out to us that White & Case is listed as a Five O’Clock Club client (PDF). [Update: Looks like the client list has been removed, but we downloaded it; check it out here.]

This caused us to wonder if White & Case might be the firm at issue. But White & Case denies it.

The Above the Law tips line achieved a critical mass of Schulte Roth chatter after a summer associate meeting at the firm yesterday. We’ve contacted various parties who were at the meeting and the firm itself. Here is what went down.

Over the course of the meeting Jeffrey A. Lenobel, a member of the firm’s executive committee, told summer associates that offers would not be extended at the end of the summer program. Schulte traditionally makes offers to people on their last day at the firm — and this year the firm’s summer program ends this Friday. Lenobel told associates that Schulte would be making a decision on how many offers to extend at a later date, but some summers took that as an indication that Schulte would not be extending any offers.

When we spoke to Mr. Lenobel, he assured us that some summers got the wrong idea:

Of course we’ll be making offers. We just don’t know when we will and how many we’ll be making.

But will those offers be for 2010, or will Schulte join the ranks of firms that are deferring associates to 2011? More details from Lenobel after the jump.

Maybe work is booming at Schulte Roth & Zabel? The firm is changing its vacation policy to make it more stringent. Could it be that the firm wants all hands on deck? A tipster reports the major changes:

* Personal days are now limited to 5 per year (there was previously no limit). Any days in excess of 5 count as vacation.

* SRZ previously reimbursed attorneys for nonrefundable costs associated with vacations that the firm cancelled due to work obligations. The new policy states that reimbursement will now be considered on a case-by-case basis.

* Weekend trips will only be reimbursed when the firm requires them to be cancelled if the trip has been previously approved by the partner appointed to approve vacations. The firm previously did not require attorneys to request approval for weekend trips.

Another tipster quips:

Schulte Tries Increasing Egg Production by Choking the Chicken

But it could also be that Schulte’s new vacation policy has an eye towards layoffs.

Read more, after the jump.

According to the just released AmLaw 100 numbers, Schulte Roth & Zabel ranks 10th in terms of profits per partner. The average take home for partners was $2,290,000 in 2008.

But that might not stop Schulte from cutting associate salaries.

There hasn’t been any official announcement. But according to multiple sources now, the memo is in the system. According to one of our sources:

If you search on the document system, there is a memo in there. It’s titled “Associate Salary Reduction” or something. … I haven’t clicked on it, but it seems self-explanatory.

Another tipster explained to us that nobody has clicked on the actual document. Schulte can see who opens which documents on the firm system, and nobody wants the firm to know that they looked at the internal memo.

More details after the jump.

We’re a little late in reporting this news about Schulte Roth & Zabel (just as we were the last time around). But the firm once again handled the situation quietly — stealthily, you might say — so it took us a while to get adequate confirmation and corroboration.

But we did eventually. We’re now in a position to report the following about SRZ, based on reports received from multiple sources:

1. Earlier this week, approximately 20 attorneys were let go at Schulte Roth & Zabel. Cuts were made in corporate, real estate, litigation, and possibly other departments.

2. How to characterize the cuts is unclear. It seems that some lawyers were told they were being let go for performance-related reasons, while others were told they were being let go for economic reasons.

3. The affected attorneys are receiving a two-month notice period — i.e., two months in which to find new jobs — and outplacement assistance. This is consistent with Schulte’s past practice (see our most recent severance package table).

Additional info, about the summer program and start dates, after the jump.

We’ve been receiving reports of layoffs at Schulte Roth & Zabel since last summer, but were unable to confirm them until now. These days, it can be difficult to differentiate between layoffs and performance-based dismissals.

Schulte’s spokespeople say all dismissals in 2008 were performance-based. They deny any recent layoffs in their office, saying that any departures in 2009 have been voluntary. Between 20 to 30 associates left in the fall; “approximately” 20 of them were let go for performance-based reasons after their reviews in November. The others were supposedly voluntary departures. The firm said this is not out of the ordinary and is “business as usual.”

The recent involuntary departures in Kirkland’s NYC office, which are now pegged at “at least” four associates, were described by a source there as “performance-driven, market-boosted.” That may be the most succinct phrasing we’ve heard yet.

One of those laid-off from Schulte informs us there was no severance package, though associates were given 2-3 months notice at Thanksgiving, asked to leave at the end of January or the end of February. Back in the day, that is how true “performance-based” dismissals went down. Back in the day, the firm would say, “Hey, we like you. But we don’t love you. We think you might be better off with someone else. We’ll let you hang around for the bonus, but then you should shack up with someone else.”

But these days are different. Those who were asked to leave were considered “not in good standing” with the firm. Though they were allowed to hang around ‘till January/February, they did not get bonuses or pay raises.

But enough about Schulte’s past, what do people think about Schulte’s future? Send in your stories to tips@abovethelaw.com and we’ll try to track them down.

After saying nice things about top Texas firms yesterday, our inbox was flooded today with news of a salary freeze at Fulbright & Jaworski.

As we understand it, the firm is only freezing salaries through the first quarter of 2009, so it’s a Slurpee freeze.

So much for Texas being the beacon of hope for the legal industry.

But, perhaps more surprisingly, Perkins Coie is also freezing salaries:

The 2009 economic picture remains extremely uncertain. Although we continue to have no debt and the firm is in excellent financial shape, we have determined to take a number of significant steps to ensure the firm’s financial health in 2009 for the benefit of all personnel.

The firm’s budget contemplates approximately a 10% reduction in average partner income in 2009, and partner draw percentages for January and February were significantly reduced in order to avoid any need to borrow funds. We have also frozen salaries for senior administrative staff who are evaluated on a calendar year basis. Most staff have salary adjustments on July 1 and no decision will be made on compensation adjustments applicable to them until that time.

We have also decided to hold associates at their current base salary levels. Associates will remain at their 2008 base salary for 2009, subject to two limited exceptions. Adjustments will be made to productivity build-ins for affected associates in the Bellevue, Seattle and Washington, DC offices, and changes will be made to address a few unique compensation arrangements previously scheduled for adjustment in 2009. New compensation memos will be distributed within the next few weeks.

I guess having partners that are tight with Obama isn’t enough to stave off a “solid ice” freeze. So much for unicorns.

But, after the jump, some positive news to report.

While many firms announced their decisions to freeze 2009 salaries at the end of 2008, a few waited until now to make up their minds.

Memos went out before the first paychecks of the year to associates at Atlanta-based Alston & Bird and Washington, D.C.-based Hogan & Hartson. Alston’s is a Slurpee freeze with the firm saying it may “revisit” the decision at an unspecified time this year. Hogan’s is a Solid Ice freeze; salaries are locked at 2008 levels throughout 2009.

The language of these memos has become fairly uniform— a jumble of “economic downturn,” “challenging,” “distress,” and “2009 may really suck for us.” Okay, maybe not the last phrase, but that’s the gist. Check out the memos, after the jump.

We’ve also received word that Schulte Roth & Zabel has frozen salaries until further notice, but the language leaves hope for a decision in the near future for a raise:

The firm has not yet made any decision with respect to associate salaries for 2009. We expect a decision will be made in the next few weeks, and any change will be retroactive to January 1.

Not all firms are bracing themselves for a difficult 2009 by freezing salaries. In response to our requests for salary raise information, we heard back from associates at Cleary; Stoel Rives; Perkins Coie‏; Fried Frank; Irell; and Schiff Hardin. A host of others are named in Firms that have not frozen, a post in the ATL Community section.

Memos from Alston, Hogan, and Schulte about frozen salaries, after the jump.

More bonus news today, this time from Schulte Roth & Zabel. The numbers are not surprising:

Class Year: Bonus

2008: $17,500 (pro rated)
2007: $17,500
2006: $20,000
2005: $22,500
2004: $25,000
2003: $27,500
2002: $30,000
2001: $32,500
2000: $32,500
1999: $32,500

Schulte has an hours target, but it also claims Cerberus as a major client. Cerberus owns Chrysler… so there has probably been at least a little legal work flying around SRZ.

Schulte has historically given extra bonuses to associates who go above and beyond the call of reason duty. That will not change this year. The firm announced an extra $10K for associates who hit 2300 hours, and an extra $20K for associates who hit 2500 hours. Associates who hit 3,000 hours get $20K (and their own “special” padded room).

In this market, every little bit helps. Good job by Schulte to at least keep paying their high billers a decent bonus.

Read the full memo after the jump.

A lot of people have been asking how Schulte Roth & Zabel are doing during the economic downturn. It’s a relevant question given Schulte’s large book of hedge fund business.

But even as hedge funds are slowing down, Schulte could get a lot of work thrown their way if there is any fire to these G.M./Chrysler talks. According to AmLaw Daily Cravath is advising G.M. during the preliminary merger talks, while Schulte is advising Chrysler.

The high profile M&A work is being thrown Schulte’s way because of their longstanding relationship with the private equity giant Cerberus:

[Cerberus] bought Chrysler from Stuttgart, Germany-based Daimler for $7.4 billion in 2007—roughly $30 billion less than Daimler paid for the company in 1998.

In fact Cerberus could be the key to the whole deal:

[P]eople close to the merger talks said that Cerberus had proposed to contribute cash to GM-Chrysler in addition to the estimated $11 billion in reserves that Chrysler has on its books. In return, Cerberus would receive equity in the combined company and become a large shareholder.

It’s important to remember how young Schulte Roth is, having just been established in 1969 (compared to Cravath’s nearly 200 year history). A huge deal like this probably won’t offset the general slow down in hedge fund work, but it does show that Schulte has a couple of clubs in the bag to get through the current downturn.

Cravath, Schulte Roth Involved in GM-Chrysler Talks [AmLaw Daily]
Cerberus’s role crucial as GM-Chrysler merger talks continue [International Herald-Tribune]

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

So far this summer has been a little slow in terms of juicy summer associate stories. Are SAs this year just too well-behaved for their own good? C’mon, kids — lighten up, have some fun, drink a little (or a lot) at firm events….

Almost three weeks have passed since our last summer associate tale. So we were delighted to receive this gift in our inbox today, pertaining to a summer at Schulte Roth & Zabel in New York:

[A]t a summer event last night, one the Schulte summers — let’s call him Randy Savage — unaware of the identity of a particular stranger, put him in a headlock and called him a (homophobic insult redacted) for wearing a Yankees jersey.

The stranger then asked Randy Savage: “Do you know who I am?” Randy Savage replied: “No, you punk.”

Said “punk” turned out to be a Schulte partner. The fate of Mr. Savage is currently unknown.

Clearly it’s the partner’s fault for not looking sufficiently partner-like. It happens; we know some junior partners who still get carded. We hope the SRZ folks cut the guy some slack and keep him around, so he can proceed to embarrass himself at future events.

We reached out to the firm this morning to see if they might have any comment. They haven’t gotten back to us as of the time of this posting.

As always, please don’t name this summer associate or provide more biographical detail about him (e.g., his law school). If you do, we may ban your IP address from further commenting. Thanks.

Update: This comment from Dr. Gonzo says it all: “SNAP INTO A PARTNER!!!”

The Magic Circle law firm of Allen & Overy, defendant in Schoenfeld v. Allen & Overy, has just filed its Answer (PDF). They’re hoping to make Norman Schoenfeld’s claims disappear. Schoenfeld, an observant Jewish lawyer who once worked at the firm, alleges that A&O discriminated and retaliated against him as a result of his observing the Sabbath.

We contacted the firm for comment. Here is their statement:

Allen & Overy denies all allegations of discrimination. This person’s employment was terminated based solely on performance within his orientation period, a trial period of time mandated for all employees. He also failed to disclose to Allen & Overy the fact of his previous employment at another law firm.

Our firm has a strict written policy prohibiting any form of discrimination, and we provide all new employees and partners training in both diversity awareness and harassment prevention. Over the past several years, we have also instituted live diversity training for all of our existing attorneys and managers. We will vigorously defend our proud reputation of diversity and inclusion and are confident of a positive outcome for Allen & Overy with respect to these allegations.

More discussion, including interesting information from tipsters, after the jump.

Update (5/9/08): The case is settling. See here.

There’s no major movement to report on the base salary front, but clerkship bonuses continue to climb. The latest firm to raise its clerkship bonus, from $15K to $50K (or $70K for two clerkships): Schulte Roth & Zabel. From their website:

Upon arrival at the Firm directly following an eligible one-year clerkship, associates receive a clerkship bonus of $50,000. Those who join us directly following an eligible two-year clerkship (or two successive eligible one-year clerkships) will receive a bonus of $70,000.

If you are aware of clerkship bonus news that we haven’t previously reported — you can check what we’ve covered before by doing a site search — please email us. Thanks.

Careers: Judicial Clerks [Schulte Roth & Zabel]

(Gavel bang: commenter.)