Shearman & Sterling declined to comment on the rumors of "performance based" layoffs we reported on, yesterday. However, they did want to comment on our characterization of their faltering corporate practice:

The current environment has presented significant opportunities for Shearman & Sterling across its platform. We have been involved in many of the most complex situations that have arisen in recent months and continue to be active on a large number of those transactions throughout the world, including the sale of Merrill Lynch to Bank of America, Allianz's sale of Dresdner to Commerzbank, numerous engagements for financial institutions and hedge funds arising under the Lehman insolvency (including our worldwide representation of Bank of America), and Hypo Real Estate in its German restructuring. We also have seen a substantial increase in the demand for our litigation and international arbitration practices. In response to your comments, activity levels in our Capital Markets practice have indeed slowed somewhat, as they have at all major firms, but other practices, as evidenced above, are very busy. Consistent with our normal practice, we are actively allocating associate staffing to areas of the firm where there is the greatest need.

So, there's that. We'll try to keep on top of how Shearman's performance reviews go as they get started over the next couple of weeks.

Earlier: Nationwide (Stealth) Layoff Watch: Shearman & Sterling and Loeb & Loeb

We've been hearing reports all morning about some news leaking around the offices at Shearman & Sterling. One tipster collects the potentially bad news in a clear way:

[M]id and senior-level associates that would in normal economic conditions have left any way are being asked to leave. In addition, Shearman's senior management has advised Partners to be strict in reviews in the upcoming review process (scheduled for the coming weeks) for all levels of associates (not only mid- and senior-levels).

Apparently, the firm is determined that any layoffs get reported as "performance based" attrition rather than full-on layoffs. Sources suggest that firm leadership is still smarting over the reputation hit they took when they laid off people, back in 2001.

The firm has not responded to a request for comment.

Whatever they want to call it, there seems to be good reason for Shearman associates to be worried over the next couple of weeks. We've also learned that Shearman's Capital Markets practice is not doing well. A tipster reports:

Business in Capital Markets has slowed dramatically over the past several months. Junior associates from Capital Markets have been temporarily staffed on litigation matters.

We know that Capital Markets practice groups are slow all over. But staffing corporate attorneys on litigation work suggests that there are larger problems with Shearman's corporate practices.

Stealth layoffs at Loeb & Loeb, and the firm's response, after the jump.

We're back with our second installment of the Legal Eagle Wedding Watch in as many days. Enjoy, and have a happy, happy Friday.

Behold, the most outstanding legal lovebirds from the past three weeks:

1. Brenda Zelin and Kyle Williams

2. Alyssa Greenwald and Edward Wittenstein

3. Erik Hyman and Max Mutchnick

4. Jamie Bartholomew and Steven Aller

Evaluate the worthiness of these couples, after the jump.

The New York Times reports on a growing trend in American business: the cancellation of holiday parties. With the stock market having finished its worst month since 1987, and with layoffs running rampant, there's not much to celebrate. People, this is no time for egg nog.

Law firms that have canceled holiday festivities include DLA Piper (Chicago) and Fried Frank. Financial firms going Grinch include Morgan Stanley, Barclays, and American Express.

But some law firms won't be bullied into relinquishing the Christmas spirit. From the NYT:

[S]ome companies see holiday gatherings, whatever the style and scale, as an important hedge against sagging morale -- particularly at a time when raises and bonuses will likely be scarce.

"It's important to get people together for a little social event at that time of year, especially when it's been as tough a year as this," said Peter Horowitz, a spokesman for the Wall Street law firm Shearman & Sterling, which is planning holiday lunches and dinners at less expensive restaurants this year. "But at the same time, you have to make sure that you don't go overboard."

Perhaps this bodes well for bonuses at Shearman? Hopefully S&S stockings will be filled with cash and not coal.

Or are holiday parties the opium of the masses for Biglaw? Throw everyone a big party, with lots of booze, then announce low bonuses the next day, when they're too hungover to complain?

Forget Caviar: Holiday Parties Feel the Pinch [New York Times]

The Lawyer reports that Allen & Overy might be in merger talks with Shearman & Sterling:

A&O is occasionally tempted by the thought of a market-busting merger. It approached Freshfields back in 2006, as exclusively revealed in The Lawyer (see story).

Senior partner David Morley is moving to New York next week for three months (see story). This is being taken in New York as proof that a deal is in the offing.

A&O has nicked a whole load of Shearman's Germans - though by rights this ought to rule out a deal with the rest of the firm.

Shearman needs help. (Actually, this is incontrovertible.)

After the jump, could this actually happen?

In case you hadn't heard, Wall Street is in meltdown mode right now. Our colleagues over at Dealbreaker have been working over the weekend and around the clock to cover all the latest developments.

Here are the two big stories from the financial world. First, the top-level parent company of Lehman Brothers, Lehman Brothers Holdings Inc., is filing for Chapter 11 bankruptcy protection. (But no sleeping in for Lehmanites; they have been informed that they're still expected to show up to work this morning.)

Second, Merrill Lynch, the investment bank that some feared might be next to go down the Bear Stearns / Lehman Brothers path, has reached a deal to sell itself to Bank of America, for $50 billion.

What do these deals mean for lawyers? Well, at least in the short term, they bring good news: more work. (Over the long term, of course, the news may be less good, as current and potential future clients vanish from the landscape on Wall Street.)

For its bankruptcy, Lehman is turning to Weil Gotshal & Manges, long known for its top-notch bankruptcy practice. From Dealbook:

Lehman has hired Weil, Gotshal & Manges, the law firm that handled Drexel [Burnham Lambert]'s bankruptcy filing [in 1990]. Harvey Miller, the head of Weil's restructuring practice, is known as one of the deans of the bankruptcy bar.

In addition, Lehman is trying to sell its more valuable assets, including its broker-dealer and asset-management operations. It appears to be represented in those efforts by Sullivan & Cromwell, according to TheDeal.com (subscription).

Meanwhile, Wachtell, Lipton, Rosen & Katz, a powerhouse in financial-institutions M&A, is getting a piece of the action on the Merrill deal. As reported by the Wall Street Journal, the Merrill / B of A deal was hammered out in "a marathon series of meetings at Wachtell, Lipton, Rosen & Katz, the law firm which has long represented Bank of America in its deals."

Wachtell isn't lending out their offices for free. As TheDeal.com reports, WLRK is indeed representing Bank of America in the transaction (for a fee that will be well into the eight figures -- Ed Herlihy doesn't come cheap). Merrill Lynch is being advised by Shearman & Sterling.

If you're aware of other winners and losers from these deals, please share what you know, in the comments.

Lehman Announces Bankruptcy Filing For Holding Company [Dealbreaker]
Bank of America Reaches Deal To Buy Merrill Lynch [Dealbreaker]
What a Lehman Bankruptcy Filing Might Look Like [DealBook]
Bank of America to Buy Merrill [Wall Street Journal]

Reasons for reading ATL vary from person to person. But we have been told by some people that one of the greatest benefits of following the site is gaining familiarity with law firms and the differences between them.

In that vein, we shall continue on with our series of open threads on the Vault 100. (Sorry, haters! Though we are taking under advisement the idea that we list them in groups of ten from this point forward.)

Here are the next five, with prestige scores in parentheses:

16. Gibson, Dunn & Crutcher LLP (7.056)
17. Wilmer Cutler Pickering Hale and Dorr LLP (7.055)
18. White & Case LLP (7.054)
19. Shearman & Sterling LLP (7.043)
20. Arnold & Porter LLP (6.905)

Of the five, White & Case has the most bizarre list of notable perks: "Gender- and reason-neutral flexible work arrangement program" (what does that mean?), "Cold, anonymous" (yippee?), and "Dinosaur" (the ferocious or the fossilized kind?).

Time to compare and contrast. We invite you to have at it.

Earlier: Vault 100 Open Threads- 2009

Last week we covered some goings-on -- or non-goings-on, to those of you who found them boring -- at Shearman & Sterling. Here's a quick update.

We reported that, according to the firm, there have been no staff layoffs. One source writes:

I'd like to know how they define administrative staff, as they laid off their entire word processing / document production center (i.e legal word processors, proofreaders, EDGAR operators, and supervisors) in February 2007. It has since been disastrously outsourced....

Outsourcing from a year and a half ago isn't what we had in mind when we asked about recent layoffs. But we pass that along, for what it's worth; we do aim to be accurate.

In the comments, there were some rumors about start dates for 2009 associates. We're looking into the rumors and will report back. If you can confirm, please email us.

Update: We're still waiting for official word from the firm, but one Shearman offeree confirms that yes, start dates for incoming associates next year will be no earlier than November 30, 2009.

Finally, we wondered whether there might be an interesting story surrounding the one out of 140 summer associates who didn't get an offer. It turns out that there is.

Find out what it takes to get no-offered by Shearman these days, after the jump.

Lately we've been hearing various rumors about Shearman & Sterling. Some appear to be true, and some not.

Here are the rumors, followed by the firm's responses, in blockquotes.

1. Have start dates for incoming first-year associates been pushed back?

Start dates for incoming first-year associates for fall 2008 are October 6, 20, 27 and November 3.

We don't know what the 2007 start dates were (and the firm didn't provide them), but we're guessing they were earlier. But the 2008 start dates are not particularly late. Compare them to these firms' postponed start dates.

2. Have there been any layoffs at the firm, of lawyers or staff?

There have been no lay-offs at Shearman & Sterling, of either attorneys or administrative staff.

This makes sense to us. Shearman did layoffs back in the early 2000s, which it later came to regret, when memories of the layoffs harmed the firm's recruiting efforts once the economy came roaring back. So, having learned their lesson, we'd be surprised to see mass layoffs from Shearman now.

(But we wouldn't be surprised if there have been some performance-related dismissals lately, especially on the corporate side.)

3. Did the firm make offers to all of its summer associates?

(We had previously heard, through the grapevine, that the firm had 135 summer associates and made offers to all of them.)

This summer we had 144 summer associates. There were four summer associates whose academic commitments precluded their joining the firm in fall 2009. We made entry-level offers to all but one of the summer associates available to join the firm.

Based on the high percentage of offers to summers, north of 99 percent, it seems that Shearman is doing just fine these days. But we are curious about that one SA who got no-offered.

Might there be a juicy but undiscovered summer associate scandal? Perhaps a new and improved version of the Shearman & Slur-Man? If you have info, feel free to email us.

(If it's garden-variety incompetence, that's of little interest to us. But if there's an entertaining or salacious tale, we'd like to hear about it. Thanks.)

Earlier: X-Summers: Shearman & Slur-Man

This summer associate (or "vacation schemer") story comes to us from across the pond. An attorney in the London office of Shearman & Sterling had an interesting take on appropriate summer associate events.

Legal Week reports that a bunch of Shearman partners and attorneys took the "trainees" out to the bars one Friday last month. As the night wound down, one of the attorneys decided to take a female summer to The Windmill (NSFW). Not a wise decision:

Shearman & Sterling has dismissed an associate in its London office after a vacation scheme student made a formal complaint about his behaviour during a night out.

The student, who has subsequently accepted a training contract position with another firm, lodged a formal complaint to Shearman alleging that she was taken to Soho strip club The Windmill by the associate last month.

An internal investigation at Shearman has resulted in the associate in question being dismissed for bringing the firm into disrepute.

The attorney in question should have done more to defend himself. He could have cast this as a highly reputable outing... or at least a little bit reputable. The Windmill is not just any old strip club; it's an historic strip club. From its (NSFW) website:

Great Windmill Street in London's Soho... where Laura Henderson was to create her world famous theatre staging the first nude stage shows in London in 1931....

[A] host of great British comedians began their careers at the Windmill. Among them were Peter Sellers....

[T]he story of Mrs. Henderson has been made into a hugely successful film starring dame Judi Dench, nominated for Hollywood's presige's [sic] Oscar."

We'd think that mentioning the names 'Peter Sellers' and 'dame Judi Dench' in England would lead to all being forgiven.

Perhaps it would have been wiser to take a male summer, who could have better appreciated the "historic nature" of the club. But hey, you never know. Some female summer associates, far from having a problem with strip clubs, actually enjoy performing at them.

Shearman sacks associate after student strip club complaint [Legal Week]

Earlier: Summer Associate of the Day: Girl Gone Wild

In the comments to our recent post about the large summer associate class in the Chicago office of Skadden, one commenter accused us of "ignoring the massive overhiring of summers at dozens of firms." We plead not guilty, noting that the comment was itself appended to a post about alleged overhiring at Skadden.

But, inspired (or perhaps goaded) by this comment, we've decided to create an open thread on the subject of overly large summer associate classes. Firms with XXL summer classes are the ones where summers are most anxious about not getting a full-time job offer at the end of the program. And it's probably true that, all things being equal, you're more likely to get no-offered at a law firm whose 2008 summer associate class is dramatically larger than its 2007 summer associate class. (Note the qualifier "all things being equal" -- it could be that the firm or office, like Skadden in Chicago, is busy and making a deliberate effort to grow.)

In the comments to the Skadden - Chicago post, a few firms were fingered as having super-big summer associate classes this year. We followed up on some of them, using the NALP Directory.

Many of the firms mentioned by commenters do have 2008 summer classes that are substantially larger than their 2007 summer classes. One reader pointed to Cravath, Swaine & Moore; Shearman & Sterling; and White & Case. According to the NALP Directory:

Cravath: Summer 2Ls considered for associate offers in 2007 who received offers: 91 out of 91. Summer 2Ls in 2008 = 161. Increase in summer class size: 77 percent.

Shearman: Summer 2Ls considered for associate offers in 2007 who received offers = 75 out of 75. Summer 2Ls in 2008 = 134. Increase in summer class size: 79 percent.

White & Case: Summer 2Ls considered for associate offers in 2007 who received offers = 40 out of 40. Summer 2Ls in 2008 = 114. Increase in summer class size: 185 percent.

One commenter claimed that Alston & Bird in Atlanta had "way overhired." But in 2007, they had 50 summer 2Ls who were considered for associate offers (and made offers to 48 of them). In 2008, they have 51 summer 2Ls -- not exactly a massive increase.

Has your firm overhired for its summer program? Are you worried about not getting an offer at the end of the summer -- which is just around the corner? Feel free to share, in the comments

Update: One of you notes, and properly so, that "a firm can overhire for a summer even if it hires less summers than the year before -- for example, if the economy has tanked and every other law firm in the city is cutting their summer classes by 30% or more. So, yes, A&B overhired."

We don't know exactly how things are going at A&B in Atlanta these days. But we've heard some interesting things. If you think you know what we're talking about, please drop us a line.

Earlier: Skadden in Chicago: Too Popular For Its Own Good?

It didn't make our final four. But this wedding announcement, featuring an heir to the great Swingline Stapler fortune, gives us an opportunity to note that there is -- who knew? -- more than one way to staple something.

We recently learned that you can rotate a plate on the bottom half of your stapler, thereby causing the hammer to press the staple out instead of in and "pinning" the document together temporarily. Minutes of fun, people!

Back to business. Here are this week's newlywed entrants:

1. Alyson Evans and James Beha II

2. Jennifer Brosnahan and Kevin McIntyre

3. Kristen Eichensehr and Richard Ré

4. Amanda Kosonen and David Schleicher

Read up on these fabulous contestants, after the jump.

Last year, Viacom filed a $1 billion suit against Google-owned YouTube, asserting widespread copyright infringement. We predicted a smackdown, and that day has come.

Viacom filed an amended complaint [PDF] last month, saying it had found over 150,000 unauthorized clips of copyrighted material on YouTube. In its answer [PDF], Google says YouTube responds properly when made aware of copyrighted content, and said Viacom's suit threatens our way of life... pretty much. From the Associated Press:

A $1 billion copyright infringement lawsuit challenging YouTube's ability to keep copyrighted material off its popular video-sharing site threatens how hundreds of millions of people exchange all kinds of information on the Internet, YouTube owner Google Inc. said.

Google's lawyers made the claim in papers filed in U.S. District Court in Manhattan as the company responded to Viacom Inc.'s latest lawsuit alleging that the Internet has led to "an explosion of copyright infringement" by YouTube and others.

The back-and-forth between the companies has intensified since Viacom brought its lawsuit last year, saying it was owed damages for the unauthorized viewing of its programming from MTV, Comedy Central and other networks, including such hits as "The Daily Show with Jon Stewart."

It's sad that MTV no longer has the spirit of rock-and-roll rebellion and has officially become The Man.

In Google's corner are Wilson Sonsini, Mayer Brown, and Bartlit Beck. In Viacom's corner are Jenner & Block and Shearman & Sterling.

Google vows not to settle, saying it will take the case to the Supreme Court if necessary. Let the law firms rejoice!

Google: Viacom's YouTube suit threatens freedom [Associated Press]
Google's Answer To Complaint [PDF] [IP Democracy via Paid Content]
Google vows to keep fighting Viacom [Business Week]
Google Case Spells Windfall For Lawyers [Forbes]

Earlier: Coming Attractions: Viacom - YouTube - Google Smackdown

Here's a follow-up to last week's post about associate salaries in London. It sounded some pessimistic notes, but maybe the pessimism was unwarranted. From Legal Week:

Shearman & Sterling has announced an increase of 7 percent in its London associate salaries, putting the firm's rates well ahead of those at top U.K. firms. The rises mean a newly qualified solicitor based at the firm's London office will get paid 80,000 pounds ($157,976), up from a figure of 75,000 pounds last year. Senior associates will receive salary increases on a discretionary basis, with the base salary level moving up to 170,000 pounds ($335,699) a year.

Trainee solicitors will also get a bump-up from the review, with first-years now pocketing 39,000 pounds ($77,013) -- up from 36,500 pounds -- and second-years in line for 41,500 pounds ($81,950). The increases will make them among the highest-earning trainees in London.

Remember, however, that these figures are for U.K.-qualified lawyers. As one commenter noted, U.S. lawyers working in London, whether for U.S. firms or Magic Circle firms, generally do better. For more discussion, see here.

Linklaters has followed suit:

In response to Shearman's move, Linklaters announced raises of nearly 4 percent for junior lawyers, in what will be seen as a confident move from the U.K. giant. A newly-qualified solicitor (NQ) at the Magic Circle law firm is now set to earn 66,600 pounds ($131,500), up from 64,000 pounds ($126,300) in 2007.

Finally, in other U.K. news, the London office of O'Melveny & Myers is in "disarray" and "turmoil," according to The Lawyer (via the ABA Journal). That publication reports that "underinvestment by the firm's Los Angeles (LA) hub [has] prompted the exit of a fifth of its partners and a generation of senior associates." We dropped OMM a line to see if they had any comment, but they didn't get back to us.

Update: More here from Legal Week, which reports that O'Melveny is "is in talks to bring its remuneration structure for London partners into line with the rest of the firm."

Shearman leads London associate salary hike, Linklaters follows [Legal Week]
O'Melveny in disarray as UK dream goes sour [TheLawyer.com]
O’Melveny’s London Office is ‘In Turmoil,’ Legal Publication Says [ABA Journal]

Earlier: London to... £75K Be Happy You Have A Job!

Friday was a busy day for associate bonus announcements. We reported bonus news from Cleary, Willkie, Cahill, and Dewey & LeBoeuf.

But we didn't get everyone. Apparently Shearman & Sterling also announced on Friday afternoon. (But we didn't get the memo until the weekend -- please, people, we know you can do better.)

Memo after the jump.

Sometimes it takes a while. But we usually get results, eventually.

Back in July, we published a post entitled Clerkship Bonus Watch: What's Up With Shearman? Today, at 12:32 p.m., this email went around at Shearman & Sterling:

At the last meeting of the Associates Committee in New York, the committee representatives noted that we had fallen behind some other firms who had adjusted clerkship bonuses in 2007. As we mentioned at the meeting, we assumed that the firm would promptly respond with a clerkship policy consistent with the market.

Accordingly, I am pleased to report that because the firm places great value on the experience a clerkship provides, it has raised bonuses to $50,000, paid to associates who join the firm after August 1, 2007 and who complete a one-year eligible clerkship. For two one-year clerkships or two-years of clerkship experience, the firm will pay $70,000. An additional bonus is paid to U.S. Supreme Court clerks.

For details, please refer to the firm's website.

This is the first clerkship bonus news in a while (since Dechert). Have we missed any developments? If you know of clerkship bonus news that we haven't previously covered -- use the site search function or the archives to check -- please email us. Thanks.

Earlier: Clerkship Bonus Watch: What's Up With Shearman?

Maybe we should feature stories about the full-time associates who mistreat summer associates. For one such story, involving a senior associate in New York who's an a**hole of Ari Gold proportions, see here.

Or maybe we should feature stories about partners who, despite being partners, comport themselves in a manner that would make Aquagirl blush. For one such story -- from a few years ago, and from the other side of the pond, but trust us, it's good -- see here.

We'll tell you that the two naughty female partners were from Shearman & Sterling. But please respect the house rules and don't identify them further. Considering the great nicknames developed for partner #2, including "The Human Stain" and "The Sprinker," it's just not necessary. Thanks.

Stories from the Belly of Biglaw: Curious George [Urbanagora]
Yank skanks [TheLawyer.com]

Our posts on the perks or fringe benefits of law firm life continue to generate interest and good comments. Here is today's topic:

Why don't you guys do an open thread on working abroad? I know of several firms that send their associates for some period of time to work [overseas].

For example, Allen & Overy has a program in which they send their senior associates to London to work for something around six months. A friend of mind who worked for Shearman went to Asia, and some others from Baker McKenzie have been sent to other offices around the world.

One advantage of working abroad: a generous cost-of-living allowance. Last month, Cravath raised its London COLA:

Cravath Swaine & Moore has raised the cost of its living allowance (Cola) for London office associates from $85,000 (£41,000) to $110,000 (£53,000), The Lawyer can reveal. The 30 per cent hike at the elite firm takes remuneration for the most junior lawyers in Cravath's City office to potentially in excess of £150,000.

At current exchange rates, that works out to a starting salary of $300,000. Not bad. And a Cravath source tells us that the firm is eager for people to head over there: "[T]hey are super busy and trying to get more people to go and stay longer.... [T]hree hundred grand is a lot of dough, no matter how expensive London is!"

Your thoughts on overseas Biglaw gigs are welcome, in the comments.

Cravath hikes London cost of living allowance [TheLawyer.com]

Earlier: Biglaw Pay Raise Watch: Weil and Cleary to 180, Latham to 190!

Since our last two threads on Vault 100 law firms have generated healthy (and generally enlightening) discussion, we'll continue to move on down the list.

Please pose questions about or share insights into these five law firms (in Vault 100 order, with prestige scores in parentheses):

11. Kirkland & Ellis LLP (7.492)
12. Debevoise & Plimpton LLP (7.468)
13. Paul, Weiss, Rifkind, Wharton & Garrison LLP (7.444)
14. Shearman & Sterling LLP (7.240)
15. Wilmer Cutler Pickering Hale and Dorr LLP (7.237)

Please discuss them in the comments. Thanks.

The Vault Top 100 Law Firms [Vault]

Earlier: Vault 1-5; Vault 6-10

We resume our series of fun summer associate stories. If you have an anecdote you'd be willing to share, please check out the submission guidelines, and then email us.

Today's story is more embarrassing to the partner than the summer associate. But that doesn't preclude it from inclusion here. After all, the tale of the Clifford Chance Lolita was arguably bad for both the partner and the SA.

Also, today's story -- even if not focused on the summer associate -- is pretty funny. Here you go:

1. Superhero name: Partner's Best Friend
2. Special power: Uncanny timeliness when using the restroom
3. Summered: Shearman & Sterling, summer 2006
4. Claim to fame: We quote from an email that previously appeared on another blog, You Can't Get Arrested for Being Awesome:

"I discovered the ultimate way to get on the good side of a partner today. I go to use the restroom, and when I walk in, someone is cutting gigantic farts. I mean, the type that shake the stall walls. So, I suppress my laughter -- and out walks one of the senior partners of litigation."

"He's stopped in my office twice today to say, 'Hi.' At my firm, partners just do not drop in to say 'Hello.' I think he was truly embarrassed and is attempting 'the nice routine,' in order to make sure I don't spread the story of my bathroom experience."

It's a little late for that.

5. What happened to him: The partner could have gone nuclear and killed his offer, to keep him quiet. But he got the offer and will start as an associate there this fall.

(Consistent with our general rule, we're keeping the participants in this bathroom episode anonymous. Please do not name them, or even speculate as to their identity, in the comments -- which, of course, are the legal responsibility of the commenters (not ATL). If things get out of hand in the comments, we'll have to close the thread, and we'd rather not do that. Thanks.)

Firm Life [You Can't Get Arrested for Being Awesome]