Sonnenschein

ATL Salary Freeze Round-up: The Firms on Ice

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pay freeze salary freeze pay cut law firm.jpgThe new year is shaping up to be a cold one. As we noted in our 2008 Year in Review series, one of the biggest stories heading into 2009 has been that of the salary freeze. Rather than instituting lock-step raises for associates entering a new class year, a number of firms have informed associates that their salaries will remain at 2008 levels.

There have been two types of freezes: the “Solid Ice freeze”–with salaries frozen through all of 2009–and the “Slurpee freeze”–where firms are sticking with 2008 levels for now, but promise to revisit the decision later in the year.

Many an ATL reader has requested a round-up, and we aim to please. So find your pleasure, after the jump. Some of the firms have been reported on before, and some are new.

If you know of other frozen firms, send us an e-mail at tips@abovethelaw.com with the subject, “Salary Freeze: FIRM NAME.” Also, if your firm has raised salaries as expected, feel free to send us the news, with the subject “Salary Raise: FIRM NAME.” While freezes are news, raises as expected aren’t, so we will not be covering firm by firm, but we may do a round-up.

Find the list of the sixteen firms that have frozen, after the jump.

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Sonnenschein: Top Bonuses For Top Performers, Salary Freeze For All

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law firm associate bonus watch 2008 biglaw bonuses.jpgSonnenschein 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.

Read the full memo after the jump.

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Legal Eagle Wedding Watch 11.7: Berkshires, Baby

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champagne glasses small.jpg

Amidst all the depressing talk of layoffs and cold offers, here’s a little mergers and aquisitions news to brighten your Monday: Even in a bad economy, the wedding machine grinds on. In fact, we’ve noticed a slight uptick in the number of registries at Neiman Marcus. So how bad can things be, really?

Here are this week’s lucky featured couples:

1. Jordan Brudner and Daniel Gaspar

2. Randy Shapiro and Daniel Ripp

3. Rachel Turow and Benjamin Schiffrin

More about these newlyweds, after the jump.

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Update: Sonnenschein Confirms Attorney Layoffs

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Sonnenschein Nath Rosenthal Above the Law blog.jpgA spokesperson for Sonnenschein Nath & Rosenthal has confirmed that there were layoffs at the firm yesterday.

The spokesperson said that 25 attorneys were laid off. The firm said they waited until they could personally notify all of the attorneys before they went public with the information.

The firm was not able to confirm how many additional staff members were also cut. Yesterday we reported that there could be as many as 60 total layoffs. The firm spokesperson said that they were waiting until they’re able to inform all affected staff members.

Earlier: Nationwide Layoff Watch: The Sun Is Not Shining At Sonnenschein

Crisis for some firms, opportunity for others

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good news bad news.jpgIt’s been a dark week on ATL. Layoff news has been pouring in: 21 attorneys cut at Katten, up to 60 at Sonnenschein, and 20 at Clifford Chance.

To prevent you from jumping out your windows, we’re revisiting a Wall Street Journal article from earlier this month on the silver lining for law firms during the economic crisis.

Firms with relatively strong balance sheets are hiring lawyers from competitors that are hurting from the dropoff in mergers, debt offerings and other staples of the legal business. Leaders of these firms figure that being bigger and more geographically diverse will help them weather downturns in particular market sectors and capitalize on complex business opportunities that require a variety of specialties. In most cases, they’re even giving the new hires raises.

Did you hear that, despondent ones? Raises!

Many firms have been feasting on the remains of Heller Ehrman (R.I.P.). Heller partners and attorneys have been snatched up by Hogan & Hartson; Orrick; Sheppard Mullin; Arnold & Porter; Covington & Burling; Jones Day; and Cooley Godward Kronish. Other firms have been poaching partners from struggling Thelen.

Some firms are buying on the cheap, while others are giving new attention to more resilient practice groups:

K&L Gates LLP has acquired medium-size firms in Texas and North Carolina this year and hired 45 partners from other firms. “We have no debt — no long-term debt, no short-term debt — and therefore have a balance sheet that allows us to grow aggressively into a downturn,” says Peter Kalis, chairman of the 1,700-lawyer firm…

But many law firms believe that they have no choice but to expand specialties, such as restructuring, intellectual property, securities litigation and antitrust, that are generally believed to remain steady — or even pick up — during down cycles. Cadwalader, Wickersham & Taft LLP in New York laid off 131 lawyers — nearly 20% of its staff — earlier this year because of the implosion in the mortgage-backed securities market, a key practice area for the firm. But it has hired lawyers in other practice areas, including financial restructuring.

Chins up.

Some Law Firms Hire in Slump [Wall Street Journal]

As Heller is sliced and diced, many associates are out in the cold [National Law Journal]

Earlier: ATL Layoff Coverage

Nationwide Layoff Watch: The Sun Is Not Shining At Sonnenschein

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Sonnenschein Nath Rosenthal Above the Law blog.jpgToday is not a good day to be Carlo Rizzi. We’re getting word that Sonnenschein Nath & Rosenthal is laying off a bunch of attorneys and staff today. The big number we are hearing is that 60 associates and staff are out of jobs.

According to one tipster, the layoffs are being carried out nationwide, with no input from local offices.

However you slice it, 60 is a huge number. Sonnenschein didn’t exactly deny these reports. A firm spokesperson told us:

We look at staffing levels around this time every year as part of our budget and practice planning processes, and it is not unusual for us to make adjustments. While we understand that rumors such as the one you are reporting about Sonnenschein and multiple other law firms are circulating, we have nothing to add at this time.

More on Sonnenchein’s layoffs after the jump.

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Legal Eagle Wedding Watch 9.14: Brief Interlude

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What did you miss if you didn’t peruse last Sunday’s NYT weddings section? The marriage of Theodore Roosevelt V, for starters. Also, a whole lot of gayness! We counted seven same-sex weddings on this week’s list, which we suspect is a an all-time high. (And how sociologically interesting that all seven were men marrying men!) None of this week’s same-sex weddings made it into the finals, but LEWW is delighted to reflect (in a rare moment of seriousness) on how much has changed since August 2002, when the paper announced that it would include same-sex weddings for the first time. Long live love!

Here are this week’s couples:

1. Tania Brief and Andrew Ehrlich

2. Jori Finkel and Michael Lubic

3. Laura Millendorf and Mark Yopp

Click on the link below to read all about these legal lovebirds.

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Nationwide Start Date Watch: Sonnenschein

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calendar Above the Law blog.jpgWe’re a little late in passing along this news, which is from last month. But when it comes to coverage of certain topics, like start dates and layoffs, we aim for completeness.
An article in Crain’s Chicago Business focuses on delayed start dates at major law firms in the Windy City. Most of the news in the piece was previously broken by ATL. See, e.g., Seyfarth Shaw; DLA Piper.
But there’s one nugget of news:

With starting attorney salaries reaching $160,000 a year, delaying new-hire dates is one way to trim expenses. Sonnenschein Nath & Rosenthal LLP, which has 186 attorneys in Chicago and a substantial real estate practice, pushed back starting dates for seven lawyers by two months, to mid-November, a spokeswoman says.

So add Sonnenschein to the list of firms that have delayed start dates for incoming associates. Just like no-offering summer associates, pushing back starting dates is less than ideal. But as we wondered on Friday, such measures may be the lesser of multiple evils (with lawyer layoffs as a greater evil — although some firms have done both).
P.S. Lee Miller might want to coordinate better with his public-relations team. The DLA Piper PR folks previously explained that the change in start dates was made “to provide a uniform start date across all our offices… [and] to have a uniform orientation process.” But Miller tells Crain’s that it’s the economy, stupid:

“Any firm that isn’t careful in this economy is nuts,” says Lee Miller, joint CEO of DLA, Chicago’s eighth-biggest law firm. Mr. Miller says the firm also plans to cut next summer’s recruiting class by as much as one-fifth. “The transactional practices are slower, mirroring the economy, and the capital markets are in turbulent times,” he says.

P.P.S. Today, of course, is Labor Day. Is anyone reading?
Update / Correction: The Sonnenschein start date news was first reported by Bloomberg News on August 5, in a very interesting article on partner pay. As Lindsay Fortado reported, the firm pushed back start dates for 20 of its 24 incoming first-year associates from September to November 15. (The seven lawyers referenced in the Crain’s article appear to be Chicago associates; the firm-wide number appears to be 20.)
Tougher times on the docket [Crain's Chicago Business]
Wall Street Lawyers Ask Bank, Can You Spare $250,000? [Bloomberg News]

Fall Recruiting Open Thread: Vault 61-70 (2009)

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comparing.jpgJudging from our traffic, readers are enjoying this rundown of the Vault 100. We do aim to please here at ATL. We appreciate those who have offered insights about firms in the comments.
Moving on to the next group (with prestige scores in parentheses):

61. Cahill Gordon & Reindel LLP (5.608)
62. Sonnenschein Nath & Rosenthal LLP (5.583)
63. Bingham McCutchen LLP (5.583)
64. Greenberg Traurig, LLP (5.478)
65. Holland & Knight LLP (5.416)
66. Heller Ehrman LLP (5.346)
67. Foley & Lardner LLP (5.266)
68. Steptoe & Johnson LLP (5.252)
69. K&L Gates LLP (5.242)
70. Kaye Scholer LLP (5.230)

As we move down the Vault list, “notable perks” are becoming less elaborate. This group is dominated by tales of free food, from endless soda at Greenberg Traurig to weekend doughnuts and muffins at Foley. And it appears that Pillsbury lacks a monopoly on cookie benefits; over at Cahill, lawyers are plied with “twice daily cookie trays.”
We note this food-related perk at Bingham: “If any lawyer takes out a more junior lawyer for drinks/dinner, he/she can submit the expense to the mentoring budget AND the senior person can get creditable hours.” Can you expense the roofies?
We invite you to compare and contrast these firms’ work, lifestyle, benefits… and cookies, in the comments.
Earlier: Vault 100 Open Threads – 2009

Still More on Sonnenschein: Portnoy’s Complaints

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Sonnenschein Nath Rosenthal Above the Law blog.jpgEarlier today, in the wake of yesterday’s post about troubles in the Charlotte office of Sonnenschein Nath & Rosenthal, firm chairman Elliott Portnoy sent around an irate email:

From: Portnoy, Elliott I.
Sent: Wednesday, April 09, 2008 12:40 PM
To: #Attorneys-All
Subject: Rumors Regarding Charlotte and Summer Program

Many of you have recently heard claims regarding our Charlotte office that have emanated from certain blogs frequented by law students. I write today to let you know the facts, not rumor or speculation. Firmwide, we will have more than 50 Summer Associates joining us over the coming few months, and we plan to have 24 first-years joining us this Fall across the firm.

First, this fine website, while certainly “frequented by law students,” is also read by many other folks – e.g., law professors; associates, partners, and recruiting personnel at top law firms; in-house and government lawyers; law clerks and judges; and legal reporters and PR professionals.
Second, Portnoy attempts to draw a distinction between “facts” and “rumor.” But the core of what we reported – namely, that the firm has rescinded offers of summer and full-time employment in its Charlotte office – is a fact, acknowledged by Portnoy later on in his message.
Read the rest of that email message, with our running commentary, after the jump.

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Update: What’s Going on at Sonnenschein – CLT?
(And a discussion of the Charlotte market in general.)

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Sonnenschein Nath Rosenthal Above the Law blog.jpgHere’s a bit of follow-up on last week’s post about Sonnenschein Nath & Rosenthal. We heard from a number of tipsters, and their reports are consistent with the rumors previously reported:
1. Sonnenschein is rescinding offers of summer employment to incoming summer associates in the Charlotte office.
2. Sonnenschein is rescinding offers to full-time associates who were set to start work in the Charlotte office in the fall.
We have not heard from the firm since our initial inquiries last week — despite repeated efforts, including some made yesterday. We are inclined to agree with this commenter:

Their lack of response must mean it’s true. Rescinding offers is about the worst thing a firm can do for its rep. There’s no way they’re going to confirm it if it is true, and they would’ve immediately disputed it if it is false.

Read what our tipsters had to say, after the jump.

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(And a discussion of the Charlotte market in general.)”

What’s Going On At Sonnenschein?

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Sonnenschein Nath Rosenthal Above the Law blog.jpgOver at Greedy South, various rumors are circulating about Sonnenschein Nath & Rosenthal. One poster claimed that the firm rescinded offers of summer employment to several incoming summer associates in the Charlotte office. Later on in the thread, others chimed in to claim that the firm is rescinding offers to full-time associates who were set to arrive in the fall (possibly beyond Charlotte as well).
An ATL tipster wrote us:

I know things are really, really, slow at most firms in Charlotte (as has been noted by the firings at Cadwalader and Dechert), but is there any way that you could find out whether this is actually true? It seems like the elephant in the room is everyone’s hope that securitization will magically pick up again, but everyone seems to forget that it’s difficult for a market segment to “rebound” that wasn’t even in existence 10 years ago.

Is this a sign of Sonnenschein closing its Charlotte office (after only 1 year)? Have you heard anything about other offices having the same types of problems? Just trying to find out what’s going on.

We reached out to the firm for comment earlier this week but they never got back to us. If you have any info to share, please email us. Thanks.
Sonnenschein Firings? [Greedy South / Infirmation]