Over the summer, we wondered: what can law firms do to prepare for a possible double-dip recession?
One obvious answer: firms can “right-size” themselves, by making sure that they are as lean and as mean as they can be. And this seems to be what has been happening over the past few months.
We haven’t seen much in terms of lawyer layoffs lately, but staff layoffs are another story. In fact, on the staff side, we seem to be looking at a trend of firms reducing their permanent staff positions in favor of outsourcing.
Since August, we’ve learned of staff layoffs at O’Melveny & Myers (75 positions) and Paul Hastings (45 positions) — both as a result of domestic outsourcing to outside service providers. In addition, Pillsbury Winthrop announced that it might have to cut staffers who aren’t willing to relocate to its new Professional Services Center in Nashville. This prompted us to ask: Is On-Shore Outsourcing the Biglaw Wave of the Future?
The answer seems to be yes. Today we bring you news of additional staff reductions, at Fulbright & Jaworski and Goodwin Procter, both involving outsourcing….
Continue reading “The Growing Trend of Staff Layoffs: Fulbright and Goodwin Announce Cuts”
The big news this morning is bad news for the staff at O’Melveny & Myers. News started leaking out last night that the firm would be laying off 75 support staff members.
The firm has confirmed the news that was first published in The Recorder.
Approximately half the of the laid-off O’Melveny staffers will be cut outright. The other half will have the opportunity to be relocated to scenic West Virginia….
Continue reading “Staff Layoff Watch: O’Melveny & Myers Replaces 75 Humans With Technology”
During 2011, Paul Hastings has been picking up partners. We previously mentioned their acquiring two prominent leveraged finance lawyers, Michael Michetti and Rich Farley, from Cahill Gordon. Additional hires, including Michael Baker from Shearman & Sterling and Steven Park from Finnegan Henderson, are listed on the PH website.
Like any large firm, however, Paul Hastings loses partners too. We’ve just learned of two partners who are ankling PH for Nixon Peabody.
Let’s find out who they are, get the backstory on their departures, and also obtain the 411 on some PH staff layoffs….
Continue reading “Two Partners Leave Paul Hastings for Nixon Peabody
(Plus Paul Hastings staff layoffs.)“
Too bad it's not as simple as making a sign.
Yesterday the stock market experienced its biggest drop since 2008. In the wake of the Standard & Poor’s downgrade of U.S. debt on Friday night, the Dow Jones industrial average fell by 5.6 percent and the S&P 500 fell by 6.7 percent. Global markets suffered similarly.
The market decline on Monday was only the latest in a series of slides. As noted yesterday by the New York Times, “[t]he S.& P. 500 is now down 18 percent from its April 29 peak and is nearing official bear market territory, defined as a fall of 20 percent.”
(All in all, it’s pretty depressing stuff. As I tweeted yesterday, “@DavidLat isn’t looking at his #stockmarket holdings today; instead, he’s buying more #Powerball tickets – huge jackpot!”)
What’s frightening about the latest economic turmoil is that it comes on the heels of a brutal recession that the U.S. economy has not yet fully recovered from. In the wake of the aptly named Great Recession, unemployment still exceeds 9 percent, housing markets remain weak, and government policymakers have exhausted many of the tools at their disposal for attempting to revive the economy. Interest rates are basically as low as they can go at this point; fiscal stimulus is a political no-go. What is to be done?
The steep stock market declines raise a question: Are we entering another recession — i.e., the second dip of a double-dip recession? If so, what does that mean for law firms and lawyers? (We’ve already noted the implications for the IPO market — and the lawyers who work in it.)
Let’s discuss, and take a READER POLL….
Continue reading “Are We Entering a Double-Dip Recession? If So, What Should We Do?”
Layoffs at law firms have slowed to a trickle (although we still hear the occasional rumor; email us with your tips). In the public sector, however, layoffs continue — and may even accelerate, as state governments and the federal government grapple with contentious budget issues.
Today brings word of major layoffs in Connecticut. In a just-issued report, Judge Barbara Quinn, Chief Court Administrator, laid out some serious cuts to positions in the judicial branch.
How serious? This may be hard to believe, but the number of jobs being axed exceeds the February 2009 bloodbath at Latham & Watkins….
Continue reading “Nationwide Layoff Watch: The Connecticut State Judiciary”
I feel like I’ve stepped into a time machine that has taken me all the way back to 2009.
According to an internal memo obtained by Above the Law, the international law firm of Hogan Lovells is offering a voluntary separation program to U.S. staff. The memo, posted in full below, talks about needing to bring the firm’s support staff into alignment with overall firm needs.
The program is voluntary, but as we learned during the height of the recession, “voluntary” programs don’t always stay optional….
Continue reading “The Return of Staff Layoff Watch? Hogan Lovells Offers ‘Voluntary’ Separation Program”
Although Howrey LLP officially dissolved as a partnership as of March 15, some operations continued beyond that date. But at the close of business today, the firm is going into a more complete shutdown, due to a withdrawal of bank financing.
“Last night, we received notice via email that Howrey is closing as of today, because CitiBank refuses to pay the payroll,” one source reported. “CitiBank has also refused to pay our PTO [paid time off], and our pension contributions.”
“Citibank has closed the door on Howrey operations today, more than a month before the May 9th date listed on WARN notices,” a second tipster confirmed. “No PTO, pensions will be paid out.”
UPDATE (6 PM): Citi takes issue with Howrey’s take on events. From a Citi spokesperson: “We are deeply disappointed in Howrey’s mischaracterization of the situation. Citi is not responsible for the employment practices of a client and has acted in a professional manner throughout this process.”
The full Howrey memo, after the jump.
Continue reading “Howrey Going to Go On Without Bank Funding?
Firm shutting down today, after Citi pulls plug.“
We’ve been trying to figure out how many top New York firms will adopt spring bonuses. It doesn’t appear that Schulte Roth & Zabel will be one of them.
Multiple tipsters report Schulte Roth conducted staff layoffs earlier this week.
But maybe we shouldn’t jump to the conclusion that this means Schulte will not be paying spring bonuses. Is it possible that this move will free up money for a spring payout?
Continue reading “Staff Layoff Watch: Schulte Roth Has A Different Kind of Spring Surprise”
Law firm layoffs might be down, but they’re not out. Today we bring news of staff layoffs in the Los Angeles office of Hughes Hubbard & Reed.
We heard reports that approximately 12 out of 18 support staff members have been or will be laid off. According to these reports, eleven were laid off earlier this month, and one will be leaving in a few weeks.
In response to an inquiry from Above the Law, a spokesperson for the firm confirmed the essential accuracy of these reports. No associates were affected by the reduction, she noted.
“This was a difficult move; we had to let go of some very good people,” said Gerard F. Cruse, the firm’s Chief Operating Officer, in a statement issued to ATL. “But, despite the fact we had another record year last year, the recession has impacted our L.A. office and we couldn’t continue to be overstaffed there. We are confident about its future and are planning the L.A. office’s expansion.”
Some additional information, after the jump.
Continue reading “Staff Layoff Watch: Hughes Hubbard & Reed (Los Angeles)”
Embarcadero Center (at right): Skadden's soon-to-be-former S.F. home.
Late last week, word started to leak out that Skadden Arps plans to close its San Francisco office, by the end of June 2011. A meeting was held on Friday where the closure was announced to the office. The S.F. office is essentially being folded into the firm’s Silicon Valley outpost.
Some of the initial reactions expressed concern. “Unclear with respect to job security,” said one source. “My cynical side wonders if this isn’t layoffs in disguise,” said another.
But further examination of the situation suggests that this is, as some might say, no big deal….
Continue reading “Skadden Takes Its Heart from San Francisco — and Closes Its S.F. Office”
Even the Grinch's dog knew when to take a break.
Welcome back from your long weekend. I trust everybody is ready to put in a lot of hard work through the holiday season in order to finish the year off strong.
Ah, what’s the point? Based on the early bonus news, it seems that Biglaw managers are going to go with stingy bonus payments for the second year in a row. And while we’ve reported that hours appear to be up this year over last year, hours aren’t back to 2007 levels.
If firms are going to keep bonuses at 2009 levels until their profits get back to 2007 levels, well, then maybe it’s time to kick back and do some shopping on Cyber Monday…
Continue reading “Staff Layoffs Could Happen as Firms Struggle to Pump Up Profits”
It looks like layoffs are making a comeback of sorts. If you are working as legal support staff in a Biglaw firm, you need to keep your head on a swivel.
Last week, we reported on cuts for staff (in terms of bonuses) at Jones Day. Today Above the Law can report on cuts of staff, at Howrey.
Multiple tipsters report that Howrey laid off 35 support staffers over the course of last week. What should be particularly disturbing to attorneys is that Howrey previously conducted staff layoffs in advance of significant attorney cuts…
Continue reading “Staff Layoff Watch: Howrey Makes Cuts”
It’s a bad news day in Brooklyn. This morning, the class of 2010 made Brooklyn Law look foolish. Now we’ve received reports that the Brooklyn DA’s Office has laid off 13 attorneys and two staffers in the past week.
It’s big news, especially for law students and private practice attorneys who think that working for the government gives you unchallenged job security. Government lawyers might be somewhat buffered from the tyranny of the legal market economy, but they can still be shown the door.
And word coming out of Charles Hynes’s office is that these 15 people were let go for poor performance…
Continue reading “Kings County D.A.’s Office Lays Off 13 Attorneys, 2 Staff”
I like paying attention to what consultants say about the Biglaw market. It offers a fun little insight into what people think partners want to hear.
The ABA Journal reports that consultants at Hildebrandt think partners want to hear that they can still fire people — lots of people:
Writing for the blog of law firm consultant Hildebrandt, Lisa Smith makes an argument that outsourcing, efficiencies and increased hiring of staff attorneys could mean a different mix of staff and associate lawyers—and an overall reduction in head count in the next five to seven years.
Hilderbrandt expects an overall reduction of headcount of 17,500. But not partners! Just associates and staff attorneys…
Continue reading “Consultant Says 17,500 Non-Partner Biglaw Jobs ‘At Risk’”
Earlier this month, we reported on staff layoffs in the Los Angeles and Dallas offices of Jones Day. Now we’re hearing about additional layoffs at the firm, which raise the question: Could staff layoffs at JD perhaps be a firm-wide phenomenon, even if the firm only confesses to what it’s confronted with?
Yesterday the Cleveland Plain Dealer reported that Jones Day cut an unspecified number of non-lawyer employees in its Cleveland office. The firm cited the old “technology allows us to be more efficient” rationale, which has been widely invoked by law firms when they cut stuff:
[T]he 117-year-old firm issued a statement saying that “universal adoption of smart phones, voicemail and email enables (and requires) lawyers to be more self-sufficient,” reducing the need to have as many support staff to perform duties now done directly by lawyers.
“Although we deeply regret the need for this action, these changes preserve our ability to best serve clients and remain one of the leading global law firms,” the company said.
Jones Day — which has tooted its own horn in the past, despite also boasting of its discretion and understatement as a firm — couldn’t resist using these staff layoffs as a chance for even more self-aggrandizement….
Continue reading “Staff Layoff Watch: Jones Day Also Cuts in Cleveland”
Jones Day has weathered the recession quite well. And they know it. And they want everybody else to know it.
The traditionally secretive firm has not been shy about slamming the business models of their competitors. You’ll remember this memo, written by D.C. partner Joe Sims, where he taunts Jones Day’s rivals:
[M]any of our peer competitors will come out weaker, not stronger. They may well protect their short-term financial metrics (although it will be interesting to see how we fare vs. the firms that slashed and burned), but they will pay a long-term price. Some of it is obvious: Firing staff and associates, or freezing associate salaries, or doing away with summer programs entirely makes it very clear to those groups that either that firm was not efficiently organized and managed before this crisis, or its first interest is protecting the owners’ incomes, not the various constituents that depend on the firm. While that is hardly un-American, it does tend to focus people’s minds on the fact that their firm clearly does not have their interests at the top of its agenda.
So, if Jones Day were to fire staff, would that make it “very clear” that JD isn’t efficiently organized?
Continue reading “Staff Layoff Watch: Jones Day Draws The Curtains on 30+ Staffers”
The pace of law firm layoffs has apparently slowed to a crawl. We’ll go weeks between job losses at large law firms (that we know of). But, here and there, some people are still getting pushed out as firms retool for the new economy.
Sadly, legal secretaries at Dewey & LeBoeuf became the latest casualties of a layoff cycle that seems very close to its end. The firm-wide memo went out earlier today:
Beginning last week and concluding today the firm implemented a reduction in force impacting approximately 30 administrative staff positions in its Los Angeles, New York and Washington, D.C., offices.
Nobody wants to be the last person KIA in a war, and nobody wants to be laid off at the tail end of a recession. Why did Dewey make the move this late (hopefully) in the recession?
Continue reading “Staff Layoff Watch: Dewey Cuts 30 Administrative Staff”
Yesterday we reported on layoffs at Howrey. Our sources told us that 100 people were axed, but a Howrey spokesperson declined to give us firm numbers.
It turns out that our sources were pretty accurate. The firm confirmed to AmLaw Daily today that it laid off 94 people: 29 associates and 65 staff, from 10 offices. A tipster says one-third of the “reduction-in-force” took place in Howrey’s D.C. office.
The rumor mill at the firm is still churning, though, claiming that Howrey has taken a number of actions to cut costs — and that the number of laid-off individuals may be higher than 94.
Continue reading “Howrey Layoff Update: The Final Tally?”
Last week, Seyfarth Shaw kicked off a round of 2010 layoffs. Today, Wilson Sonsini followed suit.
The firm just announced that it is laying off staff. Here’s an excerpt from the firm-wide memo:
[A]fter a long and thorough analysis, we have concluded that these changes have made it necessary to downsize the ranks of our staff by approximately 20 employees nationwide, primarily in the secretarial area. We emphasize that the downsizing is a regretful but prudent business decision and no reflection on the skills and performance of the employees involved, who already have been informed of the specifics of this decision. The firm will provide separation pay and support services to help them transition.
It looks like another law firm just got a look at its 2009 profit numbers and found them unappealing. But at Wilson, this is the second year in a row that the new year has brought about new layoffs. In January 2009, Wilson Sonsini laid off 113 people (68 staff) because of the economy. At least this round of New Year’s layoffs isn’t as deep.
In September, Wilson froze the salaries of its secretaries, evidently the firm decided it needed to make a stronger move.
Good luck, Wilson Sonsini friends.
Read the full firm memo after the jump.
Continue reading “Nationwide Staff Layoff Watch: Wilson Sonsini Makes Cuts”
Apparently, cutting salaries, changing its compensation structure, and canceling its summer program just isn’t getting Seyfarth Shaw the kinds of cost savings it needs.
So the firm has returned to the old fail-safe option: layoffs. Am Law Daily reports that the firm laid off approximately 20 attorneys and 20 staffers.
The firm-wide email from Seyfarth Shaw describes the layoffs as needed to better position the firm to take advantage of “opportunities” in the market:
We see opportunities for creating or strengthening client relationships in all of our departments; however, we also know that we must approach these opportunities with the most effective use of our people and their skills.
As a result, we implemented today a separation of approximately 20 attorneys and approximately 20 staff members from a total of about 1,500 people nationwide. In some cases, these decisions were made to better match current or anticipated workloads; others were made as a result of our annual performance management process for attorneys. The separations were spread across multiple offices and practice groups. We have talked to each person affected prior to the distribution of this e-mail.
One Seyfarth Shaw tipster who still has a job told us that they preferred layoffs of some people over additional salary cuts for everybody.
Clearly, we’ve moved well beyond the “survivor’s guilt” stage of Biglaw layoffs. At this point, people are just trying to hang on.
Read the full Seyfarth layoff memo, after the jump.
Continue reading “Nationwide Layoff Watch: Seyfarth Shaw Cuts 40 People”
Over the summer, we wondered: what can law firms do to prepare for a possible double-dip recession?
