Over the past year or so, we’ve heard a steady trickle of negative news out of Dickstein Shapiro. The trickle has turned into a stream, so it’s now time to share what we’ve learned.
Let’s start with the numbers — grim numbers. Yesterday the Legal Times reported on what it described as Dickstein’s “worst year in more than a decade.” Revenue fell by 20 percent in 2013, and net income dropped even more sharply, by 35 percent. According to the Legal Times, the firm’s 2013 net income of $36 million is the lowest the firm has seen since before 1998, its first year on the Am Law 200.
Chairman James Kelly tried to spin this performance as “restructuring” and “investment,” as the firm focuses on its core practice areas. According to Kelly, “We made a strategic commitment to be a market-leading specialty firm. We decided we’re not going to be everything to everyone.”
“Everything” would appear to include “employer.” Let’s hear about the firm’s headcount cuts — affecting partners, associates, and staff — and check out the severance agreement that one source leaked to us….
* Two Biglaw firms and their even bigger revenue meltdowns: Patton Boggs and Bingham McCutcheon have posted the most dramatic revenue declines revealed thus far by Am Law. [Wall Street Journal (sub. req.)]
* Dewey know why this malpractice case is being brought against an ex-LeBoeuf Lamb partner? You know your case is screwed if one of the questions the judge asks you is “[W]hy are you here?” [Am Law Daily]
* Those who remain at Heenan Blaikie, the imploding Canadian Biglaw firm, are pretty “pissed off” they haven’t received word on their severance packages. So much for that “orderly wind down,” eh. [Law Times]
* Career alternatives for former Biglaw attorneys now allegedly include breaking and entering and assaulting state delegate’s wives. We’ll probably have more information on this juicy story later today. [NBC29 WVIR]
Today’s Biglaw layoff story involves a firm that’s even more impressive. This firm has been recognized as a great place to work by Fortune, Crain’s, and Above the Law. In fact, it topped our list of the 12 top rated firms for 2013.
Which wonderful law firm is parting with some people, and why?
As more and more people discover that law school is not the “get rich quick” scheme that they once thought it was, applications continue to plummet. As of late January, law school applications were down 13.7 percent from where they were in 2013. The loss of student revenue is killing the bottom line at some law schools, and members of their administrations don’t like it one bit.
These ivory tower inhabitants seem terrified and are reacting accordingly, having been forced to deal with the dearth of applicants and enrollees in all sorts of ways. Some law schools are doing the right thing and lowering tuition in the hopes of luring students to their once hallowed halls.
Others are hacking and slashing away at their faculty and staff, just like law firms. First came news of the potential purge of junior faculty at Seton Hall (which was fortunately averted). Next came the staff massacre at McGeorge. Then Thomas Jefferson started handing out pink slips, and all hell broke loose.
Which law school is the latest to announce a possible pruning of its ranks? We’ll give you a hint. This law school is located in New York, a state with 15 law schools to choose from, several of which have been sued over their allegedly deceptive employment statistics…
(Please note the multiple UPDATES added to this post.)
November marks the beginning of the holiday season, and people are brainstorming about what they should be thankful for so they’ll have something thoughtful to say at the Thanksgiving dinner table. We’ve got a suggestion: you should be thankful that you’ve still got a job, because some of your colleagues aren’t so lucky.
Which Biglaw firm offered a significant number of employees a cornucopia of despair yesterday?
Law firms across the land are running tighter ships these days. Even if your firm breaks the $2 million mark in profits per partner, which is good enough to put it in the top quarter of the Am Law 100, there’s no reason to dilute your PPP unnecessarily.
Consider the venerable law firm of Debevoise & Plimpton, one of Biglaw’s most prestigious and profitable firms. Earlier this year, the firm parted ways with its trusts and estates practice, a move that was viewed in some quarters as designed to enhance profit.
First they came for the T&E lawyers. Then they came for the legal secretaries and other support staff….
* Lawyers from the DOJ are literally begging judges to stay their litigation cases because they’re not allowed to work unless it’s an emergency. How very lucky for U.S. Air. [Blog of Legal Times]
* FYI, the IRS wants to further screw victims of layoffs. If you were recently laid off and received a severance package from your firm, this is a SCOTUS case you’ll want to follow this Term. [Reuters]
* Which Biglaw firm has the best brand in the world? We’ll give you a hint: it’s not the new top dog on the Am Law Global 100 (and that glorious firm didn’t even finish in second place). We’ll have more on this later. [Am Law Daily]
* Yet another Biglaw firm just elected its first woman chair ever. Congratulations to Jami Wintz McKeon, the power litigatrix who will lead Morgan Lewis to great success in the coming years. [Am Law Daily]
* Some corporate “girl on girl action”: ex-employees of the National Association of Professional Women are now suing the organization over a female manager’s sexual harassment. [DealBook / New York Times]
* New Jersey’s AG is desperately trying to delay the issuance of same-sex marriage licenses after a trial judge’s ruling last week. At this point, the Garden State’s arguments are just livin’ on a prayer. [Bloomberg]
Earlier this week, we warned you about the layoff train. It’s coming down the track at breakneck speed, and there’s just no stopping it. We told you to watch out if you wanted to survive, but you didn’t believe us, and now yet another firm is facing significant cuts.
Which California-based Biglaw firm is slashing its headcount to “better position the firm for the future”?
You’d probably pack up too if you were in this secretary’s shoes.
Voluntary buyouts for support staff are going viral within Biglaw — and that’s a good thing, at least compared to the alternative of layoffs. As we’ve previously observed, “voluntary retirement programs allow employees to self-select, so that employees who are well-situated to enter unemployment can opt in, while employees who need their jobs badly can keep working.”
Whether you should accept or decline your firm’s buyout depends on many factors. What kind of savings or other assets do you have? How generous is the package being offered? Do you have a spouse who still works? Do you have dependents who rely upon your income?
We heard from one retired legal secretary in response to our recent request for volunteers willing to discuss why they took or didn’t take a buyout. You can see why this secretary entered early retirement, due to an enviable financial position and a delicious package….
Say hello to ‘Buyout Box,’ which we use in lieu of ‘Layoff Lady’ when covering voluntary retirement programs.
This past spring, McKenna Long & Aldridge made it into the Am Law 100, the nation’s 100 largest law firms by revenue. McKenna achieved this feat by posting an impressive 23 percent jump in gross revenue.
Now that it’s in the big leagues, McKenna is following the lead of other Biglaw firms by trying to get smaller (and more efficient). Like so many other top firms, it seeks to reduce its secretarial staff through voluntary buyouts….
The evolution of relationships between the genders continues. Currently, in law firms, there is an interesting conundrum; balancing the desire for a gender-blind workplace where “the best lawyer gets the work and advances” and the reality of navigating the complicated maze created by the fact that, in general, men and women do possess differences in their work styles. These variations impact who they work with, how they work, how they build professional connections and how organizations ultimately leverage, reward and recognize the talents of all.
Henry Ford sat on his workbench and sighed. A year earlier, he had personally built 13,000 Model Ts with his own hands. Fashioning lugnuts and tie rods by hand, Ford was loath to ask for help. Sure, there were things about the car that he didn’t quite understand. This explains the lack of reliable navigation systems in the Model T. But Ford persevered because he knew that unless he did everything, he could not reliably call these cars his own.
“Unless my own personal toil is responsible for it, it may as well be called a Hyundai,” Ford remarked at the time.
The preceding may sound unfamiliar because it is categorically untrue. And also monumentally stupid. Henry Ford didn’t build all those cars by hand. He had help and plenty of it. Almost exactly one hundred years ago, Henry Ford opened up the most technologically advanced assembly line the world had ever seen. Built on the premise that work can be chopped up into digestible pieces and completed by many men better than one, the line ushered in an age of unparalleled productivity.
Today, an attorney refers business because he can’t do everything the client asks of him.
There are three reasons why this is way dumber than a made-up Henry Ford story…
Ed. note: The Asia Chronicles column is authored by Kinney Recruiting. Kinney has made more placements of U.S. associates, counsels and partners in Asia than any other recruiting firm in each of the past six years. You can reach them by email: [email protected].
Since late last year, things have been booming in Hong Kong / China in cap markets, especially Hong Kong IPOs. M&A deal flow has recently been getting a bit stronger as well. Although one can’t predict such things with any certainty, all signs are pointing to a banner entire 2014 for the top end US corporate and cap markets practices in Hong Kong / China. This is not really new news, as its been the feeling most in the market have had for a few months now and things continue to look good.
The head of our Asia practice, Evan Jowers, has been in Hong Kong for about 10 days a month (with trips every other month to both Shanghai and Bejing) for the past 7 months, and spending most of his time there meeting with senior US hiring partners at just about all the major US and UK firms there, as well as prospective candidates at all associate levels and partner levels, and when in the US, Evan works Asia hours and is regularly on the phone with such persons, as our the other members of our Asia team. Our Yuliya Vinokurova is in Hong Kong every other month and Robert is there about 5 times a year as well. While we have a solid Asia team of recruiters, Evan Jowers will spend at least some time with all of our candidates for Asia position. We have had long standing relationships, and good friendships in some cases, with hiring partners and other senior US partners in Asia for 8 years now.