Staff Layoffs

It’s either this sad box or the poor ‘Layoff Lady.’

Are the Weil Gotshal layoffs a harbinger of a rough second-half of the year for Biglaw? Early signs are not encouraging. Since last week we’ve seen office closings, secretary firings, and the amibiguous WilmerHale goings-on. There is a palpable tension in the wake of the Weil cuts. Where do we go from here? What, if any, will be the follow-on effect of Weil’s move?

In the wake of the Weil cuts, our friend Bruce MacEwen gave an interesting interview to Bloomberg Law’s Lee Pacchia. Bruce speculated that there is possibility of up to 10% overcapacity in Biglaw, and the supply and demand curves for legal talent have permanently shifted. In Bruce’s view, Weil is “very much ahead of the curve.” Ominous tidings for associates everywhere. There’s an interesting point in the interview where Pacchia wonders whether the legal profession will ever return to a “halcyon era” where law firm partners’ immediate self-interest is minimized in favor of long-term stewardship. Bruce, channeling Clubber Lang, responds that the only thing that will return us to that golden era, if it ever existed, is more pain.

Last week we conducted a research poll asking for your take on whether the Weil layoffs signal an oncoming reprise of the Biglaw bloodbath of 2008-09 or a singular phenomenon. Let’s look at the results of our poll and some choice highlights from your responses….

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In the dark days of 2009, we had frequent occasion to discuss the difference between “layoffs” and “performance-based dismissals.” Layoffs are generally understood as economically motivated, large-scale reductions in headcount, while performance-based dismissals involve specific individuals being asked to leave for cause. (Some see this as the difference being getting laid-off versus getting fired, although I’ve sometimes heard layoffs referred to as firings.)

The distinction can be a fine one. Unless cuts are made based on factors like seniority or practice area, layoffs often target weaker performers, so they can look a lot like performance-based terminations. There’s no bright-line cutoff, in numerical terms, for what constitutes a round of layoffs. And you can’t let firm characterization control, since many firms find it in their reputational interest to deny layoffs (unless the cuts are so large as to be undeniable; see, e.g., last week’s Weil Gotshal layoffs).

Today we bring you a story that captures this ambiguity. Several lawyers and staffers, totaling a number believed to be in the double digits, have been asked to leave a firm — but the firm denies that it’s conducting “layoffs.” We’ll present the facts and let you be the judge….

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Are legal secretaries the buggy-whip makers of Biglaw? If you lose your job as a legal secretary, is it worth it trying to find a new secretarial position, or should you get new training and try to switch fields?

The latter option might be better, at least if you are still early enough in your career. Check out this interesting (but depressing) article from the Wall Street Journal, Why Legal Secretaries Can’t Find Jobs. One of the secretaries mentioned in the article is still looking for a new permanent position some four years after he was Lathamed.

And, sadly, the layoffs of legal secretaries show no sign of abating. On the heels of the Weil Gotshal layoffs — in which 60 associates and 110 staffers, including 60 legal secretaries, lost their jobs — we have more cuts to report….

(Note the UPDATE after the jump.)

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Ed. note: This is a new series from Bruce MacEwen and Janet Stanton of Adam Smith Esq. and JDMatch. “Across the Desk” will take a thoughtful look at recruiting, career paths, professional development, human capital, and related issues. Some of these pieces have previously appeared, in slightly different form, on AdamSmithEsq.com.

Adam Smith, Esq. isn’t in the business of covering — or typically even commenting on — late-breaking news, but there’s news and then there’s news.

And the Weil layoffs were reported above the fold on the front page of the Wall Street Journal and as the lead story for much of the day in The New York Times‘ estimable “DealBook.”

To the affected associates and staff: Nothing comforting or reassuring can be said — this is dreadful, awful, horrible, bad bad news for you — but if you can gain perspective after awhile, remember that in America it’s no sin to be knocked down; the sin is not getting right back up.

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Some say that San Diego has the best weather in the continental United States. But it seems that the climate there might be less than hospitable for large law firms.

Last year, Baker & McKenzie closed its office in San Diego, finding the metropolis didn’t live up to its nickname of “America’s finest city.” And now we have news of another Biglaw firm shutting down its S.D. outpost.

It’s not on the scale of the massive Weil layoffs, but the closing could cause a significant number of lawyers and staff to lose their jobs. Here are the details….

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One of the more amusing law firm nicknames belongs to Weil Gotshal & Manges. As we noted a few years ago, some refer to the firm as “We’ll Getcha & Mangle Ya.”

Alas, the nickname is less funny in the wake of yesterday’s big layoff news. The firm announced it will be cutting 60 associates and 110 staffers from the payroll. Despite the generous six-month severance for associates, some probably feel like their legal careers have been mangled. The firm also plans to reduce the compensation of about 10 percent of its partners (roughly 30 out of 300, some income and some equity partners).

Let’s take a closer look at the layoffs and try to make sense of them….

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This year has seen a grim procession of law firm layoff news, which seemed to pick up momentum just yesterday with the Weil Gotshal lawyer layoffs and the Jones Day staff cuts. Are we looking at a 2008 redux, or is this just a bump in the road as the economy makes its slow recovery?

The Weil news was particularly stunning. If any firm seemed poised to thrive in the post-recession “new normal,” it was Weil, with its diversified practices and hegemonic restructuring group. Alas, with yesterday’s news of Weil’s decision to cut 7% of its associates and slash annual compensation for 10% of its partners by hundreds of thousands of dollars, it is clear that Biglaw job security is a thing of the past.

Let’s explore the reasons behind law firm layoffs, review a chronology of recent reductions, and obtain your views through a reader survey….

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The Layoff Lady gets around…

At the end of May, my colleague David Lat wondered, “Are layoffs becoming daily news in Biglaw once again?” Given recent events — in particular, the reckoning at Weil — we think it’s now fair to answer that question with a resounding yes.

Today, we’ve got news that a Biglaw shop known for its strict dress code and its fervent recruiting of Supreme Court clerks has decided to conduct a second round of layoffs, mere months after serving a slew of staffers with their walking papers…

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Since the Supreme Court’s ruling in Fisher, the major affirmative action case, turned out to be something of a dud, the big legal story of the day is the news out of Weil Gotshal. The firm is conducting large layoffs of both attorneys and staff, as well as reducing partner pay.

Thus far, many of our recent layoff stories have involved staff layoffs, especially secretarial layoffs; relatively small numbers of affected individuals; and firms not in the tippy-top tier of Biglaw. So that’s what makes the Weil news so notable — and so frightening.

Weil is an elite firm, in both profits and prestige. The cuts it just announced affect lawyers, not just staff, and reach into the triple digits….

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* I would totally go see “Jaws 2013: Lawyers On The Beach.” [The Legal Geeks]

* Downey Brand laid off support staff this week. Man, I thought that laundry detergent was recession-proof… oh, wait, I’m being told that Downey Brand is law firm, a very well-scented law firm. [ABA Journal]

* Sleep expert testifies in Michael Jackson case. Keeps jurors awake! [Expert Witness Blog]

* It’s illegal to burn you ex’s clothes? Bah. Next you’re going to tell me you can’t set fire to his car. [Legal Juice]

* Manhattan District Attorney Cy Vance’s inability to prosecute his political rivals makes it harder for him to do whatever he wants by threatening his political rivals with prosecution. That’s not exactly a bad thing. [Simple Justice]

* Oh look, the FAA might finally acknowledge that making people turn off their electronic devices during takeoff and landing is a stupid rule that has absolutely no bearing whatsoever on flight safety. [Wall Street Journal]

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