Law Shucks, Layoffs

This Week in Layoffs: 01.23.10

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Ed. note: Above the Law has teamed up with Law Shucks, which has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.
Unemployment rose again last month, climbing higher in 43 states, which is particularly surprising when compared to the 36 states that reported improved numbers in November. Once again, it might have been worse, but for the curious ways in which the unemployment rate is calculated:

In another nationwide trend, long-suffering states like California and Michigan saw their jobless rates stabilize even as they continued to bleed jobs. That’s because thousands of frustrated workers gave up hunting for work and dropped out of the labor force, which means they aren’t included in the unemployment rate.

Contrary to common sense, the unemployment rate isn’t calculated based on the total number of people who don’t have jobs, so people becoming so frustrated they quit looking actually improves the number (even though they’re certainly telling their friends they’re unemployed because, you know, they don’t have jobs).

Overall, 85,000 jobs were lost in December (compared to a 4,000 job increase in November) – but 600,000 people left the labor force in the same period. So the numbers are even worse than the record levels they’re currently reaching. For example, New York’s unemployment rate is nine percent, a 26-year high, and New Jersey’s 10.1% is a 33-year high.

The trend isn’t looking much better lately, either. First-time jobless claims rose 36,000 to 482,000 last week, once again surprising economists, who had a consensus estimate of a slight decrease (although this week’s numbers might be slightly off due to estimating necessary as a result of the Martin Luther King holiday). That marks the first time the four-week rolling average has increased in 19 weeks.

But that’s the big picture. After the jump, the goings on in the legal sector.


Once again, the layoff numbers were good (other than for the individuals affected, obviously), with just one firm reporting layoffs this week. That’s the third week in a row that just a single firm has confirmed laying people off.

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Also similar to last week, the news was all over the place.

According to the Law Shucks Bonus Tracker, Goodwin Procter and Latham & Watkins announced bonuses last week. Latham was well above market (subject to a host of footnotes). Even with the good news, there are clouds on the horizon. Goodwin also thawed salaries, but indicated it’s considering moving away from lockstep.

Other firms announced cost-cutting measures of various degrees (and with varying degrees of clarity). Cooley unfroze salaries, albeit with slight “freezer burn,” but Bryan Cave kept the freeze on. And Sidley Austin said something about salaries, but didn’t provide any concrete information at all. Morgan Lewis shed little light on the details of its departure from lockstep. Drinker Biddle provided more detail on its plan, but it wasn’t good: 53% of associates had their base pay cut.

Dorsey & Whitney associates can rest assured that they’re not on the chopping block, despite fears from an improperly completed WARN notice by the firm. Well, all the associates except the one who can’t even fill out the form correctly.

From the schadenfreude file, associates will get some dark pleasure out of news that partners are becoming equally terminable:

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Clifford Chance (CC) is set to make exiting underperforming partners easier for management as part of its plans to amend its governance structure.

The proposed change to the partnership deed would see management removing partners’ right to protest a termination notice through a vote of the partnership, giving the 17-member management committee, led by managing partner David Childs, the final say.

As it stands, partners asked to leave following a poor performance review and a warning period can dispute management’s decision by taking it to a vote of the partnership.CC is also proposing to shorten the warning period for under-performers from 12 months to between nine and 12 months.

As part of the same drive to improve partner performance, CC is planning to tighten its partner appraisal system by formalising an annual review process that will see partners across all offices appraised on the same criteria, including billing and business levels.

But most importantly, lawyers who graduated way back in May of 2009 had their first day on the job this week. Although surely none of them had such exciting weeks as the first years at Sterling, Huddle, Oppenheim, & Craft did.

Details on this week’s layoffs, plus the running monthly totals in the conclusion of the article on Law Shucks.

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