Saturday, February 28, 2009

Law Street Blues

I've been watching the legal (gossip) news, wondering what was happening on the lawyer lay-off front. Last I heard, after the pre-Friday the 13th massacre, Friday The 13th, A Lucky Day for Lawyers, K&L Gates was going to decide on layoffs at the end of this month. Having spent some time there during my Pittsburgh days, I was interested in seeing what had happened.

However, when I checked the blog for all things gossip/legal, Above the Law, I was shocked to learn that 400 attorneys/staff had been terminated by Latham & Watkins, Latham Cuts 440 (190 Associates, 250 Staff), which is more than any law firm has ever done, short of dissolution, to date. As the Washington Post describes, Latham & Watkins Cuts 190 Lawyers:

In a vivid illustration of how the global recession is battering the legal profession, Latham & Watkins, one of the largest law firms in the nation, announced yesterday that it will let go 190 lawyers and 250 paralegal and support staff.

Latham & Watkins, which represents clients such as District-based Carlyle Group, Goldman Sachs, Harrah's Entertainment and UBS, has nearly 270 lawyers in Washington and more than 2,000 worldwide.

The firm is struggling with declining profits as corporate clients slash legal spending because of a reduction in mergers and acquisitions, capital finance and transactions. The job cuts are among thousands that have roiled through the industry in recent months.

In February, hundreds of jobs were cut at firms with District offices, including 243 at Holland & Knight, 134 at Bryan Cave and 29 at Dechert.

* * * *
Bob Dell, who is Latham's chairman and managing partner and works out of the firm's San Francisco office, said yesterday that the 440 jobs being eliminated represent 12 percent of the firm's associates and 10 percent of its paralegals. The cuts will occur in several of Latham's 28 offices, including those in the District, New York and Los Angeles, the firm said.
See also, Law Firm Layoff Watch: Latham Cuts 190 Lawyers, 250 Staff.

This follows news that Sonnenschein has decided to Shutter its' Charlotte Office, a "decision affects 11 lawyers and eight staff members." Not to mention that 53 people were laid off at Lowenstein Sandler -- 21 attorneys & 32 staff members (about 8% of the New Jersey firm's lawyers, Lowenstein Sandler Cuts 53 And Rescinds 3L Offers. They also rescinded offers to new hires, graduating law students who would have started in the fall.

This is apparently the newest thing in legalworld and is not limited to private firms. The Philly District Attorney's office just rescinded offers to its newly hired recruits. As reported by the Legal Intelligencer, Philadelphia DA's Office Rescinds Offers to Incoming Class of Lawyers:
Large law firms aren't the only ones faced with the stark reality of staffing concerns in this economy. The already budget-crunched Philadelphia District Attorney's Office -- a large law firm in its own right -- has had to do something it has never done: Rescind offers to its incoming class of attorneys.

The office rescinded offers to the 12 incoming attorneys who were set to start in the fall, according to Kathleen McDonnell, chief of legislation and head of the hiring committee in the District Attorney's Office.

McDonnell said it was a 'heartbreaking' decision that was only made after several other measures failed to improve the office's staffing situation.

The 300-attorney office typically sees about 10 percent attrition each year, which enables it to bring in a class of up to 35 people, as it did last year. But in this latest fiscal year, only about two people left, McDonnell said.
No news, however, on K&L -- except the signs are ominous. Above the Law reports, The Curious Case of K&L Gates, firm partner meetings and rumors of impending layoffs abound. Sounds like Monday may be the day for K&L (although one commenter notes that some people received COBRA notices, which suggests that the decision set for Friday, but was deferred for some reason). Even worse:
Just after 2:00 p.m. on a Friday, K&L Gates decided to send around a reminder to "all U.S. personnel" about the mental health services the firm provides . . . .

It's probably nothing. It's probably just a coincidence. People really are stressed all over, and nobody wants a layoff story to turn into a true tragedy.

But, the timing is certainly curious. Why would H.R. choose a random Friday at the end of February to remind people to take care of mental health during "life events and personal transitions?"

As a health law attorney, I (as well as my LLWL colleagues) have been very lucky so far. Health care has always been considered recession-proof, so we generally aren't impacted by the downturns in the economy the way other industries are. However, that may be changing, as the economy seems to continue its devastating downward spiral, and health care may be next. Will Consumers Keep the Health Care Industry Growing?.

This all certainly portends more bad news, which is now impacting those in the upper income reaches. As Law & More aptly observes, in Latham Cuts 190 Associates: End of Era of Magical Thinking:
America's middle and upper classes have had a genius for pulling off magical thinking or superimposing fantasy on what should be on reality. That might have just ended. Not only are we getting it that things are that bad. We're also digesting that this economic ordeal could go on for years.
UPDATE: Of course, after I wrote my summary of the week that was, Above the Law, along with Law Shucks, provides a comprehensive overview of the carnage. The totals are stunning, as noted by Law Shucks:
All told, 560 people were laid off by major firms this week - 252 attorneys, 308 staff. To put that in context, more people were fired this week than in any month in 2008. Last year, the two busiest months at major firms were December, which had 435 layoffs (186 attorneys, 249 staff), and November, which had 431 (223/208).

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