We previously picked up The Lawyer’s report that six senior Merrill Lynch lawyers were being laid off in the wake of the acquisition of the investment bank by Bank of America. Turns out, the report got almost the whole story wrong.
According to the ABA Journal, Merrill Lynch vice chairman and general counsel Rosemary Berkery BA, St. John’s JD) had been with the bank since 1983. Prior to that, she was an M&A lawyer at Shearman & Sterling.
This makes a bit more sense. Much like there can’t be two CEOs after a merger, there can’t be two general counsels, either. It typically takes a bit longer for the “synergies” to be realized at the next level down of functional areas. Eventually, there will be one head of litigation (although Eisenberg was already sharing that role at Merrill). Whether Eisenberg gets that job, stays on in a deputy role responsible for a particular line, or is let go, now remains to be seen.
The other interesting thing about inhouse layoffs, other than those in connection with a takeover, is that more often than not, it’s a measure of last resort. Usually, the first layer of fat trimming comes in the form of reducing outside counsel spend, which in many cases exceeds the payroll expense. Most inhouse counsel would rather just pick up the extra work than put jobs at risk. Of course, that spend reduction is what leads to the pay freezes and layoffs at the firms, which don’t have such a significant non-payroll expense to reduce.
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