This week seemed like it would start off relatively quietly after recent hysteria. The week ending February 20 was the first week in which major law firms laid off more than 1,000 people in a single week and, of course, the week prior to that we had “Black Thursday” or the “Valentine’s Day Massacre” (although I will always think of the Valentine’s Day Massacre as Drexel Burnham Lambert’s bankruptcy filing in 1990, which was also a slight misnomer, as it, too, actually occurred on February 13).
In fact, this week did start off relatively slowly, with just over 100 people laid off from firms such as Sheppard Mullin, Dechert, Linklaters, and Baker & McKenzie. Although rumors had been stirring for much of the week, it was only on Friday that official word broke of the massive cuts at Latham & Watkins.
Analysis and context after the jump.
In one fell swoop, Latham vaulted to the #2 spot on the ranking of firms by total layoffs. Latham’s 440 (190 associates, 250 staff) is second only to Allen & Overy, which has laid off 462 to date (260 attorneys, 202 staff). Linklaters is pushed to #3 (210 attorneys, 150 staff). Cadwalader (156 total), the firm that started this round, drops out of the Top 10 (although it remains in one black corner of our hearts).
In a final bit of irony, Latham is defending Thelen against claims that the firm violated the WARN Act when it dissolved last year and failed to pay or give notice to the terminated employees. The silver lining is that Latham’s severance package is very generous (up to 6 months’ pay, capped at $100,000, plus benefits throughout).
The London firms have been more aggressive than their US counterparts in laying off fee-earners. Ranked solely by number of attorneys fired, Allen & Overy and Links are 1 and 2, with Clifford Chance just 4 behind Latham, having laid off 186 attorneys so far.
Latham also takes over the top spot on the rankings for staff laid off, its 250 just edging out Holland & Knight‘s 243. That list is far more American-centric, with only British firms A&O, DLA Piper and Links in the top 10.
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).
We’re also noting the beginning of a trend toward collateral damage. Firms are finding a host of other cost-saving methods: delayed start dates (including Baker & McKenzie being particularly cheap about it), rescinded offers to 3Ls (including in the public sector at the Philadelphia DA’s office), fewer offers to 2Ls (and shorter summers for those who do get offers), and, of course, salary freezes have been in effect for some time now. Not surprisingly, layoffs are spreading throughout the firms’ offices outside the US/UK. The Central/Eastern European region is seeing heightened activity recently, as are the Middle East and southern Asia.
Updates to the Layoff Tracker:
- Faegre & Benson, which had previously laid off 29 lawyers, added another 67 staff to the tally. That’s not included in this week’s numbers, but is in the monthly and year-to-date accounts;
- McKee Nelson for 46 – 6 attorneys, 40 staff;
- Sheppard Mullin for 25 attorneys;
- Dechert for 10 staff;
- Linklaters (10 attorneys) and Baker & McKenzie (6 attorneys 5 staff) in the CEE;
- Lowenstein Sandler for 53 – 21 attorneys, 32 staff;
- Schiff Hardin for 11 staff; and
- Trowers & Hamlins (usual reason) - a UK firm that let go seven attorneys in the Middle East then followed up with four more from the UK real estate group;
- Roetzel & Andress, which I’m informed is an Ohio firm that has 223 attorneys in 10 offices, fired 31 – 13 associates, 18 staff;
- Similarly, Calfee Halter, apparently another Ohio firm, which laid off four lawyers (of 160) plus two staffers, mostly in Cleveland;
- Bilzin Sumberg Baena Price & Axelrod, which laid off at least four – one nonequity corporate partner, one real-estate associate (ironically, the MP was being interviewed about the firm pulling out of a $58 million lease) and two secretaries;
- Much Shelist Denenberg Ament & Rubenstein, a Chicago firm that laid off four staff and, not ”for economic reasons”, one attorney;
- Maslon Edelman Borman & Brand, a Minneapolis-based firm of 80 lawyers, which laid off five staff;
- Neal Gerber & Eisenberg, which terminated 19 of its 200 attorneys (the laid off included both partners and associates) and 32 staffers - the second round of layoffs for the Chicago firm;
- Dundas & Wilson, a “big four Scots firm,” which has begun a redundancy consultation for 50 - 25 lawyers, including equity partners (there are 78 equity partners, to give a little perspective on size of the firm), and 25 staff in Glasgow and London; and
- Hammonds, a UK national firm, for 20 partners (of 186 total partners, 74 equity).
We’re going to have to come up with some way of tracking stealth and other unconfirmed layoffs. And we have to put Paul Hastings on that list. Same for Dewey & LeBoeuf – like it or not, “performance” layoffs in this economy are going to be considered economic based unless and until the firms demonstrate that the same criteria are being applied year over year (e.g., Deidre Dare). Rumors abound that further cuts are in progress at Kirkland.
The numbers (“BigLaw” only):
560 for the week.
2,708 in February (1,104 attorneys, 1,604 staff).
4,248 in 2009 (1,798 attorneys, 2,450 staff).