Turns out last week was just a break in the storm. When “only” 560 people in major firms lost their job, we thought it was a reprieve from the previous week’s bloodbath of 1,002 – 352 lawyers, 650 staff. Once again, our expectations have been shattered.
Cutting to the chase, 337 attorneys and 795 staff of major law firms have been let go this week – upping the record for the worst week of BigLaw layoffs to 1,132. That skews slightly more toward staff layoffs than we’ve been seeing from US firms, which were previously a little closer to 2 staff laid off for each attorney. UK firms have been closer to 1:1.
It was California firms wielding the axe this week – a trend we’ve noted previously. Orrick, which traces its routes back to San Francisco in 1863, (300 – 100 lawyers, 200 staff) and O’Melveny & Myers, founded in Los Angeles (200 – 90 lawyers, 110 staff), picked up where Latham & Watkins, founded in LA in 1934, left off last week. Orrick’s action was also notable in that the firm cut just under 20% of its non-partner attorneys. Most of the other significant cuts have capped out around 9-12% (although note that that list omits the UK firms).
Pillsbury Winthrop Shaw Pittman, founded in San Francisco (although involved in many subsequent major mergers), ended the week by announcing it had laid off 155 (55 attorneys / 100 staff). This time, the firm used a memo – correcting the horrendous botching of the disclosure by a partner on a train.
Sheppard Mullin laid off 25 lawyers two weeks ago, so that pretty much leaves Gibson Dunn; Irell & Manella; Manatt, Phelps & Phillips; Paul Hastings; and Quinn Emanuel as the major California firms that haven’t had layoffs yet. Most of those skew towards litigation, so perhaps there won’t be major cuts.
In addition to the folks at those remaining California firms, the silence out of New York is becoming deafening. Of the NY firms, only Cadwalader, Proskauer and White & Case have had significant announcements so far. Speculation is rampant at this point that there are further major cuts coming and/or that the NY firms have mastered the art of the “stealth” layoff (e.g., Schulte).
Further analysis and context of this week’s numbers after the jump.
In the broader markets (i.e., total non-farms jobs), reports of layoff numbers were mixed. Numbers for the week were better than expected, reportedly down to 639,000 from 670,000 in the previous week. A drop to 650,000 was expected. Revised numbers for February were worse than previously reported, though. ADP report 697,000 jobs cut for February against reports of 610,000 and 614,000 for January against previously reported 522,000. That’s a little bit of an apples-to-oranges comparisons (first-time unemployment filings versus job cuts), but we’re still seeing significant continuing activity. Unemployment rose from 7.9% to 8.1% this week, the highest rate since December 1983.
Closer to home, 4,200 jobs were lost in the legal industry in February. That’s a much broader market than what we track: it includes employees of smaller firms, and government, inhouse, and non-profit jobs. It’s also net of hires, so bear that in mind when comparing to the 2,708 layoffs we reported for February.
This week’s activity also saw another unfortunate milestone: the Top 10 firms on the Layoff Tracker have each laid off a minimum of 200 people.
So it’s clearly not safe at the London and California firms, everyone is waiting for New York and Chicago, and other markets are likely to follow soon (in fact, Kirkland & Ellis has some very ominous conference room bookings at press time). Atlanta’s King & Spalding is currently in the process of individually informing up to 80. But there is one ray of hope.
Only two major Canadian firms have had layoffs and the firms up north are significantly less leveraged than their US counterparts (although there may be cause for concern). For those on the fence, Joe Weisenthal has a few reasons he’s long on Canada.
As for the actual updates to the tracker,
* We added Schulte Roth & Zabel this week for laying off 20 attorneys (we’ll give the benefit of the doubt on the 10 voluntary departures), even though the events supposedly occurred in the Thanksgiving-Christmas timeframe. We’ve said before that unless demonstrated otherwise, we’re not buying firms’ claims that performance-based layoffs aren’t actually the result of stricter standards due to economic circumstances.
* We missed Wiggin & Dana’s original announcement of 14 staff being laid off (or we’ve lowered our standards), so they’re in this week’s numbers.
* Similarly, Andrews Kurth has laid off at least 20 lawyers, but word is just getting out now.
The wannabes
* Stone King Sewell, a UK regional firm of 200, laid off 16 staff;
* Armstrong Teasdale, a St. Louis firm that laid off 30, including seven attorneys;
* Stinson Morrisson Hecker, a Kansas City firm that laid off 30 staff (how is it that I’ve never heard of a firm that claims to have 340 lawyers – has anyone heard of them?);
* Burges Salmon, a Bristol, UK firm that has begun redundancy consultations for 18 lawyers;
1,132 for the week (337 attorneys, 795 staff) and the month.
5,408 for calendar 2009 (2,149 lawyers, 3,259 staff).
7,241 since January 1, 2008 (3,045 lawyers, 4,196 staff).
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foist!
foist!
This is a pain train – anyone know where the last stop is? Rumor is Simpson Thacher will be the first of the giants to begin the bloodletting.
This is a pain train – anyone know where the last stop is? Rumor is Simpson Thacher will be the first of the giants to begin the bloodletting.