Initial jobless claims dropped slightly last week, to 470,000, which was slightly better than the previous week, but once again not in line with the expected 450,000. That actually caused the four-week moving average of initial claims to increase slightly, which isn’t usually a good sign.
But there may now be cause for guarded optimism. The US economy grew by 5.7% in the fourth quarter, the fastest pace in six years. That spending was in infrastructure, not directly in jobs, but it could presage increased staffing. President Obama is hoping to spur that along with a one-year, $33 billion tax credit for small-business new hires and a payroll-tax reduction.
On the whole, though, the week in law-firm economic news was relatively good. Details after the jump.
This week’s only law firm “layoff” is probably going to spark a bit of controversy: MoFo’s “Great Escape” of 50 people taking early retirement.
Yes, we count this as a layoff.
As we said in “Our Stance on Voluntary Severance,”
We treat buyouts and “voluntary redundancy” as layoffs for purposes of the tracker. They’re both cost-cutting measures that are only being implemented as a result of current economic conditions. The layoff tracker is a commentary on firms’ financial activities and vitality; offering buyouts has the same economic effect as layoffs do, albeit with a lesser amount of angst. People who were willing to leave firms in good times certainly didn’t have the ability to also collect an additional 3 months’ pay on the way out. Either way you look at it, these firms are paying for attrition.
In this particular instance, MoFo was looking to save on retiree medical, which can be a huge expense (just ask a car company) and is a benefit that has been disappearing from the benefits landscape for years. Even though our position was written in March 2009, the height of the layoff tide, the principle remains the same (plus, we have to be consistent).
One of the more-novel measures used last year was Norton Rose’s 4-day workweek, which reportedly saved 100 jobs. The program carried the firm through the roughest days and ended this week, three months earlier than planned.
We’ve noted previously that economic factors are all over the map this month, with some firms paying bonuses and others laying people off/cutting salaries/freezing salaries/etc. Wilson Sonsini wins hit both ends of the spectrum in just one week’s time by announcing staff layoffs last week and associate bonuses this week.
For every Chadbourne & Parke (market bonus, full true-up on deferred salaries, and a full salary thaw), there’s a Winstead (rescinding offers to two associates just days before their already-deferred start dates).
As the 2009 AmLaw 100 numbers start coming in, firms’ results are also scattered. Just this week, Paul Weiss reported the “most profitable year in the firm’s history“, Reed Smith broke $1 million PPP, and WilmerHale’s profits were also up – on lower gross in every case. But profits and revenues were down at Quinn Emanuel and Goodwin Procter.
Well, if law doesn’t work out, there’s always poker – and your skills might even stay fresh enough to beat a big firm without ever practicing.
This week’s layoff:
- Morrison & Foerster (50 staff)
So far this month and year, major law firms have laid off 135 people (45 attorneys, 90 staff).