JD Journal » economic meltdown

Weil Gotshal Nabs Former Senate Committee Special Counsel

joshua — Thu, 22 Apr 2010 16:07:58 +0000

Heath Tarbert, former special counsel to the U.S. Senate Committee on Banking, Housing and Urban Affairs, has joined Weil, Gotshal & Manges as counsel.

Tarbert was a lead expert and negotiator in Capitol Hill’s effort to enact comprehensive financial reform legislation that came in the wake of the economic meltdown. He provided a particular focus on prudential regulation of banks, thrifts, non-bank financial institutions and their holding companies, as well as measures aimed at the reduction of systemic risk in the U.S. financial system, the firm said in a press release.

Tarbert also served as associate counsel to President Obama from August 2008 to January 2009. He was at the center of the legal decision-making during the financial crisis that intensified after the collapse of Lehman Brothers in September 2008.

“Heath has made an invaluable contribution to the committee’s work on financial regulatory reform,” said Richard Shelby, ranking member of the Committee on Banking, Housing and Urban Affairs. “His expertise and dedication will be sorely missed. I am grateful for his service and wish him all the best as he takes on a new challenge.”

Tarbert is the third notable public figure to recently join Weil Gotshal. He follows the arrival of William Burck, former special counsel to the president and federal prosecutor, and Steven Tyrell, former chief of the U.S. Department of Justice’s Fraud Section.

Weil Gotshal’s Washington office was established in 1975 and has 30 partners and 81 attorneys.

Dykema Cuts 17 Attorneys, 30 Staff [Correction]

Erik Even — Wed, 24 Jun 2009 17:01:29 +0000

This week, big law firm layoffs are back. Dykema, which according to a JDJournal tipster has laid off at least 20 lawyers and 30 staff since November, this month let go 17 attorneys and 30 staff, in what appears to be a separate round of cuts., has confirmed that 17 attorneys and 30 staff have been let go since November 2008.

Severance packages were offered. The layoffs were blamed on the economy.

Dykema Gossett PLLC is a law firm headquartered in Detroit, Michigan. Founded in 1926, the firm has offices across the United States, including Chicago, Dallas, Los Angeles, and Washington, DC. It currently employs over 450 lawyers and lobbying professionals. With the 2008 acquisition of 53 lawyers from the now-defunct Schwartz Cooper, Dykema’s largest office is now in Chicago.

UPDATE

The following statement is from firm chairman Rex Schlaybaugh:

Given the current market conditions, which have affected virtually every industry across the nation, we made the difficult decision to reduce our lawyer ranks by 17 and our staff population by 30 nationally. The firm has provided those who are leaving with severance benefits during this difficult time. This reduction is based on the economic climate. Dykema has a strong and conservative balance sheet, but it is essential that we protect and maintain that strength. The firms that are most effectively managed during tough times will not only survive but will emerge stronger.

Blake Lapthorn Redundancy Targets 33

Erik Even — Wed, 20 May 2009 16:25:14 +0000

Blake Lapthorn has launched its third redundancy consultation in the past nine months, targeting 33 positions in business services and secretarial at the firm’s UK offices.

Lawyers may also be affected. The firm blames the economic meltdown.

Blake Lapthorn laid off 33 people at the end of last year, and 20 employees in March.

Blake Lapthorn is a UK law firm with over 100 partners and a total staff of over 700. They are the leading firm in the South East of England, and have a network of offices in London and across the region – in Southampton, Winchester, Oxford and Portsmouth.

Fennemore Craig Cuts 7 Lawyers, 10 Staff

Erik Even — Fri, 15 May 2009 22:40:46 +0000

Phoenix, Arizona-based law firm Fennemore Craig has announced it cut 17 jobs.

Ten staffers were let go this month; and seven attorneys were shown the door this February. The firm blames the economic meltdown.

Business law firm Fennemore Craig, PC employs over 200 attorneys, across offices in Phoenix, Tucson, and Nogales, Arizona; Las Vegas, Nevada; and Denver, Colorado.

The firm offers legal services in financial restructuring, bankruptcy, and creditor’s rights, commercial litigation, estate planning, government relations, and intellectual property. The firm also offers services in American Indian law.

Fennemore Craig is one of the oldest law firms in the Mountain West, first established in Phoenix in the Arizona Territory in 1885. It is the oldest law firm in Arizona. In 2008, the firm was listed number 220 on the The National Law Journal 250.

Blake Dawson Layoffs Tomorrow

Erik Even — Thu, 12 Mar 2009 16:40:30 +0000

Blake Dawson will announce redundancies tomorrow, Friday the 13th, with “less than 100″ people affected.

The firm says the cuts are all related to the global economic meltdown.

This will be the second round of redundancies at the Melbourne, Australia-based firm, as at least four property and finance lawyers have been laid off since the beginning of the year.

If you know anything about impending layoffs at Blake Dawson, please send us a confidential tip!

Blake Dawson is a commercial law firm that operates in the Asia-Pacific region. In Australia it is considered one of the top commercial law firms.

Blake Dawson was previously known as Blake Dawson Waldron or BDW. The firm shortened its name to ‘Blake Dawson’ in November 2007.

DLA Piper Lays Off 54 in Asia

Erik Even — Tue, 03 Mar 2009 17:38:31 +0000

DLA Piper announced today it is laying off 20 lawyers and 34 staff across its Asian offices, in response to the global economic meltdown.

DLA Piper has in recent years built up one of the largest Asia practices of any international law firm, with offices in Hong Kong, Beijing, Shanghai, Singapore, Tokyo, and Bangkok.

The majority of the cuts were in the Hong Kong office, the firm’s largest in the region, with over 100 lawyers. The layoffs were primarily focused on transactional practices.

DLA Piper is one of several firms that built large practices in the area in anticipation of a continued stream of initial public offerings by emerging Chinese companies.

DLA Piper’s Asia restructuring comes weeks after DLA Piper announced sweeping layoffs in the United States, cutting its ranks by 80 associates and 100 staffers. The firm has also had layoffs in the United Kingdom.

Confirmed: Orrick Cuts 300 Employees

Erik Even — Tue, 03 Mar 2009 17:19:46 +0000

As predicted, Orrick Herrington & Sutcliffe is laying off a total of 300 employees.

Orrick has begun a firmwide reduction in its workforce in the United States and Asia and redundancy consultations in Europe that will affect approximately 100 associates and 200 staff. These actions are made necessary by the world economic crisis and the impact of that crisis on our clients and the levels of activity in the world market. These actions are unrelated to performance and affect attorneys and staff throughout our offices and practices. We will provide severance pay and outplacement services and otherwise work to assist with the individual transitions.

Laid off attorneys will get a three month severance package.

The San Francisco-based firm, founded in 1863, has over 1,100 lawyers worldwide in 21 offices. The firm’s day-to-day administrative operations are centralized at a Global Operations Center in Wheeling, West Virginia.

Stone King Sewell Lays Off 16

Erik Even — Sun, 01 Mar 2009 18:32:11 +0000

Stone King Sewell, which employs 200 people across four offices, has made a total of 16 redundancies, including 10 staff from its Bath, UK HQ.

Workers have been told the volume of work had slowed considerably in the economic downturn.

It is believed its property team has been hit hardest, with eight out of 10 jobs eliminated

Staff were told there were no further proposed job cuts, as bosses at the firm believed actions taken now would protect it in the future.

Stone King Sewell has offices in Bath, Cambridge, Cirencester and London.

NLJ: Firms Hired Too Many Law School Grads in 2008

Erik Even — Fri, 20 Feb 2009 17:37:17 +0000

The National Law Journal reports that major firms brought on as many new associates in 2008 as they did in 2007, leaving them with many new hires despite the current industry-wide layoffs.

Despite the economic nosedive that began gaining momentum in 2008, the nation’s biggest law firms hired just about the same percentage of graduates from top schools last year as they did the year before.

At the same time, firms among The National Law Journal’s 2008 survey of the nation’s 250 largest law firms brought aboard more graduates from the 20 schools that they relied on the most, which themselves had larger classes.

The development suggests that law firms were not well positioned for the recession they now face.

The fact that law firms ended up hiring the same percentage of graduates in 2008 — and hired 5.3% more graduates than in 2007 — despite the impending economic turmoil demonstrates the challenges that law firms face in predicting their work force needs under the existing hiring system…

Via NLJ.

Massachusetts Top Judge: Court Layoffs “Shortcut to Anarchy”

Erik Even — Tue, 17 Feb 2009 16:54:27 +0000

The Boston Globe reports that the economic meltdown could have a devastating impact on the American justice system, as courts are forced to lay off employees and cut down on court hours, according to Massachusetts’ top judge.

“I shall be blunt: Our state courts are in crisis,” Supreme Judicial Court Chief Justice Margaret H. Marshall told members of the American Bar Association at its midyear meeting…

New Hampshire’s judicial branch will halt civil and criminal jury trials for a month to save on per diem payments to jurors. It will also postpone filling seven of the state’s 59 vacant judgeships this year. Budget cuts in Florida have left 280 court employees without jobs and more layoffs are expected. In Maine, the courts have loosened security, no longer staffing magnetic security machine checkpoints at local courthouses…

Courts may have to close civil or criminal sessions or consider consolidating. Those changes could reverberate through the system, she said, slowing the courts down again.

And she noted that about half the state’s courthouses are staffed at “below minimal levels” as determined by an objective national staffing model…

She quoted legal scholar Reginald Heber Smith, calling the denial of justice “the shortcut to anarchy.”

Via Boston Globe.

Wolf Block Slashes Associate Salaries

Erik Even — Fri, 13 Feb 2009 17:45:09 +0000

Wolf Block is cutting associate pay by 10%, which will go into effect at once.

Other firms have frozen salaries for 2009, but Wolf Block appears to be the first US law firm to cut salaries in response to the economic meltdown.

WolfBlock LLP, formerly Wolf, Block, Schorr & Solis-Cohen, is a law firm and lobbying group based in Philadelphia, Pennsylvania. The National Law Journal ranked WolfBlock the 143rd largest firm in the US, and the 10th largest in Philadelphia, by number of attorneys. The firm is best known for its lobbying and government relations practice, as well as for being one of the oldest law firms in Philadelphia.

In 2008, WolfBlock had planned a merger with the Miami, Florida’s Akerman Senterfitt, to create a single 800-lawyer firm. But in August, the two firms released a joint statement explaining that the merger had been put on hold due to “a client conflict that cannot be discussed publicly.”

Merchant & Gould Cuts 8 Lawyers, 25 Staff

Erik Even — Wed, 11 Feb 2009 23:24:23 +0000

Minneapolis intellectual-property law firm Merchant & Gould is cutting 33 jobs, or 13% of its work force, citing the economic meltdown.

The cuts include two partners, two patent agents, four associates and 25 other employees. The firm now has 215 employees, down from 248.

The firm has offices in Denver, Atlanta, Knoxville, Omaha, Seattle, and Washington, DC.

Prior to the cuts, Merchant & Gould was the 15th-ranked law firm in the Twin Cities by number of local lawyers.

Massachusetts Lawyers Expect to Make Less This Year

Erik Even — Wed, 11 Feb 2009 16:52:12 +0000

Nearly 79% of Massachusetts Bar Association members who responded to an online survey believe the economic downturn will affect the entire legal profession, and about 49% expect to earn less this year than last year.

The results are based on a 13-question survey e-mailed to members in December.

About 51% expect the downturn to last until 2010, while roughly 18% anticipate the tough times to extend into 2011.

The bar association reported that most survey respondents have been practicing law for more than two decades, and earn between $100,000 and $200,000. Just over one-half of the respondents work for a firm with fewer than 25 lawyers, while about 30% are solo practitioners.

Firms Struggle in the Economic Downturn

todd — Fri, 23 Jan 2009 00:53:41 +0000

As the economy crashes further into recession, law firms are doing some major renovations. Many partners who have lost their jobs will be scrambling to look for a permanent position.

“This is the month to watch,” legal consultant Colin Beebe says. “In January and February, you’re going to see a lot of partners calling and asking, ‘How do I get take?’”

Consultants say there are many different scenarios taking place. Some partners have practices which are getting pushed out of firms that are looking to streamline operations. Others are looking to find a more financially sound outlet for their business. Still, some partners are getting recruited by firms that view the difficult economic times as a way to acquire talent that they otherwise wouldn’t be able to.

“I’ve been encouraging firms to hug their laterals close to them,” says Dan DiPietro, who is the client head at the Law Firm Group at Citi Private Bank. “Last year and this year will be a real test for the cohesiveness of firms.”

Neal Gerber Fires Attorneys

Erik Even — Fri, 16 Jan 2009 18:24:41 +0000

Chicago’s Neal, Gerber & Eisenberg, a 200-lawyer firm specializing in real estate, litigation and mergers & acquisitions, has cut attorneys following annual performance reviews.

The firm this month cut ‘fewer than 10 attorneys’ across various practice groups, according to Jerry Biederman, the firm’s managing partner. He should hire a second grader who can actually count to ten, so we can know how many people got axed.

Biederman left open the possibility that the firm may have to make additional cost reductions if the economy continues to sour and negatively impacts law firm work. But the new Obama Administration’s proposed stimulus could accelerate companies’ disposal of real estate and other assets, and thereby boost transactional work.

The Obama Administration and its legislative priorities may also spur more work for law firms in practice areas related to healthcare law and labor unions and organizing, Biederman said.

Wildman, Harrold, Allen & Dixon, another Chicago firm with about 200 attorneys, said last week that it was cutting 10 attorneys, including five income partners and five associates.

Via Law.com.

Wildman Harrold Lays Off “Approximately” 10 Attorneys [Update]

Erik Even — Mon, 12 Jan 2009 22:40:20 +0000

Wildman Harrold Allen & Dixon has confirmed that the Chicago-based law firm has laid off “approximately” 10 attorneys. About half are non-equity partners and the rest are associates.

If anyone knows how you can lay off “approximately” 10 attorneys, please comment below. Approximately 1,000, that I get. Approximately 10? You’re not sure if it’s 9, or 11? Maybe it was 9.8 attorneys? What’s the exact margin of error here? Could someone at Wildman Harrold stick their head out of a cubicle and get an accurate count?

But I digress.

No one practice area was targeted, the firm said. The layoffs were part of a standard annual review process, although “obviously the current economic conditions bring heightened attention to these otherwise normal business processes.”

Seven attorneys will join the firm this month, including three new partners who formerly were with a California affiliate of New York City-based Dreier; and four new associates who will be arriving later in January.

UPDATE

We now know that Wildman fired five income partners and five associates.

Kirkland & Ellis Showing Associates, Partners the Door

Erik Even — Fri, 09 Jan 2009 21:32:03 +0000

Kirkland & Ellis is edging some senior associates and income partners toward the door as part of its “regular annual evaluation process.”

The Chicago-based firm has asked the lawyers to look for other work as the economy slows work in some areas. According to rumors, the firm has asked up to 25 non-equity or “non-share partners” to leave.

The law firm has long had a large 250-to-300-lawyer group of income partners, also known at the firm as non-share partners, because it tends to promote lawyers to this level earlier in their careers than some other firms, typically moving them up the chain from associate level after they’ve been at the firm a little more than six years. These lawyers are well-paid, making between $275,000 and $400,000, and unlikely to leave on their own.

The economic meltdown has slowed work in a variety of practices, including the real estate, corporate, securitization and transactional areas. Some practice groups, such as restructuring and bankruptcy, have seen a rise in demand.

Via The NLJ.

DLA Piper Freezes Associate Salaries

Erik Even — Mon, 05 Jan 2009 00:10:53 +0000

DLA Piper associates were greeted with this email on Friday:

2008 has indisputably been one of the most challenging economic periods in recent history. DLA Piper, because of its global platform and practice diversification, is well-positioned competitively and financially to weather this downturn, but neither we nor our clients are immune from its impacts. This difficult business environment is certain to continue in 2009, and as a matter of prudent management, the firm will not increase associate salaries for 2009 in the U.S. Associates moving to the next class year will continue to receive the same base compensation as they received in 2008. Consistent with our past practice, decisions for regions outside the US will be made on a market by market basis.

We have exceptional associates and we value you greatly. We will continue to reward outstanding performance through our bonus program. Bonuses for 2008 will be determined and paid in late January or early February. The 2009 Bonus Program will be the subject of our usual Executive Committee review and discussion process, and its specifics will be announced at some point in the first quarter.

We are grateful for the market opportunities DLA Piper has, and for the loyalty of our clients. Our primary purpose in 2009 should be remaining close to them and understanding their business and legal needs in order to provide them with exceptional service.

According to Above the Law, this isn’t helping with DLA Piper’s reputation for being notoriously cheap:

Well, it’s only been an hour, but I think it’s a terrible move. DLAP already has a reputation as a scrimper among the top-50 – this will not help.

Murder Defendant Denied Counsel, Sues Public Defenders

Erik Even — Sat, 03 Jan 2009 17:00:23 +0000

A murder defendant who has been denied legal representation for eight months is suing the head of the Georgia public defender system.

“This is surely an unprecedented deprivation of counsel in modern times,” said the lawsuit, filed for Jamie Ryan Weis by prominent Atlanta lawyers Stephen Bright, Sarah Geraghty, Ed Garland and Don Samuel.

Prosecutors are seeking the death penalty against Weis for the 2006 killing of Catherine King.

Since April, Weis has been sitting in jail awaiting trial without lawyers to represent him. The lawsuit was filed after trial judge Johnnie Caldwell scheduled a January 5th hearing on the case.

“It’s frustrating,” Pike County District Attorney Scott Ballard said. “We’ll be ready to prosecute just as soon as they’re ready.”

The suit was filed in Fulton County Superior Court against Robert “Mack” Crawford, director of the Georgia Public Defender Standards Council, and Gerry Word, acting head of the capital defender’s office.

Weis’ case has highlights the budgetary problems plaguing the state’s public defender system.

Weis’ two appointed lawyers, Bob Citronberg and Tom West, were removed from the case in November 2007 when the cash-strapped defender system did not have the money to pay them.

Two local public defenders were ordered to take over the case, but they objected, saying they already had crushing caseloads and had neither the time nor the resources to defend a capital case.

At a court hearing in April, an agreement was reached to return Citronberg and West to the case, provided that Crawford sign a contract allowing them to be paid. That has yet to occur.

Crawford should have signed the contract long ago, the suit said. ”He should not have delayed the reinstatement of counsel for eight days; the delay of eight months is unconscionable.”

Weis’ suit seeks a court order reinstating Citronberg and West as his lawyers.

Separately, the lawyers filed a motion Wednesday in Pike County objecting to Monday’s court hearing because Weis has no criminal defense lawyers.

Via AJC.com.

Roberts: Federal Judges Need Pay Raises

Erik Even — Fri, 02 Jan 2009 17:16:41 +0000

Despite calls throughout the nation for state and federal employees to take pay cuts or involuntary furloughs to save tax dollars in the economic meltdown, US Supreme Court Chief Justice John Roberts Jr. is demanding that Congress pass pay raises for federal jurists as soon as possible.

In his year-end report on the state of the federal judiciary, Chief Justice Roberts praised the courts as frugal, dedicated and crucial to the life and economic recovery of the nation. But to keep the courts strong, Roberts said, Congress needs to pass pay raises, or at least cost-of-living increases, for federal judges.

“Given the judiciary’s small cost, and its absolutely critical role in protecting the Constitution and rights we enjoy, I must renew the judiciary’s modest petition: Simply provide cost-of-living increases that have been unfairly denied!” Roberts wrote in his report. “We have done our part — it is long past time for Congress to do its.”

In 2007 the judiciary committees of both the House and the Senate endorsed substantial pay increases, but the bills languished as the financial state of the nation worsened.

Roberts says judges are the only federal employees to begin 2009 without a cost of living increase.

District court judges are currently paid $169,300 — the same as members of Congress — while circuit judges are paid $179,500, associate Supreme Court justices $208,100, and the chief justice $217,400.

Roberts emphasized that the judiciary is a bargain for taxpayers whose benefits to society far outweigh its costs.

Noting that the budget of the judicial branch in 2008 totaled $6.2 billion, Roberts said, “That represents a mere two-tenths of 1% of the United States’ total budget. Two-tenths of 1%! That is all we ask for one of the three branches of government — the one charged to guard the Constitution and the rights of individuals.”

Roberts devoted several pages of his report to the cost-cutting measures the courts have undertaken to limit rent, personnel and information technology costs. Taken together, these measures should save up to $300 million through 2017, Roberts reported.

Via Legal Times.

Orrick Freezes 2009 Associates and Consultant Pay

Erik Even — Mon, 29 Dec 2008 23:30:56 +0000

Frisco’s Orrick, Herrington & Sutcliffe LLC will freeze associate and consultant salaries in 2009. Associates were notified by the following e-mail, sent to Legal Times by Orrick’s Adi Weisman:

…associates in the U.S. and Europe, and associates, senior consultants and consultants in Asia, will receive the same salary in 2009 as you received in 2008… of counsel salaries will be determined on an individual basis and generally will remain the same as 2008. We will ensure that our 2009 bonus program gives us additional flexibility to reward outstanding performance and remain competitive in the marketplace.

The firm blames the economic meltdown for the decision. As for bonuses:

We will pay full 2008 bonuses according to the terms of the program we announced earlier this year. These bonuses will be paid by the February 15 payroll in the U.S. and on or around that date in Europe and Asia, consistent with regional practices.

Orrick reported gross revenue of $772 million in this year’s Am Law 100, and profits per partner of $1.66 million.

The firm has over 1,100 lawyers worldwide in 21 offices, with more than 200 attorneys in each of its two largest offices in San Francisco and New York. The firm’s day-to-day administrative operations are centralized at a Global Operations Center in Wheeling, West Virginia.

Latham & Watkins announced pay freezes two weeks ago.

Via The BLT.

Law Firms Race to Collect Year End Billings [Video]

Erik Even — Mon, 29 Dec 2008 21:51:34 +0000

Via LawCrossing.com:

At year’s end, white-shoe law firms race to collect the bulk of the year’s client fees by the end of December.

This year is different though, with a number of law firm managing partners worried that the current recession will make the job of collection even tougher.

Most law firms bill every three months, or even every six months, which is why the payments take so long to come through. Law firms typically use traditional methods of collection, such as calling clients and reminding them to pay with the partner involved often making the phone calls.

Many merger and acquisition deals fell through in Wall Street’s downfall, which makes it likely that some clients will balk at high fees for deals that never got done.

– Martine Beerman

LA’s Pircher Nichols Lets Go 12 Employees

Erik Even — Tue, 23 Dec 2008 23:14:58 +0000

Pircher, Nichols & Meeks, a 75-attorney firm specializing in commercial real estate with offices in Los Angeles and Chicago, has announced that it is laying off eight attorneys and four staff.

Leo J. Pircher, founding member, said “commercial real estate work has declined in the last six months and our clients have told us that it is not likely to pick up substantially in 2009.”

Pircher praised the laid off attorneys and staff as “fine and competent people,” but “there certainly isn’t enough commercial real estate work to go around.”

Layoffs are already occurring at smaller firms but are typically unnoticed in “ones and twos,” said Jon Lindsey of legal recruiting consulting firm Major, Lindsey & Africa.

Small firms are more likely to keep people when work slows down, but this is not an ordinary slowdown, Lindsey said.

“Layoffs are tough at a small firm, where the person making the decision knows you, your family, your situation. It is harder to pull the trigger,” Lindsey said. “But this economy hurts everybody.”

Via Law.com Small Firm Business.

Two Thirds of Law Firms Expect Lower 2009 Revenues; 51% to Terminate Staff

Erik Even — Tue, 23 Dec 2008 19:13:50 +0000

Two-thirds of all US law firms expect lower 2009 revenues, although the economic harm to date has mostly hurt large firms, according to a new Altman Weil survey.

Large law firms, those with more than 250 lawyers, in the major legal markets of New York, Chicago, Washington, San Francisco and Los Angeles have felt the most impact on revenue.

In those five major legal markets, large law firms’ accounts receivables collections within 90 days of billing dropped by an average of 4.2% in the third quarter of 2008, compared tolast year.

Nationwide, large law firms’ accounts receivables collections dropped by an average of 2.9% in the third quarter of 2008.

“Large and major market firms have larger clients who tend to manage money better and are probably hoarding cash if they can,” said Altman Weil’s James D. Cotterman. “Legal is not as important as the electric bill or key raw material suppliers.”

About 66% of law firms expect lower revenue next year, compared with the 26% that anticipate little or no change and 8% that look forward to higher revenue.

Half of all firms plan to make minimal or very selective hikes in billing rates next year; 14.3% plan to tie billing increases to the Consumer Price Index; and 4% plan to keep the same billing rates.

Firms responding to the survey also cited five top ways they planned to conserve cash in the near term, including: cutting operating expenses (81%); deferring capital expenditures (76%); terminating staff (51%); terminating associates (38%); and increasing partner capital (38%).

Altman Weil collected responses from 85 firms.

Thacher Proffitt Dissolves; Sonnenschein Rescues 100 [Update]

Erik Even — Mon, 22 Dec 2008 18:19:18 +0000

Chicago’s Sonnenschein Nath & Rosenthal has announced it will hire 100 lawyers (NYT says 40) away from New York CIty’s Thacher Proffitt & Wood.

Bailout talks with King & Spalding have collapsed, and Thacher Proffitt will dissolve today.

Founded in 1848, Thacher Proffitt’s clients included many of the biggest banks and investment banks, including Citigroup and UBS. In 2006, the firm was ranked among the top 200 by The American Lawyer. But It was one of the leading firms behind the creation of the sort of mortgage-backed securities that fueled the lending spree that has since backfired on the banks.

We will update this post as the situation evolves.

Via Above the Law and NYT.

UPDATE:

Confirmed by Law.com:

Sonnenschein, Nath & Rosenthal announced late Sunday that 100 lawyers, including 40 partners, from Thacher Proffitt & Wood will be joining the firm’s New York office, effective January 1. The hires increase Sonnenschein’s total headcount to about 800 lawyers, nearly doubling the size of its New York office…

Sonnenschein is drawing from all of Thacher’s existing practices, including structured finance (representing the largest number of additions, with 26 partners and of counsel), corporate, banking, real estate, regulatory and litigation.

Latham & Watkins Freezes Salaries at 2008 Levels [Update]

Erik Even — Wed, 17 Dec 2008 22:51:39 +0000

Los Angeles-based Latham & Watkins is freezing 2009 salaries at 2008 levels.

While we anticipate that the diversity of our practices and global reach will serve us well in the year to come, it seems clear that the global economy will continue to be challenged at least through 2009. As a result, we are modifying associate compensation as part of a prudent business strategy. Effective January 1, 2009, associates moving to the next class year will continue to receive the same base compensation as they received in 2008. …

We expect as a general matter to continue to reward outstanding performances through our merit-based bonus pool. As in previous years, we will announce bonuses in late January.

Above the Law notes that, unlike other firms, Latham does not promise to reexamine the salary situation in Q1. Latham associates can probably expect a pretty lousy 2009.

Happy New Year, Latham & Watkins!

UPDATE:

Law.com suggests that the Latham salary freeze may start a trend:

“Everybody’s been waiting for some kind of signal from the market leader,” said consultant Peter Zeughauser, founder of The Zeughauser Group. “This will be a profound signal to the market about what to do.”

“Meltdown Task Force” Becomes “Madoff Task Force”

Erik Even — Wed, 17 Dec 2008 00:29:00 +0000

The WSJ Law Blog writes about Susman Godfrey:

Susman Godfrey is trying to put its “financial fraud task force,” which the firm says was formed recently in response to the meltdown, to good use.

In a press release the firm says its task force has “launched a comprehensive investigation into the collapse of Madoff Investment Securities, LLC. On behalf of clients who invested either directly with Madoff or through investment advisors who entrusted money to Madoff, Susman Godfrey already has gathered extensive information about Madoff Investment Securities and various feeder funds, such as Ascot Partners, L.P., Rye Select Funds, and others.”

Founded in 1980, Susman Godfrey has offices in Houston, Dallas, Los Angeles, Seattle and New York.

Associates’ Bonuses Drop In Bad Year For Legal Biz

Erik Even — Tue, 16 Dec 2008 23:16:13 +0000

From The American Lawyer:

Want an early look at how law firms will end 2008? Check out their associate bonus memos.

Of the 14 firms whose memos have made it onto the blogosphere, all but one in some way refer to the economy or firm finances in explaining why bonuses are down this year….

Take Debevoise & Plimpton…. The memo its associates received Dec. 9 notes deal work in 2008 has dropped, suggesting the firm is bracing for weaker results.

…

Much of the bonus attention has focused on Skadden, Arps, Slate, Meagher & Flom and Cravath, Swaine & Moore, since they were the first two firms to pull the trigger on bonus announcements. … Skadden, diversified internationally, said of 2008, “the level of the firm’s business continues to be relatively strong, with our total workload, until very recently, being similar to 2007, our most successful year.”

“However, we have more attorneys to do this work, and therefore, our results aren’t as strong as they were last year,” the memo from executive partner Robert Sheehan said….

Cravath presiding partner Evan Chesler, in contrast, wrote that “the economic downturn has severely affected our clients,” who “are under strong pressure to cut costs dramatically.”

Link.

Judge Sides With [Law Firm Name Deleted] in Bizarre Lawsuit

Erik Even — Fri, 12 Dec 2008 21:32:29 +0000

A judge in US District Court has sided with [Law Firm Name Deleted] in a bizarre and widely ridiculed trademark case against web site BlockShopper.com.

This image from the law firm’s web site has been replaced
with this photo of a monkey, to prevent litigation.

I would like to tell you the name of the of the law firm, but apparently Judge John W. Darrah of the Northern District of Illinois believes it’s possible that just mentioning [Law Firm Name Deleted] on your web site constitutes trademark infringement. (The name of the law firm rhymes with “Bones Flay.”)

BlockShopper applied to dismiss the frivolous case, but Darrah has denied the motion, and rejected the Electronic Frontier Foundation’s amicus brief.

Blockshopper lists the names, faces and jobs of new tennants of high-value properties in various cities, using only publicly available information. When the site mentioned the names and employer of two Ones-jay Ay-day associates, the firm decided to sue, under the fascinating theory that just linking to the law firm’s web site implied an affiliation with or sponsorship by the law firm.

And they’re spending actual money to pursue this. In an economic meltdown. On the other hand, they’re generating work!

Law Firms Avoid Announcing Layoffs, Even to Staff

Erik Even — Fri, 12 Dec 2008 19:50:22 +0000

From Am Law Daily:

The Am Law Daily is running out of leads for layoff stories, so we were relieved when we saw that Meredith Hobbs at the Fulton County Daily Report, an Am Law Daily sibling publication, got the managing partner of Seyfarth Shaw‘s Atlanta office to open up a bit about the recent layoffs there.

This statement from the partner, Paul Mattingly, especially caught our attention: “I’m not concerned about announcing layoffs publicly because these days they’re a fact of life.”

From the article:

Most firms still opt for “stealth” layoffs, preferring to cull lawyers and staff just a few at a time, in the hope that the cuts will escape the notice of the legal community — and, often, even people in their own firm.

They are loath to announce they are shedding associates and staff because business has slumped, fearing it will affect their ability to recruit and retain laterals…

Many firms also prefer to say cuts are performance-related because they worry about the stigma of admitting they don’t have enough work…

Seyfarth bucked the trend with last week’s e-mail memo explaining that it was laying off employees because of the economic downturn.

“Since layoffs have become so pervasive, clarifying that they were not for performance reasons, but because of market conditions, seemed like the fair thing to do,” said [Atlanta managing partner Paul] Mattingly.

Economic Meltdown Means Fewer New Partners in ’09

Erik Even — Fri, 12 Dec 2008 19:29:03 +0000

From Law.com: new partner candidates may have a tough time next year.

New partner announcements are starting to come in, and things aren’t looking so good. Thirteen Am Law 200 firms in California have announced new partners so far, and eight of those firmwide classes are smaller than last year.

“I anticipate a smaller class this year than last, and it’s a direct response to the decreased demand for legal services in the world,” said Keith Wetmore, chairman of Morrison & Foerster, which hasn’t yet announced its new partner class.

Chicago’s Mayer Brown and McDermott, Will & Emery named 43 and 42 new partners last year, respectively, but both named only 27 this year. Classes are also smaller at Cooley Godward Kronish; Fenwick & West; Gibson, Dunn & Crutcher; Proskauer Rose; Wilson Sonsini Goodrich & Rosati; and Weil, Gotshal & Manges.

“Onslaught of Bankruptcies” Means Steady Increase in Law Jobs

Erik Even — Fri, 12 Dec 2008 02:45:43 +0000

From the AE Feldman Blog:

Executive search firm, A.E. Feldman, says the surge in bankruptcies is creating opportunities for candidates with expertise in underwriting, restructuring, valuation and loan workouts. The firm says bankruptcy accountants are also in strong demand. Amid the onslaught of bankruptcies, law firms are also seeing a steady increase in need for legal services. As a result, A.E. Feldman says legal jobs are opening up for candidates with excellent academic credentials and a demonstrable track record as top firms bet that bankruptcy and restructuring work will be one of their most promising avenues of growth.

The post goes on to day that the current wave of bankruptcies is likely to be much more litigious, as creditors seek news ways to recover money. Reuters quotes Lisa Donahue, Co-Head of the Turnaround & Restructuring Practice at AlixPartners, as saying a big uptick in litigation over bankrupt companies’ collapses could continue for years.

Isn’t nice to know that the economic meltdown is good for someone?

The Upside of Being a Laid-Off Lawyer: Facial Hair

Erik Even — Fri, 12 Dec 2008 01:31:25 +0000

The Wall Street Journal, having nothing else to report on, writes that newly unemployed Wall Street refugees are luxuriating in the freedom to grow facial hair.

Facial hair is showing up on more former corporate types. It’s one of those tiny luxuries unleashed by unemployment, a time when people are briefly released from workaday habits and may wish to take stock of their lives before setting out anew. Al Gore grew a beard after losing the tumultuous presidential election of 2000. Neatly trimmed, it looked cozy and anti-establishment as he pursued creative projects on his way to the Nobel Peace Prize.

There’s even a Celebrity Beard Slideshow. Thanks, WSJ!

It’s a surprise to those of us on the Left Coast that Wall Street still bans facial hair. Also, what about the female laid-off lawyers and MBAs. Are they letting the leg stubble return?

Via ClayTravis.net.

ABA: Law Firms Working on Collapsed M&A Deals May Never Get Paid

Erik Even — Thu, 11 Dec 2008 22:11:14 +0000

The ABA Journal reports:

Law firms working on mergers and acquisitions typically get paid when and if a deal closes. That’s bad news for law firms working on deals that got delayed or fell apart in the economic downturn.

Mel Immergut … told the American Lawyer that some law firms will have to write off much of their deal work. The situation is particularly bad for firms working on stalled or collapsed mergers, private equity deals and corporate financings…

One lawyer [said] law firms will be reluctant to insist on strict payment terms since they will be competing for future work. “Law firms don’t have a lot of leverage here,” the lawyer said.

Do you work for a firm having problems getting paid for M&A work? Let us know: legalalerts@gmail.com.