Legal News

You?re Fired! . . . Wait, No, Sorry, Just Move Practice Groups

By Dan Slater

It’s a law-firm management issue that’s gaining some serious traction: When a particular practice area — structured finance or real estate — is hit hard by an economic downturn, should managing partners simply wait for the work to come back, move people in those practice areas to different groups, or — gasp! — trim the fat?

Dechert recently became the latest firm to grapple publicly with the issue, meting out 13 layoff notices to associates in its finance and real estate practice, a source inside the firm told The Legal Intelligencer. But wait! Apparently, Dechert Chairman, Barton Winokur, then changed his mind, announcing that the firm would instead offer the 13 associates positions in other practice groups.

“Due to the major shift in market conditions affecting client demands in our finance and real estate practice area, we currently do not have sufficient work for all the associates in FRE,” Winokur said in a statement. “As a consequence, we have told 13 associates in the U.S. FRE group that we see no demand for them in that group in the foreseeable future. However, due to increased and substantial demand in other practice areas, we will be offering those lawyers the opportunity to work in those other groups.”

The announced layoffs reportedly comprise less than 10 percent of the 167 attorneys listed in Philly-based Dechert’s finance and real estate practice, which includes mortgage finance, structured finance and securitization, investment, and mergers and acquisitions.

The attorneys who were originally asked to leave were reportedly offered three months severance, six months of paid medical benefits and transition placement support. The possible departures come amid a record financial year for the firm with $836 million in gross revenue and more than $2.3 million in profits per equity partner.

Full post as published by Law Blog - WSJ.com on March 03, 2008 (boomark / email).