These days, news of possible lawyer layoffs moves faster than New York office workers trying to get to the beach on a summer Friday.
The cloistered New York legal world was abuzz on Monday thanks to a story in British legal newspaper The Lawyer, which reported that 745-lawyer Simpson Thacher & Bartlett -- an old-line New York firm with $966 million in revenue and profits per partner of nearly $3 million last year -- was clandestinely trimming its associate ranks by roughly 30 lawyers through midyear performance reviews.
The story solicited a stern response from Simpson Chairman Philip "Pete" Ruegger III.
"This is something that was made up by that rag in the U.K., it's just complete nonsense," Ruegger says. "We aren't doing anything differently than any other year and we actually have less attrition this year than last year."
Ruegger's rhetoric was seconded by several New York-area recruiters, who say they have yet to see a spate of Simpson resumes from lawyers looking for new jobs.
Alisa Levin, a co-founder of legal search firm Greene-Levin-Snyder, says, "We constantly talk to associates [at Simpson] and we would have heard of something by now."
Another principal at a large national recruiting firm who requested and received anonymity thinks that an economy that continues to reach new lows is responsible for all the scuttlebutt.
"I've heard the same [Simpson] rumors but I haven't seen anything definitive," the recruiter says, adding that current market conditions are unlike any other she's experienced before. "[So many practice groups] right now are quiet and we don't have a bankruptcy upswing like we did with the last downturn," she says. "Right now we just have to wait and see how this is going to pan out."
While Ruegger declined to comment about Simpson's practice areas, The American Lawyer reported in its April issue that activity in the firm's enormously successful private equity group had cooled. (Several Simpson partners, including recruiting co-chairs Kenneth Ziman and Lynn Neuner, did not respond to requests for comment.)
One former midlevel Simpson associate contacted by The Am Law Daily did corroborate the layoffs report. "I don't know how widespread it is but since the end of 2007 and the beginning of this year, [Simpson] began concentrating on these performance reviews," says the ex-Simpson associate, now with a rival Am Law 100 firm. "I do know it's still happening across the board and they're focusing more on the midlevels than otherwise would be the case because they're the easiest to get rid of."
The former associate says midlevels are essentially told during performance reviews that they should seek employment elsewhere. "They'll say, 'I don't think you have a future here so maybe you should have a look around in the market,'" says the Simpson alum, adding, in reference to the recent news that another large firm was cutting close to 100 lawyers, "It's very sneaky and sort of [the opposite] of what Cadwalader did with its layoffs."
But a senior associate in one of Simpson's non-New York offices -- all associates contacted for this story requested and received anonymity -- says that he's seen nothing outside New York to indicate the firm is culling its associate ranks.
"I'm 100 percent certain that no one has been laid off in my office in the past five years, and I would be shocked if [layoffs] were the case because I haven't heard anything to that effect," the associate says. "But there are 600 lawyers in [the New York] office so who knows how these things get started."
When it comes to job cuts, it seems, layoffs are in the eye of the beholder.