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Employment lawyers across the San Francisco Bay Area are in awe of the ferocity of the economic slide, which for many has already translated into more work.
Many Bay Area partners at firms big and small say their employment work really surged in the fourth quarter of 2008. And pretty much all of those interviewed by The Recorder said they expect more of the same this year.
Billings at Littler Mendelson's 24-lawyer San Jose, Calif., office were up 20 percent in November and 23 percent in December over the same months in 2007, according to Dennis Brown, managing partner of that office. That was slightly larger than the increase firmwide, he added. "All of a sudden, we really exploded in the latter part of the year," Brown said.
While no one's surprised by the effect the economy has had on employment lawyers, many, including Brown, said the depth and breadth of the downturn makes it stand out from previous ones.
Compared with the dot-com bust, which was largely limited to technology companies, this downturn is affecting almost all business sectors, Brown said. "I haven't seen anything in scope affecting so many industries as what I'm seeing now."
Nixon Peabody's national employment practice head, Jeffrey Tanenbaum, said that he saw the downturn impact other regions of the country before it stormed into California.
In past downturns, he said, he's noticed a period of about six months to a year of increased layoffs. But this time seems different: "We've already seen that for a year, and there's no sign of its abating. In fact, there's an increase."
In addition to layoffs and workforce restructurings, employers are asking about reductions in compensation and work schedules, pay freezes, job sharing and telecommuting.
He said the billings coming in as a direct result of the downturn are significant, but it's hard to quantify, "because what we're also seeing is a decrease in some of the discretionary work that companies engage in in good times," such as training sessions and revising of employee handbooks.
Another cause of the increase in work is a flood of new laws and regulations expected to pass under the new administration. Clients are of course paying attention to the Employee Free Choice Act, which is expected to increase union organizing, but there are also possibilities related to paid leave and other laws.
Roberta Hayashi, leader of Berliner Cohen's employment group, said that companies' dismal third-quarter results set her phone off on the first Monday in October. Three different employers called her on the same day. By the end of the week, she was working with four companies on worker reductions.
What followed was a "very quick upsurge in advice and counsel work on layoffs," she said.
Hayashi is now in discussions with partners at the 54-lawyer firm about hiring help. In the last few months, she has had to pull two associates from the real estate group and one from the corporate group to help the four-lawyer team handle an upswing in counseling and litigation.
"We're starting to see filings of lawsuits from people who were let go in the middle part of last year and have not found other employment or comparable employment," she said.
G. Daniel Newland, co-chair of Seyfarth Shaw's labor and employment group in San Francisco, said that compared with the last downturn, clients are seeking advice on more than trimming the fat. They are cutting into meat.
Newland is representing a stock brokerage where the workers on the chopping block are quality employees or "keepers" that have been well regarded and even may have been promoted in the last 12 to 30 months. But the company can't afford them anymore.
During the dot-com bubble and burst, companies experienced a meteoric rise only to fall just as quickly.
"I helped some dot-coms go from peak to zero," he said. "Here we're dealing with established, long-term companies and people who have had careers at these places."
It's been affecting golf courses, stock brokerages, law firms and upscale properties in the hospitality business.
"I'm not getting any sense from owners of businesses that 2009 is going to be better than 2008, or that this is going to be a temporary seasonal change," Newland said. "These are jobs that are being eliminated as opposed to deferred."
Judith Keyes, a partner in the San Francisco office of Davis Wright Tremaine, said that her group is equally as busy as it was a year ago, but the focus of the work has shifted away from executive employment agreements and stock option plans, and concerns about trade secrets when an employee has decamped to another company. Now Keyes is helping clients in the entertainment industry -- such as Bay Area animation companies -- figure out how to hold on to highly-skilled employees they can no longer afford but that they still want, while they wait for the next production contract to come along.
"What we are called upon to do is advise them on how to cut back most legally and least painfully," she said.
Sheppard, Mullin, Richter & Hampton's Jennifer Redmond, who represents many tech and biotech clients, said that she has to figure out how to work with many companies that are small, young and struggling in the crunch.
"A big question for biotech companies is: Are they going to exist?" she said. "You are seeing some of the smaller companies disappearing."
Redmond, partner-in-charge of the labor and employment practice in San Francisco, said she didn't have year-to-year billing comparisons available, but the group continues to be busy and new clients are seeking her out.
"I'm getting a lot more referrals coming in from companies I've never heard of before" -- a change from the boom time, she said. She believes many clients in the Valley are done with round one of layoffs, she added, "and maybe are getting ready for round two."
