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Cleary, Gottlieb, Steen & Hamilton has issued a memo to its associates stating that the firm will not respond to the slowing economy by laying off associates. The Cleary memo follows similar reassurances offered recently by Simpson Thacher & Bartlett and Davis Polk & Wardwell. Citing the firm’s history of weathering economic downturns, the Cleary memo, circulated within the firm last Tuesday and signed by Stephen H. Shalen, the partner who chairs the firm’s associates committee, stated that the firm would not consider “shrinking our community, either by laying off lawyers or withdrawing offers to job applicants.” In an atmosphere of growing job insecurity in light of law firm layoffs at major firms in New York and California, Cleary associates were happy to get the news. “It’s comforting to have that support,” said one third-year associate. “It shows the partnership is still following the same ideals that have been behind the firm since its inception.” The Cleary memo has been the most strongly worded disavowal of layoffs to date, but Simpson Thacher and Davis Polk have also reassured associates. Simpson Thacher chair Richard Beattie held a series of meetings with all associates at the beginning of October in which he offered general reassurances about the firm’s health. Though Mr. Beattie did not specifically address layoffs, an associate present said most associates understood the reassurances to apply to layoffs as well. Partner George Krouse confirmed that was the intent of the meetings. Davis Polk, in the same Oct. 5 memo in which it declared it would pay no year-end bonus, also declared that it would follow a historical policy of not laying off associates during economic slowdowns. The Cleary associate suggested such stances could put pressure on other firms to act similarly. “It sets the standard for the market,” he said. “Other firms will have to follow or bow out.” Associates at other law firms also expressed optimism that the Cleary memo may inspire other firms to adopt a similar tone. “It’s a good sign,” said a third-year associate at Debevoise & Plimpton. “Any associate would appreciate a memo like that.” But John Lindsey, a partner at Major, Hagen & Africa, the law firm consultant and placement firm, doubted these reassurances signaled a broader trend, pointing out that law firms still face tough economic times ahead. “Every firm has to make an individual decision, based on its own circumstances,” he said. But Mr. Lindsey praised firms that decided they could rule out layoffs. “It’s wonderful to reassure these people and let them get back to focusing on their work,” he said. Just last week, Shearman & Sterling and Pillsbury Winthrop laid off dozens of associates, citing economic reasons. One Shearman associate said the positions of Cleary, Simpson and Davis Polk suggested Shearman’s problem may not be universal. “If three other big firms were laying people off, that would be a lot more interesting to me,” he said.

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