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In an iffy economy, and in the wake of recent layoffs at two major California law firm, many New York City associates have been asking nervously: Is it going to happen here? While there is much talk of law firms reassigning associates to other practice areas, and of some firms scaling back on hiring targets from previous years, so far no major layoffs in the city have surfaced. (Five associates in the information technology department at New York’s Brown Raysman Millstein Felder & Steiner have been laid off, but Peter Brown, the firm’s managing partner, said that two of the five could be assigned other work within the firm.) Yet several developments indicate that law firms are finding less drastic ways than widespread layoffs to reduce overhead while the economy remains a question mark. For instance, Loeb & Loeb, a bicoastal firm with about 200 lawyers, has abolished the summer associate program in its New York office. And consultants to the industry report that many mid-size law firms are not considering first-year corporate associates. Moreover, lateral hiring, which had boomed during the Internet economic bubble is currently “horrible,” and job prospects for third-year law students are “horrific,” according to the hiring partner of a major New York City firm, who requested anonymity. What is more, women associates whose firms in recent flush years had accommodated their family needs through part-time scheduling are worried about their futures. In the words of one such part-time associate, “We’re sitting ducks.” Everyone in the New York legal world, from the nail-biters to those who say they remain unaffected, has been talking about the recent layoff of 86 associates at Palo Alto, Calif.’s Cooley Godward in the wake of a collapsing high-tech economy. And Thursday, Silicon Valley’s Fenwick & West become the second firm to drop the layoff bomb, cutting 32 associates — roughly 14 percent. Many wonder whether the subtle signs of disturbance in New York law firm hiring presage a return to the early 1990s, a period of widespread associate layoffs. While the numbers do not yet reveal a sea change in the hiring climate, a change in attitude can be detected. Echoing others, the major firm hiring partner advised young lawyers: “Get out of the sellers’ market mentality and understand the [poor economic] terrain.” He added, “I think there’s more to come.” Jane Gowen, executive vice president of Update Legal, a temporary lawyer agency, said that solid performance will usually protect associates anxious about their jobs. “If you’re working your tail off until 3 a.m., that goes a long way,” said Gowen. “It always comes back to the individual. Firms really want to see loyalty and hard work.” “Nobody’s talking salary size anymore,” said the self-described “sitting duck,” who finds such Darwinian advice frightening. “Now it’s just a salary.” In fact, part-time and temporary workers have been beefed up over the past 10 years to provide a personnel “cushion,” according to the anonymous hiring partner. And it is the temp lawyers hired for document review and project work, along with the part-timers, who could face the ax before full-time associates do, he said. Hiring figures at Strategic Legal Resources bear this out. According to Jay B. Horowitz, chief executive officer of Strategic, the agency billed $3.9 million in temp services in fiscal 1996, rising to $24.1 million last year. The run rate between November 2000 and March 2001 shows a current annual billing drop to $18 million. “People pull back on their variable costs first,” said Horowitz. “There’s more of a buffer now.” At least some of that buffer has come about at the insistence of clients, according to Lynda F. Wertheim, director of legal assistants at White & Case. According to Gowen of Update, a temp lawyer could be hired for as low as $40 an hour, compared with $150 to $200 that an associate’s time would command. “Only in rare cases would we replace massive amounts of attorneys,” said Joshua Schott, president of Update. ASSOCIATES SEEKING ADVICE Nevertheless, the newly established Internet firm Legal Writing Success reports a surge of business from junior associates in New York who pony up $100 per hour for advice on their stock in trade — productive writing that pleases the boss and the client. “Associates who contact us haven’t indicated that they’re doing something on the sly,” said Robert M. Unterberger, president of Legal Writing. “What they have uniformly said is that they need help, and that they aren’t receiving considerate, thoughtful direction from those giving them assignments.” Unterberger said he has counseled associates from the New York firms Wilson, Elser, Moskowitz, Edelman & Dicker; Cleary, Gottlieb, Steen & Hamilton; Kaye Scholer; Kelley Drye & Warren; Dewey Ballantine; Mendes & Mount; Paul, Weiss, Rifkind, Wharton & Garrison; Morgan, Lewis & Bockius; and Hughes Hubbard & Reed. “The best thing I could tell a young lawyer now is to be flexible,” said Update’s Schott. “You just have to be open to learning, and you have to be prepared.” PLACEMENT OFFICE Law school placement officers are still awaiting results of the interview process for this year’s crop of summer associate candidates. A sampling of campus placement offices showed no apparent downturn in interview schedules at Columbia Law School, New York University School of Law, Brooklyn Law School, Benjamin N. Cardozo School of Law or New York Law School. “But we’re seeing some subtle changes,” said Jacqueline J. Burt, assistant dean of the Center for Professional Development at Cardozo law. “We’re seeing firms who came in for two days, and now they’re saying, ‘Oh, Jackie, we’re only doing one day.’ “And then, as I was talking with an employer, I asked about the firm’s [long-standing] casual dress code,” she added. “Without batting an eye, the woman recruiting from this firm said, ‘Like many other things adopted in the wake of the dot-com failures, that, too, is going by the wayside.’ “ Loeb & Loeb’s decision to drop its New York summer associates program was a public, albeit quiet one. The firm made courtesy announcements to law school campuses. Off-campus applicants were sent a form letter that stated, in part: “In reviewing our client base and the matters that we are handling, we have come to the conclusion that in order to provide the level of sophistication and complexity required to service these clients … . We have re-examined our hiring efforts, and, in so doing, have determined to suspend the New York summer associate program for the foreseeable future.” Betty Ann Tursi, director of marketing at Loeb & Loeb, said the firm’s decision was not an economic one. She said the New York program had averaged four students per year. William G. Johnston, a director of the consulting firm Hildebrandt International, said a midsize New York firm had made it clear that corporate law first-years would not be hired. For reasons of client confidentiality, he would not name the firm. “I think they were rather late to the game,” said Johnston. As for the possibility of junior associate cutbacks, he expected New York would follow a lead set by firms in other cities. “They’ve been eliminating through what they call ‘performance issues.’ I don’t know if that’s a way of eliminating under-productive lawyers, or doing a back-handed layoff.” STILL PARTLY SUNNY Despite the dark cloud talk, some firms report sunny skies. “What happened at Cooley is sad and unfortunate,” said Alan S. Jaffe, chairman of Proskauer Rose, which he said had a broad-based, counter-cyclical practice. “We’ve just completed our summer program, which was very successful. We made offers to all of them.” A spokesman for the firm Stroock & Stroock & Lavan said the firm’s hiring practices remained unchanged. White & Case and Schulte, Roth & Zabel also report that their firms had made no hiring changes. And in a move to reassure its associates, Schulte Roth announced Thursday that it would guarantee year-end bonuses of $30,000 to a maximum of $80,000. Likewise, opinions on job security among a sampling of associates varied from confidant to terror-stricken. “I’ve never been busier,” said a male associate of his corporate job at a large midtown firm. “But I’ve heard a lot from my colleagues at other firms about delayed bonuses, under the guise of some sort of ‘recalculating the methodology’ and that sort of lawyerspeak.” As one female associate who fears cutbacks said: “Lawyers are rarely fired. We’re good at calling it something else, something gentlemanly.”

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