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The year is young, but Dallas-based Jenkens & Gilchrist has already experienced its fair share of upheaval. Within the first few weeks of 2002, the firm gained a new leader and announced it will lose about 25 to 30 lawyers firmwide. The economic recession means less work for lawyers, and Jenkens is no exception. David M. Laney, who stepped down recently after 11 years as the firm’s chairman and president, says the departures will be spread throughout the year. The 607-lawyer firm’s new leader, William P. Durbin Jr. declines to disclose the number of layoffs in Texas, saying, “We consider the number to be private and are not disclosing that information to the public.” The layoffs primarily are in the transactional area, Durbin says. “We simply have more lawyers than we have work. Busy lawyers are happy lawyers.” The firm made a conscious decision not to include first-year associates in its layoffs, Durbin says. “The layoffs were scattered among all our associate classes excluding first-years,” he says. “There was no effort to concentrate on any particular classes. We excluded first-years from a fairness standpoint because the people who have just joined us haven’t yet had an opportunity to work for the firm.” Associates who have been laid off receive a standard severance package, Durbin says. He declines to disclose the financial details of that package. The firm does not plan to cut back on the numbers of 2002 summer clerks or first-year associates joining the firm in September, Durbin says. Durbin took over for Laney on Jan. 17. A six-member board of directors runs Jenkens. The president has only one vote among the six members so the position is by no means a monarchy, Durbin says. The president-chairman must be elected annually; it is the only board position without term limits. Other board members have a limit on the number of consecutive years they may be on the board. Each November, two to three board positions and the president-chairman slot come up for re-election. Laney says he had been considering not running for re-election for the last two or three years. He ran unopposed during his 11-year tenure. “When I realized [Durbin] was interested in the position and had started a campaign to run, I decided to step down,” Laney says. “If there had been a contested election, there could have been divisions that didn’t exist in my stead. I didn’t want that emergence. … I think it’s time for some new blood.” For Durbin’s part, he’s been involved in firm management since he became a shareholder in 1987, he says. He started out on the compensation committee, then moved to the electoral committee that oversees the board. Next, he moved into a position on the board until 2000, when term limits meant he could no longer sit on the board. Board positions are often contested, Durbin says. “That’s part of our culture. It provides a platform for debate about firm issues and a platform for change.” Durbin says the change in leadership was amicable. “There was no hostility in our firm, and there was no hostile takeover, but there was a change,” he says. Durbin says he decided to run for the president-chairman spot because he’s always been interested in the business and operational side of the firm. Challenges to leadership positions are part of the culture at Jenkens, and Durbin believes it was the right time for him to become the firm’s chairman. Change in any form is bound to upset someone, Laney says. “This is a superficial matter. … In this case, I think [any upset feelings are] fairly temporary.” SOME TREPIDATION But marketing directors at two other firms and two legal recruiters, all of whom request anonymity, say some Jenkens partners are nervous and have made queries about possibilities elsewhere. “I’ve had about four key partners testing the waters about leaving but, for now, they’re adopting a wait-and-see attitude,” says a Dallas recruiter. “Some section heads were about to hire new people but aren’t sure if the new regime will support that. I can’t say that people are miserable over there, but people are unsure.” Although Durbin says he believes change is often positive, there are no big surprises ahead. “We’ve been on the right course all these years under David [Laney],” he says. “The firm has grown steadily in business and in the number of lawyers. It’s pretty much going to be a steady hand on the wheel. … I don’t anticipate many changes at all.” Laney and Durbin agree that law firms lag behind other industries as an economic indicator. Due to work in progress, they are often one of the last industries to feel the effects of a recession. Hence, they are often the last to feel the effects of an upturn. Economic analysts predict the economic upswing will begin in the third quarter of 2002, meaning firms likely wouldn’t benefit until 2003, Durbin says. “We’ve been through worse recessions. These types of challenges create cohesion,” he says. For this year, Jenkens has reduced its yearly billable hours requirement for associates from 1,950 to 1,900, Durbin says. However, associates were advised that the billable hours requirement has been tentatively raised to 2,000 annual hours for next year; the board of directors will revisit that issue in December, he says. “The assumption is that the 2,000 hours will not be required [next year] if the economy has substantially improved.” But, no matter which way the economy moves or when, Laney says Jenkens is in good shape. “We’re now in enough geographic markets and enough of a variety of industries that I think we’ll be in good shape either way.” In addition to Dallas and New York, the firm has offices in Austin, Houston, San Antonio, Chicago, Los Angeles and Washington, D.C. With the layoffs out of the way, the firm is well-positioned to move forward, Durbin says. “The goals are to continue to grow and consolidate our existing offices in the near term,” he says. “We want to manage what we have in terms of our existing nine offices. We are very comfortable and think we are the right size firmwide right now. As we work through the recession, which we hope will end no later than the beginning of 2003, we think we are in the perfect position to ride the economy back up with our clients. In the meantime, we are constantly looking to add high-quality lawyers. We think the current state of the economy and the pressure on a number of law firms creates a great opportunity for well-positioned firms like ours.”

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