pageok
pageok
pageok
It's David Lat's World, and BigLaw Partners Are Just Living In It:
Remember the old days when law firms worried about getting sued if they fired an attorney? These days, I would think the greater fear is that the firing will get ugly and end up featured on Above the Law.
tarheel:
This just a few weeks after Sonnenschein in Charlotte took a brutal PR beating on ATL for rescinding offers to summer associates and incoming 1st-years (some of whom had already bought homes in Charlotte).

Credit to the Paul Hastings associate for having the integrity not to sign the agreement, but I wish these firms luck enforcing a non-disclosure agreement with the likes of Lat out there.
5.5.2008 9:54pm
Jim at FSU (mail):
3 months severance pay and access to company voicemail and email? Cry me a river.
5.5.2008 10:01pm
Jim at FSU (mail):
I only took a semester of employment law so maybe someone smart could enlighten me as to what the big deal is here?

Is the big scandal that they terminated her because she had a habit of getting pregnant and then asked her to waive her claims in return for 3 months severance?

I've known plenty of women whose positions became extraneous while they were on maternity leave. The shocking thing in my eyes is that they gave her three months salary. Talk about a Santa Claus HR department. I've only heard of people getting more than 2 weeks when they negotiated for a severance package upon joining the company.
5.5.2008 10:11pm
LM (mail):
They were obviously trying to buy something with that. It's a good bet they wouldn't offer the same terms today.
5.5.2008 10:12pm
Ben P (mail):

3 months severance pay and access to company voicemail and email? Cry me a river.


Uh, she didn't get it because she didn't sign the non-disclosure/non-disparagement agreement.
5.5.2008 10:13pm
Bill Poser (mail) (www):
What seemed to me to be gratuitously nasty was the clause in the agreement that forbade the associate from applying to the firm in the future (as if she'd want to) unless personally invited to do so. That makes it sound like a firing for cause rather than the resignation that the agreement insists it was.
5.5.2008 10:14pm
tvk:
It's a good bet they wouldn't offer the same terms today.

There is a non-negligible chance that Paul Hastings is willing to double, triple, or quintuple those terms right now if it would stop further bleeding.
5.5.2008 10:15pm
GV:
It's not just an issue of whether the firing was illegal. It sounds like it probably wasn't (although who knows). The most pertient issue to a lot of people is the way in which the firing was handled. It's extremely poor taste to fire someone a mere six days after they have a miscarriage. It's also extremely poor taste to make a person think they're doing a good job, only to fire them and claim it's because they're doing a bad job.

There's nothing illegal about handling a firing in poor taste. But just because something isn't illegal doesn't mean it's the right thing to do and it certainly doesn't mean it's the right business decision. When you fire someone in the fashion Paul Hastings allegedly has, you're going to have a harder time convincing people to work at your firm.
5.5.2008 10:21pm
LM (mail):
Who knows how they fired her or what she was told in prior or recent reviews? Or how compassionately or sympathetically she was treated. We only know her side. But I'd say that for prudential reasons alone, I'd hesitate to fire anyone six days after a miscarriage.
5.5.2008 10:27pm
Ben P (mail):

The most pertient issue to a lot of people is the way in which the firing was handled.


It's also somewhat relevant that many (but not all) BigLaw firms maintain that layoffs are "not part of their firm culture."

So they apparently go to some lengths to demonstrate that anyone let go is let go for "cause."

If this had happened in a big corporation (minus the potential discrimination issue, which might still be big) it would only be an example of a bad boss and might be the subject of rumors about said person.

If this happened on Wall Street it would be par for the course. (Certain financial firms are notorious for their bad firing practices: "Oh, you say your key card didn't work today?....")
5.5.2008 10:29pm
tarheel:
Exactly, GV. This and other similar stories on ATL may or may not be legal issues, but they are certainly massive PR issues for the firms. When they treat people like crap, they are getting called out for it on a national scale.

Doubtful firms will change their behavior, but at least it may drive up the price of a non-disclosure agreement.
5.5.2008 10:32pm
Biglaw Equity Partner (mail):
What strikes me as most surprising here is that PH has such a great reputation for employment law services, and this seems like a huge, blatant employment faux pas.

I'll be interested to see PH's side of the story. I would not be surprised if they have a defensible role here. If not, I would not be surprised if their reputation (and demand) suffer.
5.5.2008 10:40pm
Jim at FSU (mail):
Ah ok, now I get it.

Not really surprised that PH is burning through employees if this is how they treat them. I guess the stunning thing is that they have these practices in place and don't understand why they have problems retaining employees. This sort of stuff was obvious to me within 3 months of my first crappy job out of college.

I still don't understand the benefit of saying that "layoffs aren't part of our firm's culture." That seems like a stupid limit to place upon your business. Although I guess it is somewhat bad to admit that business is contracting, not having layoffs when you are overstaffed is incredibly wasteful. And layoffs are certainly less painful than firing people for contrived reasons.
5.5.2008 10:56pm
overlord:
Bill Poser wrote:What seemed to me to be gratuitously nasty was the clause in the agreement that forbade the associate from applying to the firm in the future (as if she'd want to) unless personally invited to do so. That makes it sound like a firing for cause rather than the resignation that the agreement insists it was.

I wondered about the purpose of that clause too- perhaps it is intended to prevent someone they've laid off/fired from later claiming they had promised or implied they would re-hire her when business picked up. That may be a better explanation than gratuitous nastiness.

Jim at FSU wrote: Although I guess it is somewhat bad to admit that business is contracting, not having layoffs when you are overstaffed is incredibly wasteful. And layoffs are certainly less painful than firing people for contrived reasons.
--yes. Law firms are notorious for bad management in certain respects. Communication with junior attorneys is a recurring problem in firms across the country. I've seen it over and over. Perhaps everyone seeks comfort in their own narrative: associates whose careers suffer a setback are convinced the firm scapegoated them, partners who had to let someone go somehow convince themselves the associate wasn't meeting their expectations, however poorly communicated. The young associates are terrified of being cast out onto a job market where they have few connections, only their newly tarnished credentials; the partners are scared of being seen as weak or fading by clients and competitors, and of losing their book in early middle age.

I can't tell just from reading her e-mail who was "right" in this situation. All I can say is that if the most difficult part of your law practice is reading cases, writing, and making substantive arguments or providing substantive advice, you are VERY rare and VERY lucky. Private practice is a brutal business, it is not always fair and it is never easy.
5.5.2008 11:19pm
NYU 3L:
Jim--

No law firm likes to talk about layoffs, because it's a competitive disadvantage, and usually unnecessary--attrition is so high in most law firms that you don't need artificial firings to cut deadwood. The summers at my firm last year were grilling them about the "layoff" they had done in the previous year, which occurred because our firm doesn't have the high attrition rates of most BigLaw firms. And if a firm is laying off associates, it's (probably rightly) viewed as a sign that the firm is a sinking ship that new associates shouldn't want to join.
5.5.2008 11:22pm
Ben P (mail):

I guess the stunning thing is that they have these practices in place and don't understand why they have problems retaining employees. This sort of stuff was obvious to me within 3 months of my first crappy job out of college.


NYU 3L already mentioned this, but a lot of these firms already put new associates through the grinder and shed the majority of them within a few years. They eventually tire of the 80 billable hour weeks and go to work at a slightly smaller firm where they actually stand a chance of making partner.

I suppose when you're already running that type of work environment it doesn't always register when it's *really* bad.
5.5.2008 11:32pm
Bill Poser (mail) (www):
Overlord:

wondered about the purpose of that clause too- perhaps it is intended to prevent someone they've laid off/fired from later claiming they had promised or implied they would re-hire her when business picked up. That may be a better explanation than gratuitous nastiness.

But, for this purpose wouldn't it be sufficient to have just the first part of that clause, in which the associate acknowledges that the firm has not promised to rehire her? I don't see that the firm gains anything by forbidding her ever to apply again.
5.6.2008 12:02am
Le Messurier (mail):
Behavior such as PH's certainly makes academia a great deal more attractive as a career choice.
5.6.2008 12:03am
GV:

Law firms are notorious for bad management in certain respects.

That looks better.

Law firms should not be run by lawyers. They should be run by people who know how to run a business. The skills it takes to be a good lawyer are often antithetical to the skills it takes to be a good manager of people.

NYU 3L, I think one aspect of this that you are missing is that this woman was a (very, very) senior associate. I think she was a 9th or 10th year. Most big law firms have high attrition rates, but that's because lots of junior and mid-level, but not senior, associates choose to leave. A senior associate will typically leave only if they're told that they're not making partner. Many firms allow people in that situation to stay at the firm for only a limited amount of time longer. I don't think it's that unusual for a law firm to "fire" a senior associate in this sense, and I don't think the relevant market players necessarily view that as a black mark on the firm. On the other hand, handling such a firing in a really bad way can leave a black mark on the firm. (For example, if the senior associate was led to believe that they're going to make partner and then all of a sudden they don't.) In this PH case, I don't think there would have been any outcry if her e-mail revealed that they told her a couple of months or so after her miscarriage that even though she had been doing well at the firm, given the current market and their partnership needs, they didn't expect her to make partner so she had six months to find a new job.
5.6.2008 12:04am
dharma (mail):
I think it's pretty obvious that she does not have a claim against Paul Hastings (unless it's gender discrimination based on being fired for getting pregnant, but she'll have a very hard battle since they have negative progress reports on her and they will probably lay off others in bulk due to the economy).

However, I think the point here is the way she was layed off: for cause (or so it seemed from her letter). Sometimes, it's just best to be honest and say, "look, the economy's in a slump, and we need to cut costs. I am sorry. We'll help you to find a new job any way we can."

Paul Hastings has made it clear that they won't comment, but I would love to hear their side of the story.
5.6.2008 12:40am
stunned:
GV: where are you getting that she was a 9th or 10th year? (not disputing, just curious)
5.6.2008 1:03am
GV:
Like a lot of people, I've been forwarded the original e-mail (without the person's name redacted) about 12 times. With some simple googling, you can figure out when she graduated law school.
5.6.2008 1:27am
Jim at FSU (mail):

Law firms are notorious for bad management in certain respects. Communication with junior attorneys is a recurring problem in firms across the country. I've seen it over and over. Perhaps everyone seeks comfort in their own narrative: associates whose careers suffer a setback are convinced the firm scapegoated them, partners who had to let someone go somehow convince themselves the associate wasn't meeting their expectations, however poorly communicated. The young associates are terrified of being cast out onto a job market where they have few connections, only their newly tarnished credentials; the partners are scared of being seen as weak or fading by clients and competitors, and of losing their book in early middle age.


Law firms should not be run by lawyers. They should be run by people who know how to run a business. The skills it takes to be a good lawyer are often antithetical to the skills it takes to be a good manager of people.



This sounds like an amateurish way of running a company. Is such behavior really common in the legal world or just at certain types of firms?

And regardless of how common it is, why are things done this way? Do lawyers think that because they're smart in one area they don't have to delegate running the business to someone who knows how? How common is this attitude amongst partners?

How common is good business sense amongst partners? Do their strengths tend towards sales and other rainmaking type abilities or towards good management skills in the traditional sense?

I ask because I will be entering this job market soon.
5.6.2008 2:24am
Jim at FSU (mail):
Also, do ethical rules about how law firms can be structured have any effect on effective management of law firms as businesses? Would it be beneficial for law firms to abandon the partner concept and have regular president/ceo/cto/VPs for each department? Would this lessen problems with political gamesmanship within the company?
5.6.2008 2:26am
Jim at FSU (mail):
er CFO, not CTO
5.6.2008 2:27am
NYU 3L:
GV--

I didn't miss it, I was just responding to Jim's individual point.

It also depends on whether PH has an "up-and-out" policy that expects her to leave upon not making partner, or allows associates to stick around after not making partner if they can keep on finding work. My firm doesn't have an "up-and-out" policy, and there are some 12th and 13th year associates around. The lay-offs we had were partially because the firm ordinarily isn't as aggressive about clearing deadwood as the average BigLaw firm--and were mostly of mid and senior associates, if I remember correctly.
5.6.2008 2:48am
Matt C.:
Lawyers should be professionals, not businessmen. They should be in it for justice and doing a good job first, not to turn a profit. BigLaw is already turning more into business corporations than a collection of professionals. Having an actual non-lawyer administrative structure for law firms might make law firms run better, but it also be essentially giving up the fight on what being a lawyer truly should be.
5.6.2008 3:32am
swg:

Lawyers should be professionals, not businessmen. They should be in it for justice and doing a good job first, not to turn a profit.

A lot of the time, the two aren't exclusive. If PH thinks their profits could suffer a bit from this, they'll be more humane the next time, and in that way the pursuit of profit alone will guide their conduct towards what's more respectable.
5.6.2008 4:36am
PubliusJenkins (mail):
This article was written by partner at Paul Hastings

"Ten Steps of Communicating the Layoff Decision," The California Labor Letter, Aug. 1995, at 6

Haven't read the article, but one wonders if PH missed a step somewhere.
5.6.2008 5:29am
Ben P (mail):

Also, do ethical rules about how law firms can be structured have any effect on effective management of law firms as businesses? Would it be beneficial for law firms to abandon the partner concept and have regular president/ceo/cto/VPs for each department? Would this lessen problems with political gamesmanship within the company?



From my understanding the big issue with that is the fee sharing problem.

A law firm could potentially be managed by a CEO, but that CEO couldn't share in fees or be an owner of the business. (but apparently he could be compensated as part of a general profit sharing plan.)
5.6.2008 9:58am
Jim at FSU (mail):

Lawyers should be professionals, not businessmen. They should be in it for justice and doing a good job first, not to turn a profit. BigLaw is already turning more into business corporations than a collection of professionals. Having an actual non-lawyer administrative structure for law firms might make law firms run better, but it also be essentially giving up the fight on what being a lawyer truly should be.

Which is all the more reason for such noble individuals to not have any control over the company finances. There needs to be someone watching profitability or deadwood quickly piles up. Informal measures of work quality are not a substitute for knowing where your cashflow is coming from and going to.

I've been in companies that engaged in checkbook accounting and the result is always inefficiency and poor decision making. Instead of being driven by financial realities, decisions are driven by company politics and often mistaken notions of who is contributing the most. Politically influential but money-losing areas of the company go on forever without reform while profitable areas are neglected. A lot of this stuff sounds easy to spot but it isn't.

Admittedly it is easier to measure performance based on billable hours because it is a fairly simple business model, but being a good lawyer is more than the number of hours you bill to a client. I've seen similar problems in programming and IT consulting where good programmers that could finish a task quickly were valued less than programmers that could justify billing thousands of hours to a project. This had a pernicious effect because the talented employees didn't feel they had to tolerate this and left. The "fix" to this brain drain is to hire expensive experts to oversee the seat-warmers that get left behind when everyone good leaves. The final whammy comes when the client figures out what is going on and realizes it is cheaper to just hire your expert on a permanent basis and let you keep the seat-warmers.
5.6.2008 10:49am
Aultimer:

Biglaw Equity Partner

What strikes me as most surprising here is that PH has such a great reputation for employment law services, and this seems like a huge, blatant employment faux pas.


Not surprising at all.
1. The cobbler's children have no shoes.
2. The median law firm partner is a terrible manager.
5.6.2008 11:25am
Houston Lawyer:
I have never seen a firm acknowledge that they are laying off associates because they don't have sufficient work. My experience has been that layoffs are primarily about the economics. In addition, you always keep your best associates. So, this associate was probably doing OK work and was getting good reviews, but wasn't performing as well as some of her peers.

Still, even when you are going to fire someone, you should treat her like a human being.
5.6.2008 11:58am
ejo:
while it may be difficult, if you had sterling performance reviews pre-pregnancy and the poor ones started flowing just before termination, you have just set yourself up for a lawsuit. it's kind of why honesty is still the best policy.
5.6.2008 11:58am
Thales (mail) (www):
I don't think anyone thinks the associate has a terribly strong legal claim, but I defer to employment law experts. I think what is shocking to most, even those who work in BigLaw, is simply the disrespect and lack of candid communication, as well as blatant face-saving if in fact there were no clear performance problems and PH is just concealing its own financial troubles by claiming the firing was performance-related. As others have alluded to, candor (there's simply no room for you, you came up for partner at a bad time) and taste (just had a miscarriage? Here's some more bad news) are what appear to be lacking. It's brave of the associate not to have taken the hush money, which the agreement Lat posted appears to amount to.

As others have said, it would be interesting to hear the firm's side of the story. I doubt that we will.
5.6.2008 12:24pm
Dan Weber (www):
And regardless of how common it is, why are things done this way? Do lawyers think that because they're smart in one area they don't have to delegate running the business to someone who knows how? How common is this attitude amongst partners?

It's not that different in the software world.

Having raw smarts and determination and hard work isn't always enough to get the job done. You might just have the wrong personality for management and running a business.

The smartest people are always those who flare out the brightest when everything hits the fan. (Dumb people can't keep things going long enough for the problem to become huge.)

I was pondering a jump from software and security to law a few years ago, especially in the wake of all the talk of outsourcing there was (which was over-emphasized), but I'm much less inclined to try the law field these days.
5.6.2008 12:45pm
affe (mail):
As someone who's been through a similar wringer a few years back (biglaw lateral, great reviews for two years, work dries up for months, pretend-bad-review and pretend-non-layoff, along with several others), anyone going into a big firm needs to realize that, up to the moment they become partner, they're fungible and expendable. Plan to be treated that way, and treat your employer similarlyy. Sock away your cash, network your ass off, don't take your reviews too seriously unless they provide specific, detailed feedback (I think I've had one in a 10-year career so far that did). Much disappointment then goes away.
5.6.2008 12:50pm
A.S.:
anyone going into a big firm needs to realize that, up to the moment they become partner, they're fungible and expendable

Strike the "up to the moment they become partner". Partners are just as expendable as anyone else.
5.6.2008 1:24pm
EKGlen (mail):

I have never seen a firm acknowledge that they are laying off associates because they don't have sufficient work.

Unfortunately I do not recall the name of the firm, but a few months ago a firm did just that and went out of its way to praise the competence and abilities of the attorneys and noted that the sole reason for the layoffs was the contraction in business.

But, you're right and the only reason I remember that is that it is so rare.
5.6.2008 1:25pm
M.:
I could be wrong, but I seem to remember from law school that under state law a non-lawyer cannot own a law firm or make decisions affecting the representation of clients. And that is why firms are run by lawyers.
5.6.2008 1:36pm
billb:
M: I'm pretty sure it's the Rules of Professional Responsibility that put these limitations on business people managing law firms. See, for example, the Model Rules section 5.4. Presumably the details vary from state to state.
5.6.2008 1:50pm
Jim at FSU (mail):
That's what I was remembering too.
5.6.2008 1:52pm
Happyshooter:
I could be wrong, but I seem to remember from law school that under state law a non-lawyer cannot own a law firm or make decisions affecting the representation of clients. And that is why firms are run by lawyers.

It is even worse than that here. Accountants can draft contracts and set up corps, and accountaing firms can hire lawyers as employees, but the lawyers can never become partners in the firm.

The bar is going out of its way to skunk business lawyers. I am almost sure I am going to end up an employee of a big accounting firm one of these days.
5.6.2008 2:45pm
Bruce:
Is the big scandal that they terminated her because she had a habit of getting pregnant . . . ?

Classy.
5.6.2008 2:51pm
Thales (mail) (www):
"Is the big scandal that they terminated her because she had a habit of getting pregnant . . . ?

Classy."

Yeah, my thoughts exactly. There are a number of sexist comments like this on the Above the Law thread too. This kind of crap is really socially inexcusable in the 21st century, and regardless of the law, if that was the rationale for the firing, the firm deserves all the bad press and shunning by prospective female hires it will get.
5.6.2008 2:58pm
D. Lat Fan (mail) (www):
Fact: H. Rodgin Cohen wears David Lat pajamas.
Fact: Before he goes to bed Jim Sandman checks his closet for Kashmir Hill.


Fact: Fear is not the only emotion David Lat can smell. He can also detect hope, as in "I hope I don't get profiled on Above The Law by David Lat."


Fact: A study showed the leading causes of death among partners in the AmLaw 100 are: 1. Heart disease, 2. David Lat, 3. Cancer.
5.6.2008 4:05pm
Bruce Hayden (mail) (www):
Someone above suggested that law firms don't cite economics for letting people go even when that is the case. But I was let go from a 20 attorney IP firm during the .com bust just that way. They had just gotten notice of losing a second client in my area, and I was shown that email.

The result was that I got a decent severance, got the ability to say I got laid off for business reasons, and still have warm feelings for the firm for having done it right.
5.6.2008 4:22pm
Jim at FSU (mail):

"Is the big scandal that they terminated her because she had a habit of getting pregnant . . . ?

Classy."

Yeah, my thoughts exactly. There are a number of sexist comments like this on the Above the Law thread too. This kind of crap is really socially inexcusable in the 21st century, and regardless of the law, if that was the rationale for the firing, the firm deserves all the bad press and shunning by prospective female hires it will get.

What's so sexist about acknowledging that she may have been fired because she got pregnant? Most women don't go around constantly pregnant so even an employer who is hostile to pregnant women might have female employees of child bearing age. The miscarriage established the likelihood that she would become pregnant in the future, thus triggering the discriminatory behavior.

Pointing out the possibility of sexually discriminatory motive isn't the same as condoning it. I don't condone discrimination against women that become pregnant. I didn't say I approved, simply spelling out the case for discriminatory motive. That being said, I understand why this sort of anti-pregnancy termination happens and I think you guys have an unrealistic view of how effective anti-discrimination laws are at preventing it.

There is plenty of discrimination against women who get pregnant (especially at high pressure jobs). Most of the time there is no legal recourse because the employer knows the legal landscape and performs the termination in such a way that it precludes a successful lawsuit. The difference with this case is that most women in that situation don't get comfy settlement offers in return for not badmouthing the company.

That was my main point.
5.6.2008 4:43pm
LM (mail):
Firms generally understand the cost of being perceived as dishonest by their associates, and many have procedures designed to enforce candor in work reviews. But that kind of honesty also conflicts with their near-term economic self-interest, since senior associates are among the most profitable lawyers in the firm. The art lies in finding a balance between candor and not chasing profit centers out the door.

Those competing pressures, as well as all the human, non-economic considerations, get plenty of airing in partnership discussions. But there's another pressure on candor that may tend more to get swept under the rug. It's the reluctance, at least subliminally, of reviewers, who are typically partners within the work group, to enlarge their own work-load by cutting loose productive co-workers.

There's of course a gauntlet of other factors conspiring to make misery for partner aspirants (e.g., feudal warring among work groups), but imperfect candor seems to be the most persistent, despite longstanding, serious efforts to root it out. It's also the one that understandably really seems to rankle.
5.6.2008 6:39pm
Xrlq (mail) (www):
Who knows how they fired her or what she was told in prior or recent reviews? Or how compassionately or sympathetically she was treated. We only know her side.


Yeah, and whose fault is that?! It's not as though she made them sign anything promising not to disparage her.
5.6.2008 10:51pm
Andy:
Lots of cries for blood on this one. Now Paul Hastings has to justify its business decisions to the blog rabble, even if the only way to do it is to publicly humiliate a woman who has already been fired and had a miscarriage? Will people be happy if Paul Hastings releases a formal statement saying that she was an incompetent lawyer? Yeah, she kind of brought it on herself by her letter, but kudos to Paul Hastings for staying above the fray on this one and not stooping to justify, to internet comment boards, what was wrong with this woman's job performance.
5.7.2008 4:14pm