Large Firms
Aug. 13, 2002
The 'L' Word Layoffs Reaches Wilson
SAN FRANCISCO - Wilson Sonsini Goodrich & Rosati told associates gathered for a town hall meeting earlier this month that layoffs were coming to the firm's corporate securities and licensing groups, according to sources familiar with the meeting.
Since then, 10 associates have been laid off and up to 70 more associates - roughly 25 percent of the firm's corporate securities and licensing groups - may be laid off over the next six months, according to sources in the legal community.
Associates learned of the layoffs during a recent town hall meeting led by corporate and securities partner John Roos, the source, a recruiter, said. Roos explained that the layoffs were "economic-based," said the recruiter, who was unsure if Roos said how many associates would lose their jobs.
Associates were told the layoffs would be based on their billed hours and profitability, the recruiter said.
"Associates were allowed to ask questions," the recruiter said Friday. "But [Roos] didn't love having all the questions asked of him, apparently."
Partners at Wilson Sonsini were not available for comment Friday, according to firm spokeswoman Andrea Vernetti. She confirmed that the meeting with associates had taken place but declined to discuss its subject matter.
One recruiter cited reports from associates with first-hand knowledge of the situation. Other sources told that recruiter that as many as 70 more associates might be let go within six months.
Another recruiter familiar with the situation said firm chairman Larry Sonsini has issued a directive to the heads of all practice groups that associates must be let go.
Meanwhile, Wilson Sonsini is hiring partners at satellite offices and first-year associates at its Palo Alto headquarters, according to the recruiter. Among other targets, the firm is in discussions to acquire the Orange County office of Los Angeles' Lyon & Lyon, which is closing its doors at the end of the month.
"They don't want to let first-years go because it gets back to campus." the first recruiter said, referring to a situation in the early 1990s when some law firms rescinded offers to newly hired associates and law school recruitment officers subsequently were reluctant to do business with those firms.
"They felt like it killed their recruiting for years after that," the recruiter said. "That's why the first-years are protected."
For the past year, the associate rumor mill has indicated Wilson Sonsini has thinned its ranks through layoffs, a claim the firm has consistently denied. However, the firm has gone from 776 lawyers firmwide in 2001 to 682 today, according to numbers reported by the firm to the Daily Journal.
"Now you're probably going to see last year's first-years get the boot, but they won't let the incoming class go," the recruiter said. "You can talk to certain first-years over there who are not being affected by the layoffs, and they don't even know [the layoffs] are occurring.
Verification of layoffs at Wilson Sonsini has been difficult because of reported nondisclosure agreements that attorneys are asked to sign. It's not clear if the firm is still requiring the agreements, according to the source, but in any case, given the poor job market, corporate and licensing lawyers are unlikely to talk.
"They're so dependent on Wilson for a referral that they're just not going to bad-mouth the firm," the recruiter said.
One former Wilson Sonsini lawyer said the firm has built up an excess of senior corporate associates. Senior associates who during the boom might have left to become in-house counsel at technology companies are now staying put, he said.
"Even the people that had the highest [rankings] all along during their career at Wilson didn't make partner [last year], and it's unlikely they'll make it this year," the former associate said. "[Partners] don't want to share the pie with a larger group."
Joel Rosenblatt
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