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March 27, 2009 6:32 PM

Skadden Showing Staff Employees the Door

Posted by Brian Baxter

Two weeks after opening up its 'Sidebar' program to incoming associates as a means of encouraging one-year deferrals, The Am Law 100's top firm by gross revenue has succumbed to the wave of staff layoffs sweeping the legal industry.

This week Skadden, Arps, Slate, Meagher & Flom began a round of layoffs among its 2,000 non-lawyer employees. Besides legal assistants, paralegals, and secretaries, the layoffs are also said to affect staff attorneys.

News of the staffing cuts first appeared on Above the Law.

One source who requested and received anonymity tells The Am Law Daily that the layoffs don't exceed more than five percent of Skadden staffers in the firm's nine U.S. offices. The source says that the actual number of individuals laid off is likely much lower than that, but couldn't pinpoint an exact number.

Sibling publication Legal Times reports that at least 25 staff positions have been cut from Skadden's Washington, D.C., office. Michael Rogan, the head of the firm's D.C. office, tells Legal Times the reductions were made for economic reasons.

No associates were let go in the purge and the firm is not thought to be entertaining the idea of lawyer layoffs outside of its staff attorney ranks. The firm, which declined to comment, won't know how many incoming associates have chosen to take deferrals until early April.

Skadden reported gross revenues of $2.2 billion in 2008, an increase of 1.4 percent from the previous year. Profits per equity partner declined 9.5 percent to $2.06 million and revenue per lawyer fell 5.5 percent to $1.10 million.

Despite eliminating special bonuses ranging from $10,000 to $50,000, the firm set the bar high in November when it announced annual bonuses between $35,000 and $60,000 for its 1,400 associates. The bonuses were comparable to 2007 levels.

Our own Nate Raymond wondered in January whether Skadden had spent too much, while other firms that halved associate bonuses like Cravath, Swaine & Moore saved millions.

It was a notion seconded by one anonymous source who e-mailed us claiming to be a staff member laid off by Skadden.

"Now many of us are losing sleep and jobless so that the partners and associates can add those bonus dollars to their already inflated bank accounts," wrote the individual.

But Skadden is hardly the only firm tightening its belt with staff cuts.

Gibson, Dunn & Crutcher announced on Friday that it was letting go of 36 staff members across its nine U.S. offices, reports Legal Times.

Related
The Layoff List
The American Lawyer

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