The Heller Ehrman Layoffs: Don't Believe the Spin?
We recently made passing reference to the staff layoffs at Heller Ehrman, which firm management claimed were made to enhance efficiency, and not due to slow business. But one of the affected employees begs to differ:
Don't believe Heller Ehrman's claims that the layoffs were not because of slowdowns. I was a paralegal who worked at Heller for [several] years. The past year has been the slowest in litigation we have ever experienced....I enjoyed my job, and [found that Heller] was a great place to work. [But in] the past two years, the whole culture and the focus of the firm changed (or is in the process of changing).
Everyone's billable rates were raised to such heights that competing for business became pretty distasteful to many of the shareholders. It's not easy to justify $200 to $300 an hour for paralegals.
Are layoffs the flip-side of the associate pay raise coin? More after the jump.
Of course, some lawyers just leave of their own accord. From our same source:
We lost many very talented attorneys in the last couple of years. I was almost always impressed with the integrity of and work ethic displayed by the attorneys with whom I worked.The news reports say that no attorneys were laid off, which is true, but that's because the attorney to staff ratio had already shifted dramatically due to attrition. I was provided with a severance package but was horrified that the firm laid off mostly staff that had been there for many years and who had felt a real loyalty to the firm. I suppose they are cleaning house and it's "out with the old and in with new."
If staffers are being laid off, can associates be far behind?
Well, maybe not. Right now the market for young lawyers is still fairly tight. And firms that do lay off associates have to contend with that recruiting albatross for years to come, even after work has picked up again and they need associates badly.
But staff layoffs, even if they don't foreshadow associate layoffs, are still worth watching. They serve as a "canary in the mine" of sorts, with respect to a law firm's financial health.
Heller Says Slowdown Not Behind Layoffs [The Recorder via Law.com]













Comments
First!
Posted by: Firstenstein | October 15, 2007 01:58 PM
A friend of mine was an associate there for many years, never got a bad review, then all of a sudden this year was told his work wasn't good enough and given a couple of months to find another job. His practice area had been very very slow for over a year and he was not the first associate asked to leave based on bogus reviews. . . .
Posted by: 2cents | October 15, 2007 02:11 PM
Bogus reviews is always the party line of those who are laid off. Maybe the reviews were "bogus" or maybe your friend just did poor work the last year. For the "bogus" review theory to hold up, you have to assume that all people involved in the formal review process are in a secret conspiracy to lie about someone's skills. For the "your friend did poor work" theory to hold up, all we are required to believe is that your friend did poor work. Given the options, and without any further information, I find the theory that your friend did poor work his/her last year to be most plausible.
Posted by: Anon | October 15, 2007 02:22 PM
$200-$300 hourly rate for paralegals?
Posted by: anon | October 15, 2007 02:22 PM
And they are hiring, both attys and paras.
http://www.hewm.com/en/careers/attorneys_openings.aspx
I believe the propper term here is "Booyaka"
Posted by: Anonymous | October 15, 2007 02:25 PM
Heller's best attorneys left for Orrick quite some time ago. It appears that they have tried to hold the line on pricing in order to maintain their revenue stream--but there is a limit to everything. Laying off staff is the most sensible way to maintain revenue potential while lowering costs. But they need to buy a rainmaker and incentivize him or her to drive the business.
Posted by: Magliovelli | October 15, 2007 02:26 PM
2:22
The most plausible theory is that the firm doesn't have enough work, so they have to let people go. Heller hires top students from the best schools. Was the associate's work so poor that they couldn't keep him on doc review? No.
Posted by: Anonymous | October 15, 2007 02:28 PM
2:22, I have never been laid off from a job, but you must either be completely naive about how firms operate or a complete ass.
Posted by: layoffs | October 15, 2007 02:36 PM
The few staff members that I've personally worked with who were let go (paralegals) were sub-par. The timing was clearly dictated to some extent by the slow-ish year many practice groups are experiencing this year (though I'm set to bill more this year than I've ever billed before), but the people I knew who left shouldn't have been there in the first place. Having looked at bills, 2:22, paralegals do indeed bill out at $200-300 an hour (which I don't think is uncommon among large law firms) -- and for that money, you don't want people who have to have things explained to them 5 times before they can perform the task.
As far as stories like 2:11's, the only associates who are ever told to start looking for other employment (as far as I know) are 9th or 10th year associates whom the firm has determined are not partner-material. The problem is that the firm seems to have become more intent on cherry-picking lateral partners than promoting from within over the past 5-7 years, so there are doubtless more of those conversations than there were in, e.g., the 1980s (when Heller was truly a "lifestyle" firm).
There is definitely some truth to this former staffer's observation that the feel of the firm has changed drastically (though I think that was really over the last decade--not the last 2 years). "Running the firm like a business" is a mantra -- but I think that's an industry thing in general, and not something specific to Heller. The effects just feel worse here because--unlike, e.g., the big NYC sweatshops, Heller used to be quite different.
Posted by: Heller Associate | October 15, 2007 02:38 PM
Concur with 2:28/2:36. If a firm lays off associates, it makes the front page of the legal news, and hits them hard in recruiting for future years. Look at what happened to Bingham a few months ago when the let go a group of associates. If they instead select a few associates and give them bad reviews, it serves the same purpose without any bad press.
If the associate really did a bad job, he or she would be fired, not given months to find a new job or a severance package.
Posted by: Anon | October 15, 2007 02:46 PM
2:22
I was at a big firm that failed several years ago. We could see the problems with the firm long before anyone was willing to admit them out loud. Over the firm's last 9 months, I knew plenty of people who were the victims of bogus appraisals in order to give the firm grounds to lay them off.
It started with small profitable groups leaving for better profit participation or partnership promises at other firms. The firm instituted quarterly meetings for associates to ask questions. Of course, no one had the nerve to ask what was going on or to challenge their statements that there was nothing to be worried about, that we were all top notch attorneys with great futures at the firm ahead of us. Suddenly one quarter, the managing partner began saying that if we weren't busy, we should assume that it was because we were not good attirneys, and perhaps we should consider leaving for work we were more suited to. The problem was that NO ONE was busy.
Posted by: Anon E. Mouse | October 15, 2007 02:50 PM
But 2:28, we don't know how senior this person was. Clients don't want to pay, e.g., $400+ an hour for a 4th year associate to review documents--much less $500 for a 7th or 8th year.
Posted by: Anonymous | October 15, 2007 02:50 PM
But, 2:50, the question is, did you really LIKE working at Coudert anyways?
Posted by: Anonymous | October 15, 2007 02:55 PM
2:22 is correct, and the rest of you are just paranoid or so egotistic to think that anyone like you could never do sub-par work meriting a bad review. Get real. While I think BigLaw partners are greedy, and many are asses, I am not to the point yet where I think the majority of partners at any firm fall in the category of conspirators willing to lie about reviews in such a systematic way. Call me naive -- I call you dillusional.
Posted by: Heller shot JFK | October 15, 2007 02:57 PM
"If the associate really did a bad job, he or she would be fired, not given months to find a new job or a severance package."
Not true with people I have seen. Unless you truly screw something up to the extent that you need to be escorted out the door, it's rare for an associate doing a bad job to be "fired." More often, the issue lingers for a while, you get less work -- and the work you do get is non-substantive -- until your formal review. At that point, the associate might be told to start looking for a new job. There are two reasons for this delay: (1) Firms really are pretty reluctant to fire people, especially if they "like" you. (2) Most partners really don't have the sway to get your fired just because you did a bad job for them; at most firms, I'd say there are only a handful of partners with that kind of power.
Posted by: Mee | October 15, 2007 03:01 PM
Heller shot JFK -- why would a "majority of partners at any firm" necessarily have to be involved in the conspiracy? That makes no sense.
For example, take a smallish practice group somewhere -- say, ERISA litigation or something -- that has encountered a rocky patch & a shortage of work. Those few (maybe 2 to 6) partners realize they have too many associates spinning wheels, and they decide to give them bad reviews. The corporate partners or the general commercial litigation partners wouldn't know these associates from Adam [or Eve] and so they take the word of those few partners who actually work for them. Those reviews get accepted, and the associates are then told to move on.
Viola, some associates pushed out due to "bogus" performance reviews, and a scenario that hardly involves a "majority" of the partnership.
Posted by: circuitclerk | October 15, 2007 03:04 PM
2:50, we do know that the person worked there for "many years." Sounds like the normal story associates who don't make partner get at up-or-out firms.
It sounds like this person is the type who would accept a cold offer because he didn't realize it was cold. The purpose of this story is to make a firm look rotten, when in fact it says, "World, I'm clueless!"
Posted by: anon | October 15, 2007 03:07 PM
Heller kinda sucks donkey balls - always have.
Posted by: A | October 15, 2007 03:29 PM
2:22, gimme a break - typical douchebag down the hall of your friendly biglaw firm.
Despite the BS that most of our bosses put out there, doing quality work is very low on the list of requirements to do well at a large firm like Heller.
You're probably one of those people that justifies working 15 hours every weekend because of the "cutting edge" work in BIGLAW. Haha.
Posted by: anon | October 15, 2007 03:47 PM
COZEN O'CONNOR TO 135K.
Posted by: Anonymous | October 15, 2007 03:51 PM
Re: willingness of partners to lie, what is a "cold offer" if not an institutionally-sanctioned lie? Why does anyone assume that the same thing doesn't happen when it comes to layoffs?
Posted by: Anon | October 15, 2007 04:10 PM
How does a cold offer work? Does the firm tell the person 'you've got an offer but don't come back' or is it less direct than that?
Posted by: Anon | October 15, 2007 04:33 PM
Anyone at the firm have actual thoughts for someone considering a summer associate offer?
Posted by: Anon | October 15, 2007 04:36 PM
I don't think partners have to lie per se in giving reviews, but it's quite easy to give a disproportionately bad review, magnify small things, harp on one thing to the exclusion of the other positive things, etc... and voila you have a bad review. With the exception of the outliers (stars and complete dumbasses), most people are doing well 80 to 90-some percent. It's just whether and when those little mistakes come back to bite you. And that is under the complete discretion of the partners you work with and how much they care/don't care about you. Everything is about *chemistry* of the relationship really... I've seen some dumbass senior associates/partners get along well with dumbass junior associates, and such dumbass junior associates do fine.
Posted by: Anonymous | October 15, 2007 06:11 PM
4:36, I wouldn't worry that attorney layoffs will happen -- I really don't see it. That said, you shouldn't expect a "lifestyle firm" experience. I know from my experience compared to the experience of friends of mine who took the bait and went to "higher Vault-ranked" firms, that Heller is generally still a more collegial and "nice" place, requires far less "face time" (the office is always at least half-empty by 6 -- and was that way even when we had bumper years is 2004 and 2005), and requires less billable hours than its more traditional "sweat shop" counterparts. Heller's 1900 minimum is real--you won't get any bonus for hitting those hours, but you also won't get sat down for it; that's not true at lots of firms (e.g., Latham, Gibson, OMM).
The thing is that Orrick is the same way, plus it pays a ton more money. But barring re-interviewing only with Orrick, even now you're probably still going to sacrifice some "lifestyle" (as well as early responsibility) if you go elsewhere. (E.g., I know tons of people at MoFo that went three years without ever taking a depo, or really doing much other than reviewing documents; I don't know anyone who's had that experience here--I started taking depos and writing dispositive briefs in year 1.)
Posted by: Heller Associate | October 15, 2007 06:38 PM
I think 2:38 & 6:38 ("Heller Associate") has it exactly right.
To support one point that poster made, of the paralegals that I know of that were let go, they should have been fired years ago. That's not to say, of course, that all of the support staff that were let go were not good performers.
Posted by: A former Heller associate | October 15, 2007 06:59 PM
I generally agree with 2:38 but I do know that there were at least a few paralegals that were let go that most people thought of as good performers (plus this isn't the first round of layoffs they've done). Heller in general has had a really large support staff in comparison to other firms so I don't think the downsizing is necessarilly indicative of bad health. But, I have heard they've been really slow lately, but maybe that's just seasonal.
Posted by: Former Heller Staff | October 15, 2007 07:08 PM
Does the old male partner give the hot young associate a negative review when she screws up her simple memo assignment? No. You'd think she would have done better given the amount of time the partner and associate spent discussing the matter.
What about the quiet Asian kid? Is anyone giving him a second chance if he screws up? No. Reviews are BS for 80% of the associates that fall in the middle.
Posted by: Anonymous | October 15, 2007 07:15 PM
I interviewed for a Summer Associate position at Heller's SF office for 2008. I was told by multiple junior associates that there wasn't enough work to go around, and that when they asked for more work, the partners told them to do pro bono work just to make their billable minimums. They also did not raise last summer's SA salaries to match market, and it is my understanding that both summers who asked why not were cold offered. I was also told during my interviews that this summer's class will be half of the size of the last few summers' classes and that the firm had "over hired" in previous years. To me, those things, plus these layoffs = clear signs of financial trouble.
Posted by: Anonymous 2L | October 15, 2007 07:18 PM
7:18 - bullshit. Let me guess, you interviewed and then got a thin envelope.
Posted by: Anonymous | October 15, 2007 07:31 PM
"when they asked for more work, the partners told them to do pro bono work just to make their billable minimums."
7:18, that makes no sense. The whole point of pro bono is that it brings in *zero* money for the firm--it is not "billable". I can imagine attorneys who are slow being told to use the time/opportunity to work on pro bono matters (that might actually get a junior associate stand-up court experience), but it's silly to present this as some kind of sweat-shoppy threat; again, the partners have very little financial interest in associates doing a bunch of pro bono (only indirectly in that the associates gain skills).
Posted by: Anonymous | October 15, 2007 07:50 PM
I interviewed and got an offer. I really liked the people I met there, but I turned down my offer because of genuine concerns about the firm's financial stability. I am at a top 3 law school and I can tell you I am not the only one who turned down Heller for this reason. Whether true or not, the word on the street at my law school is that Heller is likely having financial problems.
Also, I didn't mean that there was a financial incentive for partners to have associates do pro bono, or that pro bono was being used as a threat, or that it is a bad thing, or that it provides inferior experience. I only meant that the associates to whom I spoke implied that there was not enough billable work to go around. Period. Heller counts pro bono toward billable goals, so the implication was that doing a lot of pro bono was the ONLY way available to meet your minimums, which, to me, implies financial problems.
Posted by: Anonymous 2L | October 15, 2007 08:19 PM
Heller doesn't actually count pro bono toward the 1900 minimum billable (only toward bonus targets that start at 2100 hours). But point taken.
Posted by: Anonymous | October 15, 2007 09:08 PM
I don't know if the firm is having financial troubles, but I sometimes regret not accepting the offer they once gave me. Seemed like a pretty good place to be.
Posted by: Anon | October 15, 2007 09:13 PM
I received an offer from their Seattle office but declined because their summer program is "competitive." They told me they rarely give offers to all of their summer associates. And there was an utter dearth of mid-level associates. I couldn't find an associate more senior than 2 years.
Not good signs my friends...
Posted by: HELL | October 15, 2007 11:00 PM
HELL: Did you try looking on Heller's website for associates more senior than 2 years? I just did. It took about 30 seconds, and guess what? They have some.
Posted by: Anonymous | October 15, 2007 11:12 PM
Consistent with 7:18, it is true that Heller summer associates complained about not getting the raise:
http://www.abovethelaw.com/2007/08/heller_ehrman_wheres_raise.php
There are more comments about Heller in the comments to that post.
Posted by: Heller Ehrman summer program | October 15, 2007 11:40 PM
9:08: That is not true.
Posted by: Anonymous | October 16, 2007 12:17 PM
I work there, idiot. It is true. 1900 BILLABLE, and from there on out pro bono counts equally toward the 2100, 2200, 2300 and 2400 bonus levels. If you bill 1700 and then a bunch of pro bono, you have failed to hit your billable minimum and you are in trouble.
Posted by: 9:08 | October 16, 2007 01:17 PM
1:17: That's not the policy in the NYC office.
Posted by: Anonymous | October 16, 2007 01:26 PM
Well that IS the policy in San francisco. Heller holds itself out as a having a great pro bono policy but it actually kind of sucks compared to other Bay Area firms.
Posted by: Anonymous | October 16, 2007 01:46 PM
The problem with Heller is that it tries to sell itself as something more than just a big corporate law firm, which it's not anymore. Maybe it used to be great--maybe it used to have a great atmosphere and wonderful people, but now it is just a big sterile impersonal BigLaw firm that doesn't pay competitively and has unhappy associates.
Posted by: Anonymous | October 16, 2007 01:54 PM
11:00 is right. Heller Seattle no offers about a third of it's summer class each year. This year was no exception - it was 3 of 9 that got the ding.
Posted by: Anonymous | October 16, 2007 01:57 PM
All of you weenies are warped. The stale air in those firm joints is killing your brain cells. Stop starting at your computer screens and do something useful with your sorry lives.
Posted by: Anon | October 17, 2007 02:26 AM
All of you weenies are warped. The stale air in those firm joints is killing your brain cells. Stop starting at your computer screens and do something useful with your sorry lives.
Posted by: Anon | October 17, 2007 02:26 AM
Who cares about all this? Go home and enjoy a decent meal for a change.
Posted by: Anon | October 17, 2007 02:31 AM
FYI: NALP form isn't up to date. Go to their website and look for 4th-6th year associates.
Posted by: HELL | October 17, 2007 10:16 AM
Good post, 8/17 2:31am! Seriously, all you people debating this are big-time losers! Stinks for the staff members that were laid off; the attorney types should keep things in perspective, though. Talk about WARPED. Oh no, you're making a six-digit salary that could feed a starving five-person family in a small third-world country for a year--am I supposed to feel bad that you aren't hauling in that extra bonus? Give me a break. No wonder most of you can't get a date--who would want to spend an evening with nasty souls like you? You'd sure as hell bore me to death with talk like this. Freaks!
Posted by: Anonymous | October 17, 2007 01:50 PM
01:50: jealous any?
Posted by: Hell in a Handbasket | October 23, 2007 07:53 PM
01:50: jealous any?
Posted by: Hell in a Handbasket | October 23, 2007 07:53 PM
1:54...you hit the nail on the head. They lost site of their...eh hmm...'core values'.
Posted by: HELLer | October 25, 2007 01:45 PM
1:54...you hit the nail on the head. They lost site of their...eh hmm...'core values'.
Posted by: HELLer | October 25, 2007 01:46 PM
1:54...you hit the nail on the head. They lost site of their...eh hmm...'core values'.
Posted by: HELLer | October 25, 2007 01:48 PM