Ed. note: Above the Law has teamed up with Law Shucks, which has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.

Regular readers of this column are well aware by now that the overall unemployment rate isn’t a particularly good indicator, but it’s the most-commonly discussed number so we use it. The predictions are always wrong, and the rate grossly undercounts the number of people any reasonable person would define as unemployed. But for all its problems, it’s not entirely useless to show trends.

According to the Bureau of Labor Statistics:

The unemployment rate fell from 10.0 to 9.7 percent in January, and nonfarm payroll employment was essentially unchanged (-20,000), the U.S. Bureau of Labor Statistics reported today.

That’s what we’ve been harping on all along. Overall unemployment didn’t improve because of a flood of people going back to work; it improved because so many people fell out of the BLS’s definition. We remain frustrated by any definition of unemployment that doesn’t include people who got frustrated and gave up looking or whose unemployment had outlasted their benefits.

Yesterday we reported on layoffs at Howrey. Our sources told us that 100 people were axed, but a Howrey spokesperson declined to give us firm numbers.

It turns out that our sources were pretty accurate. The firm confirmed to AmLaw Daily today that it laid off 94 people: 29 associates and 65 staff, from 10 offices. A tipster says one-third of the “reduction-in-force” took place in Howrey’s D.C. office.

The rumor mill at the firm is still churning, though, claiming that Howrey has taken a number of actions to cut costs — and that the number of laid-off individuals may be higher than 94.

Update: Howrey has confirmed that 94 people were laid off. More information here.

Howrey LLP has been generating a lot of news recently. Last week, the firm got hit with a $30-million racial discrimination suit by a former Brussels-based associate. But the rumor mill there was already churning with other, more depressing news here in the U.S.

Sources say that 100 people were laid off today. The firm has confirmed that layoffs took place, though it won’t confirm the numbers. Update (Feb. 3): Howrey gave solid numbers to AmLaw Daily today. The 100 figure was pretty accurate. The exact figure was 94 people: 29 associates and 65 staff. We’ve also heard reports that the firm asked some associates to go part-time

From a tipster:

Howrey has just internally announced sweeping layoffs, something everyone here saw coming for a very long time once the 2009 numbers came out. This is the first time I’ve heard Howrey actually use the word “layoff” in an e-mail to its associates.

An email went out this afternoon from managing partner and CEO Bob Ruyak. Here’s an excerpt from the email, available in full, along with a firm statement, after the jump:

While demand from clients for our services remains stable, it does not, unfortunately, provide enough work for all of our attorneys and staff to be fully utilized.

This contradicts what associates were told on a recent firmwide conference call…

Is it me or has there been an awful lot of news coming out of Wisconsin recently?

Last week a Wisconsin prisoner was denied his fundamental Dungeons & Dragons rights — rights that would be protected by my class 8, Constitution of Living, artifact. Then we had a story about an attempt to bring cast members from the Jersey Shore to speak at the Wisconsin Law School graduation.

That attempt failed. We understand that Wisconsin Governor Jim Doyle will be the commencement speaker. Perhaps Wisconsin law students can use the opportunity to convince the Governor to protect state jobs in Wisconsin’s district attorney offices. As it stands right now, a number of Wisconsin D.A.s are slated to be fired. But in a textbook example of “how to strike fear into the hearts of your employees,” Wisconsin D.A.s don’t know who will be shown the door, or when, or how many of them will be fired. The ABA Journal reports:

Prosecutors’ offices in Wisconsin have received notices from the state that they will face layoffs, leading to public safety worries and contingency plans.

It’s not known how many layoffs are planned or when they will occur, according to WQOW18 and the Milwaukee Journal Sentinel. The state budget crunch is forcing the cuts.

After the jump, press from around Wisconsin has watched enough Law & Order episodes to know that you can’t have successful crime fighting without capable district attorneys.

Ed. note: Above the Law has teamed up with Law Shucks, which has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.

We’re coming down to the wire on the Law Shucks Lateral Tracker launch promotion iPhone 3GS giveaway. Read the announcement and the rules, then get those submissions in by midnight January 31 for your chance to win the phone or the other prizes.

Initial jobless claims dropped slightly last week, to 470,000, which was slightly better than the previous week, but once again not in line with the expected 450,000. That actually caused the four-week moving average of initial claims to increase slightly, which isn’t usually a good sign.

But there may now be cause for guarded optimism. The US economy grew by 5.7% in the fourth quarter, the fastest pace in six years. That spending was in infrastructure, not directly in jobs, but it could presage increased staffing. President Obama is hoping to spur that along with a one-year, $33 billion tax credit for small-business new hires and a payroll-tax reduction.

On the whole, though, the week in law-firm economic news was relatively good. Details after the jump.

Ed. note: Above the Law has teamed up with Law Shucks, which has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.

Unemployment rose again last month, climbing higher in 43 states, which is particularly surprising when compared to the 36 states that reported improved numbers in November. Once again, it might have been worse, but for the curious ways in which the unemployment rate is calculated:

In another nationwide trend, long-suffering states like California and Michigan saw their jobless rates stabilize even as they continued to bleed jobs. That’s because thousands of frustrated workers gave up hunting for work and dropped out of the labor force, which means they aren’t included in the unemployment rate.

Contrary to common sense, the unemployment rate isn’t calculated based on the total number of people who don’t have jobs, so people becoming so frustrated they quit looking actually improves the number (even though they’re certainly telling their friends they’re unemployed because, you know, they don’t have jobs).

Overall, 85,000 jobs were lost in December (compared to a 4,000 job increase in November) - but 600,000 people left the labor force in the same period. So the numbers are even worse than the record levels they’re currently reaching. For example, New York’s unemployment rate is nine percent, a 26-year high, and New Jersey’s 10.1% is a 33-year high.

The trend isn’t looking much better lately, either. First-time jobless claims rose 36,000 to 482,000 last week, once again surprising economists, who had a consensus estimate of a slight decrease (although this week’s numbers might be slightly off due to estimating necessary as a result of the Martin Luther King holiday). That marks the first time the four-week rolling average has increased in 19 weeks.

But that’s the big picture. After the jump, the goings on in the legal sector.

Last week, Seyfarth Shaw kicked off a round of 2010 layoffs. Today, Wilson Sonsini followed suit.

The firm just announced that it is laying off staff. Here’s an excerpt from the firm-wide memo:

[A]fter a long and thorough analysis, we have concluded that these changes have made it necessary to downsize the ranks of our staff by approximately 20 employees nationwide, primarily in the secretarial area. We emphasize that the downsizing is a regretful but prudent business decision and no reflection on the skills and performance of the employees involved, who already have been informed of the specifics of this decision. The firm will provide separation pay and support services to help them transition.

It looks like another law firm just got a look at its 2009 profit numbers and found them unappealing. But at Wilson, this is the second year in a row that the new year has brought about new layoffs. In January 2009, Wilson Sonsini laid off 113 people (68 staff) because of the economy. At least this round of New Year’s layoffs isn’t as deep.

In September, Wilson froze the salaries of its secretaries, evidently the firm decided it needed to make a stronger move.

Good luck, Wilson Sonsini friends.

Read the full firm memo after the jump.

Many associates are hoping that 2010 will bring an end to the layoffs, pay cuts and deferrals of 2009. But so far January has brought more of the same at several major law firms.

This week, our ATL / Lateral Link survey asks whether you think your firm will institute more layoffs and pay cuts in 2010 or if things are finally on the rebound.  We’ll use the information to update the ATL Career Center and bring you the results next week.

If you have information about your firm that you want to share with other career center users, please email us at careercenter@abovethelaw.com.

Cadwalader conducted layoffs, early and often. Massive, bloody layoffs. Now, Am Law Daily tells us what they won:

Cadwalader, Wickersham & Taft on Tuesday reported a 28 percent increase in profits per partner, the firm’s first positive results since 2007.

Yet while the firm enjoyed a slight increase in net income, some of the increase in its per-partner average earnings appears attributable to a nearly 21 percent loss in the number of equity partners. Gross revenue fell nearly 10 percent, a drop that W. Christopher White, the firm’s chairman, calls “very strong in light of a steep contraction in the finance market.”

I think that there are going to be a lot of stories about firms that conducted massive layoffs who are now experiencing PPP increases.

More details after the jump.

Ed. note: Above the Law has teamed up with Law Shucks, which has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.

If you thought unemployment and underemployment (which does include people who become discouraged and voluntary stop looking for work) were arbitrary and capricious, you’ll really enjoy the latest explanation from the White House.

The White House has abandoned its controversial method of counting jobs under President Barack Obama’s economic stimulus, making it impossible to track the number of jobs saved or created with the $787 billion in recovery money.

Despite mounting a vigorous defense of its earlier count of more than 640,000 jobs credited to the stimulus, even after numerous errors were identified, the Obama administration now is making it easier to give the stimulus credit for hiring. It’s no longer about counting a job as saved or created; now it’s a matter of counting jobs funded by the stimulus.

That means that any stimulus money used to cover payroll will be included in the jobs credited to the program, including pay raises for existing employees and pay for people who never were in jeopardy of losing their positions.

That lede is a little skewed, though - it was always impossible to track the number of jobs saved or created. The administration just finally realized that, and now the Republicans are going to have to find a new angle of attack after coasting for a year on easy cheap shots against the White House’s unsupportable numbers.

However many jobs the plan saved, created, or funded, unemployment ticked up again slightly last week, but the general trend is still flat or slightly improving.

Similarly, law-firm layoffs have slowed down, although there are still no signs of significant hiring. Developments in that little slice of heaven after the jump.

Apparently, cutting salaries, changing its compensation structure, and canceling its summer program just isn’t getting Seyfarth Shaw the kinds of cost savings it needs.

So the firm has returned to the old fail-safe option: layoffs. Am Law Daily reports that the firm laid off approximately 20 attorneys and 20 staffers.

The firm-wide email from Seyfarth Shaw describes the layoffs as needed to better position the firm to take advantage of “opportunities” in the market:

We see opportunities for creating or strengthening client relationships in all of our departments; however, we also know that we must approach these opportunities with the most effective use of our people and their skills.

As a result, we implemented today a separation of approximately 20 attorneys and approximately 20 staff members from a total of about 1,500 people nationwide. In some cases, these decisions were made to better match current or anticipated workloads; others were made as a result of our annual performance management process for attorneys. The separations were spread across multiple offices and practice groups. We have talked to each person affected prior to the distribution of this e-mail.

One Seyfarth Shaw tipster who still has a job told us that they preferred layoffs of some people over additional salary cuts for everybody.

Clearly, we’ve moved well beyond the “survivor’s guilt” stage of Biglaw layoffs. At this point, people are just trying to hang on.

Read the full Seyfarth layoff memo, after the jump.

In November, we reported that Schulte was letting people go. We noted that Schulte decided to lay people off before the holidays.

Now it appears that Schulte wasn’t exactly being a total Scrooge. It looks like Schulte let people know they were going to be fired back in November, but those layoffs become official this Friday.

Well, at least people were still able to draw a paycheck through the holidays. I imagine the holiday season unemployment line is one of the most depressing places on earth.

In November, we reported that 13 people had been let go. Now that people are actually set to leave the office, that number has gone up.

Details after the jump.

Ed. note: Above the Law has teamed up with Law Shucks, which has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.

The year isn’t off to a good start, but it’s the same bad news it’s been for a while. Focus is increasingly turning to the underemployment rate, rather than the unemployment rate.

It’s the same old denominator problem. Unemployment looks not bad (relatively speaking) at first glance - it was flat at 10.2%. But 661,000 people left the US labor force last month and a similar number of jobs were lost. Had the denominator remained constant, unemployment would have been 10.4%. Overall, 1.7 million Americans left the workforce in the second half of 2009, which was a 1.1% decline, and the workforce as a percentage of total population hit the lowest point since 1985.

That could make for an interesting contrast - the unemployment rate may increase as disaffected people become optimistic about their prospects and re-enter the workforce, even as jobs aren’t actually opening up at the same rate. So higher unemployment may well be a positive indicator, to the extent it results from an increase in the denominator, rather than another decrease in the numerator. In other news, ignorance is strength and war is peace.

But last year is last year, and we’ve already recounted its failings vis a vis law-firm layoffs.

What’s happening now? After the jump.

Last January, Cahill Gordon & Reindel started the year by cutting approximately 10% of its associates. Sources report that 2010 is off to a similar start.

Says one tipster:

[I]t’s about 20-25 people. Mostly younger associates but some more senior people as well. Standard 3 months severance….

[I]t’s being termed performance based, typical stuff related to year-end reviews, etc. But the subtext and what people are being told is that it’s largely about there being too many people.

We reached out to the firm for comment this morning, but have not yet heard back. One of our tipsters claims that this round of layoffs will make Cahill New York as white as freshly-fallen snow…

Ed. note: Have a question for next week? Send it in to advice@abovethelaw.com.

Dear ATL,

Deferred associates are starting soon at my V100 firm… which is *odd* because there’s not enough work to go around. At least not for junior level associates, because the mid levels and senior levels hoard work for themselves. So if my firm is going to downsize juniors, do you think they’re more apt to fire these incoming associates or other junior level associates with slightly more tenure?

How Will I Know if He Really Loves Me

Dear How Will I Know if He Really Loves Me,

Luckily this question came in over the holidays, so I had the chance to go home and consult my sister’s Ask Zandar game and get what you really need, which is a wizard’s opinion. I first asked, “Zandar, will this person’s firm fire incoming associates first?” Zandar did not reply. I then asked, “Zandar, is it unacceptable for my 17 year-old cousin to have Neytiri from Avatar as his screensaver?” And when Zandar once again failed to reply, I realized that he had no batteries.

As you may have noticed, things are looking up these days. Bonuses are hitting people’s TD Banks, there’s salary thaws, “true-up” raises* — and the whole global warming trend turned out to be just a weird ’90s phenomenon. On ATL, we’ve traded in Bloody Tuesdays or Outplacement Thursdays for lighter fare about holiday greeting cards and courthouse shootings. Unless executives go back to stealing from their companies — which they won’t be doing because we have rules in place now to deal with that sort of thing — the days of mass layoffs are over. This is the dawning of the Age of Aquarius.

So, to those of you who have spent the last year afraid to jinx yourself by unwrapping your 2009 BNA Tax Code — RELAX. The Committee of Public Safety isn’t blocking off conference rooms anymore. But if they do, they’ll certainly fire you first, because if they wanted to fire the people they’re bringing in, they just wouldn’t have had them start. Also, they’re cheaper.

Your friend,

Marin

The cast of Hair lunges into the audience and awkwardly forces you to participate, after the jump.

Thanks to everyone who submitted possible nominees for our Lawyer of the Year award. We reviewed your 160+ comments and developed a slate of ten worthy candidates.

Before we reveal them, we’ll talk about a few folks we passed over. A number of you suggested Mike Leach, the lawyer turned football coach who was recently fired by Texas Tech University. Although Leach’s achievements on the gridiron are considerable, he’s more of a football figure than a legal figure, so he didn’t make the team.

A few of the lawyers you suggested, while certainly well-known, really belong to years prior to 2009. These include former New York governor and Attorney General Eliot Spitzer, who resigned in disgrace after his dalliances with prostitutes came to light; former administrative law judge Roy Pearson, of the infamous $54 million (originally $67 million) pants lawsuit; and prominent IP litigator Jeremy Pitcock.

Also named: Kathy Henry, a former Legal Secretary of the Day, whose alleged oversight could have cost PepsiCo a pretty penny — over a billion dollars (until the default judgment was vacated). But since she’s a legal secretary rather than a lawyer (or even a law student), we passed her over.

So who made the cut? Check out the nominees and vote for your favorite, after the jump.

While I was off sampling eggnog from all across the land, Law Shucks was busy crunching numbers.

To no one’s surprise, it turns out that 2009 was a very difficult year for those trying to hang onto Biglaw jobs:

2009 will go down as the worst year ever for law-firm layoffs. More people were laid off by more firms than had been reported for all previous years combined.

So much for Biglaw being the safe, fallback option.

Numbers after the jump.

Ed. note: Above the Law has teamed up with Law Shucks, which has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.

You take the good, you take the bad, you take them both and there you have the facts of modern American unemployment. In this case, the good is that unemployment decreased in 36 states in November. The bad is that first-time claims were higher than expected last week.

We try to be optimistic (see, e.g., the Law Shucks Bonus Tracker), but it’s tough. Take that "good" news, for example. Not only does that mean that unemployment was up in 14 states (we’ll ignore DC and PR for now), but it’s hardly "good" news that the unemployment rate was "only" 10.6%, as was the case in Kentucy, which was down from 11.3%.

Commenters love to debate what got us here, but the general public isn’t happy about what’s being done to fix it. A majority of Americans disapprove of President Obama’s handling of the economy (and healthcare, but that’s beyond the scope of this column). Those two issues have caused his overall approval rating to plummet as well, down to 50%, from 69% less than a year ago. He’s keeping a positive mindset about the whole mess, though, saying that he’s more concerned about how he’s positioning the country for the future and giving himself a "B+."

Obviously, he’s down with his alma mater’s stance on grading curves (read: grade inflation). At least he didn’t throw big-firm lawyers (directly) under the bus like he did our bank clients, blaming the recession on "the irresponsibility of large financial institutions on Wall Street that gambled on risky loans and complex financial products, seeking short-term profits and big bonuses with little regard for long-term consequences."

This column covers the gamut of law-firm economic developments, and we were fully expecting to not be writing about any layoffs per se this week.

Whoops.

Last week, we shared with you a very interesting internal document from Simpson Thacher & Bartlett: a collection of notes or informal minutes from a June 2009 partners’ meeting. The notes discussed attorney headcount, possible layoffs, and compensation, among other subjects.

Today we have even more deliciousness for you: an internal memorandum from executive committee chairman Pete Ruegger to the executive committee, transmitting the complete minutes of the June 8 partners’ meeting. As it turns out, the version of the meeting notes that we previously published was accurate, but not complete.

Here’s an excerpt to whet your appetite. If you think that a return to the heady days of 2007 is just around the corner, as the economy improves and Wall Street strengthens, think again:

• As we dig out of the recession, hopefully with increased utilization and decreased headcount, we should do better in 2010 and beyond, but we do not think our gross revenues and premiums are going to return to 2007 levels and our net income is unlikely to return to 2007 levels in the next couple of years.

As the matrix shows, if we can get our average hours back up over 1800, we can still have a $1M+ [partnership] point at 88% realization. But, Simpson Thacher and our peer firms are going to be less profitable businesses than they were. Pricing and margins are going to continue to be challenging. At least in the short to mid-term.

Indeed. Additional analysis and the complete documents, after the jump.

Ed. note: Above the Law has teamed up with Law Shucks, which has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.

This recession is turning out to have all of the unemployment and none of the rebound of the recession in the early 1980s. Unemployment is expected to average 10% through the first half of the year, which will stifle any recovery rooted in consumer spending or economic growth.

Still, technical signals indicate the recession is ending, as the US economy grew by 2.8% last quarter and is gaining at a 3% clip this quarter. That rate is also expected to continue through the first half. Fortunately for transactional lawyers, a cause (or effect, depending on whom you ask) for that moderate growth is that lending has started to loosen, which is allowing more deals to get funded. President Obama is also meeting with executives of 12 major banks to see how he can get them to increase lending to small businesses.

Unfortunately, the catalyst for recovery from that early 80s recession isn’t available anymore. Paul Volcker, Chairman of the Federal Reserve Board under Presidents Carter and Reagan, had raised the federal funds rate from 11.2% in 1979 to 20% in June 1981. As he started chopping the rate back down, recovery followed (albeit two years later). Through the first half of 1983, the economy grew by 7.2% and unemployment dropped over all of 1983 from 10.8% to 8.3%.

Bernanke doesn’t have that tool in his toolbox: the current target rate is 0.00-0.25%

Law firms continue to meander along behind the broader economy. After the jump, we highlight their economic efforts over the past week.