Attorney alums are fearful for the future

On Nov. 4, partners at 84-year-old San Francisco-based Thelen LLP voted to dissolve their company, two months after the similar collapse of another San Francisco firm, 118-year-old Heller Ehrman LLP. As the worsening economy takes its toll, attorneys said they fear that other firms will follow suit.

“The economy is in a meltdown and I and a lot of other people think that the other shoe hasn’t dropped yet,” Bruce Jenett ’69, a partner at DLA Piper US LLP, said. “I don’t think a lot of us know what size that shoe is and who it’s going to drop on.”

Jenett, a former partner and co-chair of Heller Ehrman’s life sciences practice, left the firm in February and watched from a distance as it disintegrated.

“I saw people leaving Heller Ehrman that I never thought in a million years I would see leave,” he said, adding that he believes the departure of many “longtime senior players” eventually crippled the firm.

Paul Downs ’74 was a partner at Heller Ehrman when he and his colleagues voted to dissolve the firm in September. He attributed the failure to an internal loss of confidence in the firm’s future after a series of settlements hit the firm simultaneously, leaving many lawyers with no work.

Since Heller Ehrman’s problems were internal, some said they thought it would have been possible to salvage the firm had harsh economic conditions not deterred potential acquirers.

“There were merger partners sought, [but] they were all sort of concerned,” Downs said. “There was considerable fear that the market for legal services was declining.”

After the firm failed to secure a merger, Downs explained, “there was really nothing left to do but vote for a dissolution.”

As for other law firms, Downs said, “I think you’re going to generally see cutbacks.” To what extent each firm will curtail its operations, though, may depend on its area of specialty, he explained.

“Firms who were heavily involved in markets [that are] going dead, like securitization, are already well into the process [of making cuts],” he said, noting that “firms that have more diversified practices won’t do any more than restrict hiring.”

White & Case LLP, which focuses on corporate and financial transactions, has already been hit. On Tuesday, the firm let go Peter Kimball ’98, an associate in the international trade group.

“The managing partners of the D.C. office came into my office and broke the news,” Kimball said in an e-mail. “My thoughts immediately turned to my one-year-old daughter, so I can’t recall specifically what he said, but he did indicate that the layoffs were not based on performance.”

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Kimball was one of 70 associates and roughly 100 staff members laid off by the firm last week.

Kimball said he is searching aggressively for a new job now because he believes “job-seeking will get harder once more firms make layoffs.”

“I think lawyers at every firm are more worried about job security right now than they have been in many years,” he added.

Neal Grenley ’69, a partner at White & Case, said the decision to lay off so many people was made to prepare for what the management felt would be a “pretty difficult economy for 2009.”

“We didn’t really look at people’s backgrounds, and we didn’t get into people’s situations. We’re very disappointed that this is the way it had to be,” he said. “The mood is definitely sober.”

While Grenley stressed that White & Case is “financially sound,” he added, “I think that the revelation here is that unfortunately, everybody, no matter what your profession, is vulnerable.”

The current economic climate has left the legal profession in unfamiliar territory, said Grenley, a 19-year veteran of the firm.

“It’s the first time in my memory when so many [law] firms were looking at numbers,” he said. “And I think it’s probably going to work its way through the system.”

That sentiment is hardly comforting for current law students, who are searching for jobs in a troubled profession.

“In recent years, pretty much everyone who gets a summer job at a firm between their [second and third] years gets an offer to return after they graduate,” said Matt Samberg ’06, a second-year law student at NYU.

This year, though, many law students are worried that permanent job offers will be more difficult to obtain, and partners at major law firms suggest that they are right.

“No one needs more associates,” Jenett said. “Most firms have a hiring freeze on them. They don’t have that much work.”

Downs noted that a lack of attrition accounts for many firms’ reluctance to hire new associates. “Law firms often hire to [replace] ... people who have left to go on to other things,” Downs explained. “People aren’t leaving to go on to other things these days.”

Even summer associate programs, which traditionally feed into full-time associate positions, may begin to feel the pinch.

“My gut tells me that summer law clerk programs may be severely curtailed or suspended until the economy straightens out,” Jenett said. “It’s only logical to think that that might happen.”

Though summer associates may have to “prove themselves a little more” to get a job offer, Grenley said that such programs are essential to his firm’s future.

“We have to keep cloning ourselves and that starts with the summer program,” he explained. “That’s our lifeline to new blood.”

Some of that new blood may be in search of more secure opportunities, however. Jennifer Kunz ’05, a third-year student at Fordham Law School, worked last summer at Heller Ehrman. She received a job offer only to learn in September that the firm had dissolved.

Kunz is looking for another job, ideally in corporate law, but said she is being “realistic [because] the market is so bad.” Kunz said she is trying to be flexible and is considering other areas, like government and nonprofit law. She is looking into smaller firms as well.

Kunz said many of her classmates are also feeling nervous about their job prospects in the weakened economy, noting that she believes there were fewer offers “given this summer than in past years.”

Even those students who had received offers are feeling the pressure, Kunz said. “Some firms were saying that they were not able to guarantee that their offers would be upheld.”

Still, she said, “the vast majority of [graduating law students] are finding jobs.”

Samberg, who has received an offer to work at a Boston law firm next summer, said he and his classmates are hopeful that the economy will have improved by the time they graduate. “It’s definitely something real that we’re aware of,” he said, but, he added, “we’re still pretty optimistic.”

Current University undergraduates are taking a longer-term perspective.

Pre-Law Society vice president David Tao ’10 said he anticipates a more competitive law school application process next year as more students seek refuge from the economy.

Downs predicted that in a few years, when the economy has improved, law firms will be hiring at higher rates than usual. “There may be a renewed need [for associates] because, after firms cut back on hiring for a few years, things might get busy, and they might really need to hire.”

“Now’s not a good time to be graduating law school, but it may be a good time to be enrolling in law school,” Downs said.

That’s good news for Tao, who plans to pursue corporate law, intellectual property law, contract law or international law. “Who knows?” he said. “A lot can change in a matter of four years.”

Still, the impact of the current economic climate will have a long-lasting influence on the way students and professionals think about practicing law.

“People thought of law firms as places where, once you got hired, as long as you didn’t shoot a client or anything, you had an assured position,” Downs said. “I think the sad truth is that now, you can’t even be sure that the law firm will be there.”