While I agree with the gist of seriouslyinformative's comments, I think he's making things seem more black-and-white than they are. Laying off tons of first years may or may not be a good thing for partners.
Modern law firms make big profits through high leverage. While partners may not care about any specific associate, they care about associates in general, because without that 3-4x leverage ratio, they could not sustain $2m+ PPPs. That's why they pay $160k and bonuses and wine and dine SAs. Not out of the goodness of their hearts, not for prestige, but because in a good economy attrition is a constant worry. Summer class size, salaries, and bonus are in equilibrium with attrition. They're set at the point where if the firm was to cut expenses by reducing summer class sizes any further their attrition would go up and they would incur more expenses in retaining associates in order to maintain their leverage ratio.
So what happens when work dries up? Firms can either keep around a bunch of associates not working at maximum capacity (which has a cost), or they can fire them and try their hand at the lateral market down the line (which also has a cost). Some firms did the former. If you look at the NALP sheets for say S&C, you'll see that their leverage ratio ballooned during the recession. That certainly cut into profits for those couple of years. Their gamble was that the hit in profits would be smaller than what it would cost to play in the lateral market down the line when the economy picked back up. Other firms did the latter. Latham's leverage went way down during the recession. Now who knows which option was best for which firm, but let's not pretend the latter option is without cost. Latham is recruiting like anything right now. Here at NU they might be one-third to one-half the interview slots for all of 3L OCI. Between recruiting expenses and not being able to take advantage of available work, that's definitely impacting their bottom line.
As for working for Latham, I wouldn't necessarily turn down a Latham offer. They do top-notch work and have some extremely interesting clients. But also be cognizant of the fact that law firms are not all managed identically. Some are run more conservatively (like Gibson), some are run more aggressively (like Latham). Latham increased their leverage out of line with their peers during the boom, and paid for it during the bust. That risk-taking may or may not pay off for partners, but given that bonus amounts are largely uniform throughout the industry, it probably doesn't make sense for associates. If I had a Gibson offer in hand and a Latham offer, I'd certainly take the former.