Do stealth layoffs typically get severance? Forum

[Anonymous User]

I am starting to get really worried about the possibility of layoffs later this year. I lateraled to a V10 two months ago and have billed a total of about 20 hours since I started at the new firm. There have been work days where I didn't even open my laptop at all because I have zero work and already watched a ton of training videos. The entire group is extremely slow, and it's free market, so I think partners are giving the little work to their regular associates who aren't busy, even though I've been regularly reaching out to ask for work. I signed up for some pro bono to fill time but that has also died down and rarely has work to be done for it.

I go out on bar prep leave soon, and am getting extremely worried about the possibility of getting stealth laid off, particularly if the market is the same or worse early this fall when I get back from leave.

Does anyone have a view as to how valid this concern is? With all this anxiety I've also been wondering if stealth layoffs typically come with severance, or if severance is reserved for rare occasions/special situations. I plan to try to build up my emergency fund some more regardless to help with anxiety, but wondering if any of you have some insight as to how concerned/prepared I should be.

[Anonymous User]

I am starting to get really worried about the possibility of layoffs later this year. I lateraled to a V10 two months ago and have billed a total of about 20 hours since I started at the new firm. There have been work days where I didn't even open my laptop at all because I have zero work and already watched a ton of training videos. The entire group is extremely slow, and it's free market, so I think partners are giving the little work to their regular associates who aren't busy, even though I've been regularly reaching out to ask for work. I signed up for some pro bono to fill time but that has also died down and rarely has work to be done for it.

I go out on bar prep leave soon, and am getting extremely worried about the possibility of getting stealth laid off, particularly if the market is the same or worse early this fall when I get back from leave.

Does anyone have a view as to how valid this concern is? With all this anxiety I've also been wondering if stealth layoffs typically come with severance, or if severance is reserved for rare occasions/special situations. I plan to try to build up my emergency fund some more regardless to help with anxiety, but wondering if any of you have some insight as to how concerned/prepared I should be.

Anytime an employee is involuntarily terminated, the firm will typically offer a severance in exchange for a release of claims. The firm wants to protect itself from any lawsuit you may bring against it.

[abogado2018]

For stealth layoffs, I've heard it's usually at least 3 months. For actual layoffs (e.g. 2008-9) it was anywhere from 2-5 months' severance.

[nealric]

It varies. More typical than a straight cash severance is providing some period of notice (though in practice most associates don't do much meaningful work after such notice of given). You have anywhere from between 2 weeks to an unspecified time to find a new gig. 2-3 months seems fairly standard.

The "traditional" way to get rid of an associate was simply to tell them at their performance review that they would be happier elsewhere and to offer the resources of the firm to assist in the search (sometimes even semi-directly arranging an in-house gig). There'd be no particular timeframe given, and it was understood the associate would be gone within the next few months, but not before they found something else. The great recession saw a variety of much harsher measures used, including some situations where associates were just shown the door without severance.

There's of course plenty of grey area between an associate that would have been terminated even in good times for poor performance, a trumped-up bad performance review for economic reasons, and a straight-up layoff where the firm terminates associates without regard to performance at all. Which bucket the termination falls in may impact how things are done.

[Anonymous User]

If someone has a high hours year (2500+), does that associate get more leeway for hours going way down.

At my V10 things are def starting to slow down. Enjoying it but hope things pick up during the summer.

[Anonymous User]

In my experience, you're escorted out of the building immediately and you remain on the payroll and website for 2 months or so.

So if you're let go today, your termination date will be July 29. If you're let go June 13, they may be nice and pay you until August 31.

[Anonymous User]

In my experience, you're escorted out of the building immediately and you remain on the payroll and website for 2 months or so.

So if you're let go today, your termination date will be July 29. If you're let go June 13, they may be nice and pay you until August 31.

Do you have to give back your firm t-shirts, etc.?

[Bramwell]

I am starting to get really worried about the possibility of layoffs later this year. I lateraled to a V10 two months ago and have billed a total of about 20 hours since I started at the new firm. There have been work days where I didn't even open my laptop at all because I have zero work and already watched a ton of training videos. The entire group is extremely slow, and it's free market, so I think partners are giving the little work to their regular associates who aren't busy, even though I've been regularly reaching out to ask for work. I signed up for some pro bono to fill time but that has also died down and rarely has work to be done for it.

I go out on bar prep leave soon, and am getting extremely worried about the possibility of getting stealth laid off, particularly if the market is the same or worse early this fall when I get back from leave.

Does anyone have a view as to how valid this concern is? With all this anxiety I've also been wondering if stealth layoffs typically come with severance, or if severance is reserved for rare occasions/special situations. I plan to try to build up my emergency fund some more regardless to help with anxiety, but wondering if any of you have some insight as to how concerned/prepared I should be.

sorry to hear this OP. What practice area are you in? Have you tried volunteering and getting in front of people in adjacent groups that might be able to loop you into projects? Are people in your group at your old firm similarly slow? I’ve seen plenty of boomerangs in recent months. Good luck.

[Anonymous User]

Firms are slow to react. They didn’t stop hiring until it was too late and now they have people with no work. My firm has had like 6-7 corporate associates start in the past month or so. Not sure if they’ll even last the year given how quickly it is starting to slow down.

Some of my friends are getting reassured that they won’t get fired, but one of my friends billed 25 hours last month. If the market doesn’t pick up, I can’t see the firm keeping a midlevel billing 25 hours for more than maybe a year.

[Monochromatic Oeuvre]

Someone can correct me if I'm wrong but in the past decade or so I haven't heard of many laterals being canned for low hours well within a year unless it was part of something bigger.

OP: You might get a "soft talk" at some point but I'd be very surprised if you were canned from a V10 before December, unless the market really takes a shit. It's much more common to have very low hours in your first ~3 months (especially at free market firms) than it is to face any real consequences over it. Sometimes takes much longer than that to get fully ramped up.

[Anonymous User]

What do people mean by "stealthed"? Fired but with website time? That happens all the time and is usually due to performance. Happened in my group, associate was given a soft talk, then about 3-4 months later with no improvement was give two weeks to wrap things up then another 2-3 months website time. Pretty generous tbh. No escorting out the door.

[Anonymous User]

This happened to me in August 2020, I was given 3 months but the firm really did want me to land on my feet and extended my time at the firm by another few weeks as I was finalizing getting an official offer from a position that had given me a soft offer. They were really nice about it all things considered. I had a bit of a crisis of confidence from this but have been doing great without the billable hour in my life.

[attorney589753]

Someone can correct me if I'm wrong but in the past decade or so I haven't heard of many laterals being canned for low hours well within a year unless it was part of something bigger.

OP: You might get a "soft talk" at some point but I'd be very surprised if you were canned from a V10 before December, unless the market really takes a shit. It's much more common to have very low hours in your first ~3 months (especially at free market firms) than it is to face any real consequences over it. Sometimes takes much longer than that to get fully ramped up.

I agree with this. I think most firms are going to take a slightly longer term view; even if you are overstaffed today, the market could come back this fall, or there could be more associate departures. By comparison, I was slow for my first 5 months at one firm but then got really busy after that. It's hard as a lateral because you are at the bottom of the pecking order — only way to work back up is for the market to pick up and do good work for people. Will there be some firm(s) that freak out and start to stealth at the earliest sign of slow down? Maybe, but I think that's a minority of places.

[Anonymous User]

I am starting to get really worried about the possibility of layoffs later this year. I lateraled to a V10 two months ago and have billed a total of about 20 hours since I started at the new firm. There have been work days where I didn't even open my laptop at all because I have zero work and already watched a ton of training videos. The entire group is extremely slow, and it's free market, so I think partners are giving the little work to their regular associates who aren't busy, even though I've been regularly reaching out to ask for work. I signed up for some pro bono to fill time but that has also died down and rarely has work to be done for it.

I go out on bar prep leave soon, and am getting extremely worried about the possibility of getting stealth laid off, particularly if the market is the same or worse early this fall when I get back from leave.

Does anyone have a view as to how valid this concern is? With all this anxiety I've also been wondering if stealth layoffs typically come with severance, or if severance is reserved for rare occasions/special situations. I plan to try to build up my emergency fund some more regardless to help with anxiety, but wondering if any of you have some insight as to how concerned/prepared I should be.

sorry to hear this OP. What practice area are you in? Have you tried volunteering and getting in front of people in adjacent groups that might be able to loop you into projects? Are people in your group at your old firm similarly slow? I’ve seen plenty of boomerangs in recent months. Good luck.

OP here, I'm in M&A. I haven't yet tried to get work from other groups but if it's similarly slow when I get back from bar leave I definitely will. I caught up with a mentor at my prior firm and she said they are slowing down too but there's still enough work to go around to stay fully occupied. Really regretting lateraling since I had built up a ton of goodwill that I'm sure would have carried me through a long slow period. Hoping if I ultimately do get the boot I'll be able to go back, but I mostly lateraled to switch geographic areas so it would involve another major geographic move.

Really appreciate everyone's insight. It sounds like if I do get laid off, I'll likely have a couple months of runway to figure something out.

[attorney589753]

What do people mean by "stealthed"? Fired but with website time? That happens all the time and is usually due to performance. Happened in my group, associate was given a soft talk, then about 3-4 months later with no improvement was give two weeks to wrap things up then another 2-3 months website time. Pretty generous tbh. No escorting out the door.

The way I've always understood "stealth" as described on TLS: A firm wants to do layoffs in order to reduce associate head count and save costs, however they know there is really bad publicity with "laying off" associates (especially if you just hired them as first-years or laterals), so they instead say there is a performance issue in a large percentages of performance reviews. It's really difficult for outsiders to confirm or deny because at most firms you will have a few people let go during performance reviews so the question is more whether there was a considerable uptick. I think people also generally find it objectionable that the firm is "lying" to the associate in the process by making it sound performance-related if, in fact, the issue is the firm overhired and partner profits are down. Because the firms are generally trying to keep it quiet, it does seem like folks get a reasonable amount of website time and severance time (few months) in these scenarios, although with the understanding that in exchange you won't make a lot of noise (because the firm wants it to be stealth).