CA Employment Lawyers Saw Fourth-Quarter Surge

Employment lawyers across the San Francisco Bay Area are in awe of the ferocity of the economic slide, which for many has already translated into more work. Many Bay Area partners at firms big and small say their employment work really surged in the fourth quarter of 2008, and many expect the increase to continue.

Cases in Point

Billings at Littler Mendelson's 24-lawyer San Jose, CA, office were up 20% in November and 23% in December over the same months in 2007, according to Dennis Brown, managing partner of that office. That was slightly larger than the increase firmwide, he added. While no one's surprised by the effect the economy has had on employment lawyers, many, including Brown, said the depth and breadth of the downturn makes it stand out from previous ones.

Compared with the dot-com bust, which was largely limited to technology companies, this downturn is affecting almost all business sectors, Brown said.

Nixon Peabody's national employment practice head, Jeffrey Tanenbaum, said that he saw the downturn impact other regions of the country before it stormed into California. In past downturns, he said, he noticed a period of about six months to a year of increased layoffs. This time, however, seems different ' it has been going on for a year and is not abating.

In addition to layoffs and workforce restructuring, employers are asking about reductions in compensation and work schedules, pay freezes, job sharing and telecommuting. Tanenbaum said the billings coming in as a direct result of the downturn are significant, but it is hard to quantify.

Another cause of the increase in work is a flood of new laws and regulations expected to pass under the new administration. Clients are of course paying attention to the Employee Free Choice Act, which is expected to increase union organizing, but there are also possibilities related to paid leave and other laws.

'Cutting into Meat'

Roberta Hayashi, leader of Berliner Cohen's employment group, said that companies' dismal third-quarter results last year set her phone off on the first Monday in October. Three different employers called her on the same day. By the end of the week, she was working with four companies on worker reductions. What followed was a “very quick upsurge in advice and counsel work on layoffs,” she said.

Hayashi is now in discussions with partners at the 54-lawyer firm about hiring help. In the last few months, she has had to pull two associates from the real estate group and one from the corporate group to help the four-lawyer team handle an upswing in counseling and litigation. “We're starting to see filings of lawsuits from people who were let go in the middle part of last year and have not found other employment or comparable employment,” she said.

G. Daniel Newland, co-chair of Seyfarth Shaw's labor and employment group in San Francisco, said that compared with the last downturn, clients are seeking advice on more than trimming the fat. They are cutting into meat. Newland is representing a stock brokerage firm where the workers on the chopping block are quality employees or “keepers” that have been well regarded and even may have been promoted in the last 12 to 30 months. Unfortunately, the company can no longer afford them. During the dot-com bubble and burst, companies experienced a meteoric rise only to fall just as quickly. In this case, he said, “we're dealing with established, long-term companies and people who have had careers at these places.” It has been affecting golf courses, stock brokerages, law firms and upscale properties in the hospitality business.

Judith Keyes, a partner in the San Francisco office of Davis Wright Tremaine, said that her group is equally as busy as it was a year ago, but the focus of the work has shifted away from executive employment agreements and stock option plans, and concerns about trade secrets when an employee has decamped to another company. Now Keyes is helping clients in the entertainment industry ' such as Bay Area animation companies ' figure out how to hold on to highly skilled employees they can no longer afford but that they still want, while they wait for the next production contract to come along.

Petra Pasternak is a reporter for The Recorder, an Incisive Media sister publication of this newsletter in which this article originally appeared.

Employment lawyers across the San Francisco Bay Area are in awe of the ferocity of the economic slide, which for many has already translated into more work. Many Bay Area partners at firms big and small say their employment work really surged in the fourth quarter of 2008, and many expect the increase to continue.

Cases in Point

Billings at Littler Mendelson's 24-lawyer San Jose, CA, office were up 20% in November and 23% in December over the same months in 2007, according to Dennis Brown, managing partner of that office. That was slightly larger than the increase firmwide, he added. While no one's surprised by the effect the economy has had on employment lawyers, many, including Brown, said the depth and breadth of the downturn makes it stand out from previous ones.

Compared with the dot-com bust, which was largely limited to technology companies, this downturn is affecting almost all business sectors, Brown said.

Nixon Peabody's national employment practice head, Jeffrey Tanenbaum, said that he saw the downturn impact other regions of the country before it stormed into California. In past downturns, he said, he noticed a period of about six months to a year of increased layoffs. This time, however, seems different ' it has been going on for a year and is not abating.

In addition to layoffs and workforce restructuring, employers are asking about reductions in compensation and work schedules, pay freezes, job sharing and telecommuting. Tanenbaum said the billings coming in as a direct result of the downturn are significant, but it is hard to quantify.

Another cause of the increase in work is a flood of new laws and regulations expected to pass under the new administration. Clients are of course paying attention to the Employee Free Choice Act, which is expected to increase union organizing, but there are also possibilities related to paid leave and other laws.

'Cutting into Meat'

Roberta Hayashi, leader of Berliner Cohen's employment group, said that companies' dismal third-quarter results last year set her phone off on the first Monday in October. Three different employers called her on the same day. By the end of the week, she was working with four companies on worker reductions. What followed was a “very quick upsurge in advice and counsel work on layoffs,” she said.

Hayashi is now in discussions with partners at the 54-lawyer firm about hiring help. In the last few months, she has had to pull two associates from the real estate group and one from the corporate group to help the four-lawyer team handle an upswing in counseling and litigation. “We're starting to see filings of lawsuits from people who were let go in the middle part of last year and have not found other employment or comparable employment,” she said.

G. Daniel Newland, co-chair of Seyfarth Shaw's labor and employment group in San Francisco, said that compared with the last downturn, clients are seeking advice on more than trimming the fat. They are cutting into meat. Newland is representing a stock brokerage firm where the workers on the chopping block are quality employees or “keepers” that have been well regarded and even may have been promoted in the last 12 to 30 months. Unfortunately, the company can no longer afford them. During the dot-com bubble and burst, companies experienced a meteoric rise only to fall just as quickly. In this case, he said, “we're dealing with established, long-term companies and people who have had careers at these places.” It has been affecting golf courses, stock brokerages, law firms and upscale properties in the hospitality business.

Judith Keyes, a partner in the San Francisco office of Davis Wright Tremaine, said that her group is equally as busy as it was a year ago, but the focus of the work has shifted away from executive employment agreements and stock option plans, and concerns about trade secrets when an employee has decamped to another company. Now Keyes is helping clients in the entertainment industry ' such as Bay Area animation companies ' figure out how to hold on to highly skilled employees they can no longer afford but that they still want, while they wait for the next production contract to come along.

Petra Pasternak is a reporter for The Recorder, an Incisive Media sister publication of this newsletter in which this article originally appeared.