A commenter asked about layoffs and whether they are generally less public than we have been seeing as of late. Sure, there always have been, and will be, "quiet" layoffs. There have always been and also will be "quiet" performance-based terminations. When the economy is difficult, firms tend to say goodbye to people more quickly than when things are busy busy and you need more bodies. I have seen plenty of mediocre or non-hardworking lawyers in law firms in prior years. Those people won't get to hang around as long in the current economy.
What used to happen when one is let go (assuming not "for cause") in BigLaw was the standard 3 month salary/winding down. The individual being let go may or may not continue to do work. Basically, the firm would pay the person, benefits continued, secretarial support, etc., but the person would generally focus on new employment finding. This wasn't horrible since the person could use the office/computer/phones etc and by outward appearances was just moving laterally. Typically the firm would want a settlement agreement and release. I know several people who have done these kind of arrangements, found new employment (other firms, in-house, etc) and moved on. I've also known people who are so shocked at getting terminated that they never really got over it. The bottom line is, in an economic situation, it is not your fault, and you need to do your best to move forward. If it was performance based, you should try to understand the issue; perhaps BigLaw or law firms in general are not your strong suit.
Someone asked if most people who leave firms are actually being let go. The answer is no. People leave for a wide variety of reasons, which is why there is such high attrition in law firms. Any of the following and others occur: move to different city for spouse job/self job/need to be closer to relatives; move in-house; move to government or non-profit organization; litigator who wants more trial experience and gets prosecutor-type job; person who moves to a boutique; person who just moves laterally; mom who decides to stay home with children; dad who decides to stay home with children (see, HP very PC); person who leaves law entirely for new field. Sure, some people are let go, but as I mentioned in the comments to a post, don't assume because someone is leaving that they had to, and don't gossip. It only ends up getting back to them and they get pissed and might even complain to management.
Remember, no one is indispensable. You can work hard to make yourself as valuable to the organization as you think you can/connect with big rainmaker/develop needed niche specialty/develop ton of own business etc., but there are many variables out there -- e.g., loss of huge client. We don't always have control over these things. The best things to do are to try to create a safety net through building relationships, developing a solid reputation, developing great substantive legal skills and getting out in the legal and business and social community so you are not wedded to one practice group/firm/partner. Remember no one looks out for YOU the way YOU need to. And, don't piss too many people off. People have long memories, and they are not apt to help (and can hurt) your career down the road when you need friends, not enemies.
Next post will try to address the questions raised regarding lateral movement