Let's be realistic here, the OP is unlikely to get a job with a law firm in the current climate regardless of what her employers do or do not say about her and that situation is likely to persist for a number of years. There simply are few legal jobs out there. Therefore that threat is meaningless.
The fact that they have made the threat means they are running scared and they probably accept they are going to lose.
I echo this comment, the general lack of law firm jobs makes this threat pretty weak.