Answer: I am sorry to hear about this unfortunate news. This is probably not the best time for a corporate associate to be looking for a job, although it is not as bleak as some people are making it out to be. Let's try to make lemonade out of the lemons.
Before we get into what you should be telling prospective employers, we need to analyze what actually happened to you. First of all, did you have any inkling that you were going to be let go? How have you been doing at your firm? What have your reviews been like? Have you been receiving assignments up to this point? If not, have the other associates in your department been busy while you are not getting any new assignments?
You did not tell us anything about your firm: Is it a small boutique or a mega-firm? Are you the only associate in your department or are there many others? Were you the only associate who was laid off or did the firm do some serious pruning of the associate ranks? Are you eligible to be rehired should the deal stream start to build up again? All of those questions are critical in determining how to respond to prospective employers.
