Do you send form rejections for all the manuscripts rejected? Do you or the agent ever write personalized rejection letters?
It varies from agency to agency. One place I worked at had a letter that we would send back in the SASE. My current job involves writing a note on the bottom of the query letter itself and sending that back. You can argue amongst yourselves whether a full form letter or a personal form note in the assistant's handwriting but with the agent's name is best, but they mean the same thing: "No."
Agents have different standards. Some do personal replies after rejecting a partial request, or at least use a special "partial" form letter, but some agents only do a personal rejection after a full was requested. This is for the sake of time. That, and we actually like writers and want to let them down easy. "Thanks for submitting, but I don't think I'm right for this" sounds a lot nicer than the actual answer, which is usually, "Wow, that sucked." In other words, you don't want to know what we're really thinking. A writer myself, I am acutely aware that writers have insanely soft skins and will take every last word personally. I do it, you do it, everyone does it, because any writer, good or bad, pours their heart and soul into their manuscript. Rejection is a hard thing to take. I still struggle with getting rejected (which I do - when my material isn't good enough). It hurts. But it actually isn't personal; we just don't like your writing, and we want to let you down easy. That's what the form letter is for.
On occasion, I am allowed to personalize rejections with a P.S., if the rejection is just because the author hasn't done their homework and needs a push in the right direction. If the novel is below 60K, we might circle the word count and write "too short." If it's in a genre we don't represent, we might write, "P.S. We do not represent _____ fiction." It saves them the trouble of re-querying (which rarely works anyway) and tells them that they need to focus a bit more on the material they're putting out and whom they're sending it to. Despite the name of this blog, our overall goal is to help writers get published, or we wouldn't be working in this industry.
I will end this post with a story of one my hilarious mistakes that I was sure was going to get me fired. One day at the first agency I worked for, I opened a package that contained a whole folder full of material, from the query to the bio to a synopsis to a partial and a business card that matched the whole color scheme. This wasn't particularly unusual and generally means I get a brand new folder! Yay! So I sent our form rejection because the material was bad, and thought nothing of it. Then about a week later, my boss asks me, "Did you reject So-and-so?" Since I have no memory for names, she had to tell me that it was a blue binder and apparently this guy was an old friend of hers and he called her because he was pissed at his impersonal form rejection. As realization dawned, I noticed that we hadn't tossed the material in the trash yet (as he only sent an envelope with enough postage for a one-page SASE, meaning no return of his other materials). I produced it and argued my case - that he hasn't at any point anywhere in his folder mentioned once that he knew my boss. He just assumed she was going to see it and recognize his name. Unfortunately that's not the way agencies work, and I rejected it because it made no reference to the personal connection. Fortunately for my career, she understood and told him she still had the material, and it was all a misunderstanding. (By the way, the material was really bad and she rejected it, but she did it personally)
In other words: If you know the agent personally, please mention that in the opening letter. People lose their jobs over this sort of thing.