Oh Sh!t
ATL is reporting that White and Case is conducting widespread layoffs.
Up to this point, layoffs had been covert or limited to less affluent firms (for the most part). The actions today by White and Case bring layoffs to the highest tier of law firms. I ask: have the floodgates been opened for all of the others?
Up to this point, layoffs had been covert or limited to less affluent firms (for the most part). The actions today by White and Case bring layoffs to the highest tier of law firms. I ask: have the floodgates been opened for all of the others?
Labels: OCIP/Employment
posted by tj at 1:10 PM
21 Comments:
No.
Yes.
Maybe.
White and Case is a TTT
I think that layoffs are generally focused on mid-level associates, who are (relatively) expensive and specialized. In contrast, recent law school grads are cheap and malleable. So current Boalties shouldn't start panicking.
(And without getting too snarky, "highest tier of law firms" may be a bit of a stretch, although I respect W&C and think it's a great firm. However, it's also massive at over 2000 lawyers, which might indicate a willingness to expand aggressively during good times and cut back during tougher times.)
Searching for some silver lining here... 3% doesn't seem all that bad. Some major companies (Yahoo) are laying off significantly larger percentages. Poor, poor percentages...
I agree with Dan; this is the time that we can all thank heavens that we are not Haas students.
Overall, it's a lot better to be a lawyer in times like this than to be a banker/entrepreneur/general business executive.
Shouldn't that be WhiTTTe and Case, 5:24?
5:24, go back to autoadmit, not welcome here.
White & Case are highest tier wannabes. Those are the first to get hit when the market ruptures. This is the beginning of a massive resizing of the legal services industry. Big law firms have modeled themselves to pursue global investment banking business. Fewer bankers, fewer lawyers needed.
Try to maintain some class and recognize that some of your peers (very smart ones if I might add) are going to this firm.
And if they have to make layoffs, I respect them for being open about it.
I think it is pretty offensive to only pay attention when one of the top 20 firms* layoff employees, and not others that Boalt students have been a part of etc.
Of course it is even worse to make stupid TTT comments about a firm that many Boalt students (not to mention the rest of the lawschool community) would love to work at.
Basically, I don't know about you guys, but I have been saying oh sh!t for awhile. W&C doesn't really change my opinion much.
*top 20 according to low-level associates. woohoo.
Anyone else not know what TTT means?
Using my Professor X-like ability to reason, I immediately deduced that wasn't used to refer to the (now defunct) Trinidad and Tobago Television network.
McWho, I think TJ's post is legitimate. Up until recently, the firms that have been laying off lawyers were either (a) poorly managed independently of the economy [Heller, etc.] or (b) highly specialized in particularly affected practices [Cadwalader].
TJ's point isn't that prestigious firms are more important, but that diversified, well-managed, and well-regarded firms are also considering staff reductions.
Toney, you can look up "TTT" on Urbandictionary.com. It's a derogatory term from obnoxious boards like Autoadmit, used to suggest that the given institution is "third tier" (per USNWR law school rankings). It's juvenile.
More news, this time on the New York Times: "Law Firms Feel Strain of Layoffs and Cutbacks." (http://www.nytimes.com/2008/11/12/business/12law.html)
"Lawyer departures, whether voluntary or through layoffs, pose special risks to firms. Layoffs scare off law school recruits, who crave security and wealth.
"“Students are also very much aware that ‘if they did that last year, it can happen to us again,’ ” said Mark Weber, assistant dean for career services at Harvard Law School. He said that this year, offers of employment are harder to come by and firms are hiring fewer interns for next summer."
i'm willing to bet it's the senior associates who are getting canned. how many of us really are intending to make it to our seventh year anyway?
Ah yes, but see you for some reason assume every firm below the t-20 benchmark is poorly managed. More importantly, you assume that one above that benchmark is WELL managed.
My point was merely that the vault list in general is a silly way to all of a sudden become alarmed. I personally was more alarmed that a firm IMPLODED than of some layoffs at W&C.
McWho--where exactly do I assume that every firm below the T-20 is poorly managed?
As several recent articles (e.g., http://www.law.com/jsp/tal/PubArticleTAL.jsp?id=1202425640209) demonstrate, Heller's collapse was not primarily due to the economy. It was a series of bad business decisions by Heller management, who lost the confidence of the firm's rainmaking shareholders (partners).
Likewise, Thelen collapsed because its massive merger in 2006 with Brown Raysman was a mistake. Three name partners left the firm in less than one year. In other words, these firm implosions are due to poor business decisions by management. They're not foreshadowing the future of the law firm industry.
And incidentally, the American Lawyer magazine listed W&C as one of the ten most efficient law firms, in terms of converting revenue to profits. (http://www.law.com/jsp/tal/PubArticleTAL.jsp?&id=1208947716644) So I'm not just saying that all Vault 20 firms are well managed. In fact, some of them are not.
Toney,
TTT stands for "toney, toni, tony."
Why do you take the parts of my argument that are not essential and choose to debate those while avoiding my main point?
My original and current view is that if you only cared once a 'prestigious' firm lays off several dozen associates (less than 3% of the total) and NOT when an entire firm goes under----one where numerous Boalt students had planned to work---then you suffer from a serious case of prestige-blinders.
Your Thelen/Heller argument is chicken/egg. The only reason that Thelen went under is because it is poorly run? Please. I'm quite sure that if we were not in a recession neither firm would have croaked.
McWho: first, I don't mean to sound callous to any Boalt person who has or intended to work at either firm. It's pretty traumatic for an employer to go under. And both Heller and Thelen had large California practices, so the impact on Boalt is larger than on other law schools.
At the same time, I'm not sure there's much point in debating the significance of Heller or Thelen, if you refuse to really address the reasons why either firm collapsed. It's not sufficient to say "Oh, it's the economy," since there are lots of trade journal articles describing the subject.
Strictly speaking, both firms collapsed when their lines of credit were withdrawn; this occurred when they breached covenants with their banks limiting partner attrition. In turn, partners left each firm because (a) they had lost confidence in the management, (b) the firms' profitability decreased as rainmakers left, and (c) it's better to leave before dissolution than afterwards.
You don't need to take my word for it. Read this interview with Thelen's former chairman: http://www.abajournal.com/news/thelens_former_chair_no_firm_has_to_fail/
I'm not arguing that the economy is irrelevant. During booming times there's often enough work to go around, no matter how badly a firm is run. But to say that it's all due to the economy is misleading.
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