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Weil Gotshal will lay off 60 associates, 110 support staffers; will other firms follow suit?

Jun 24, 2013, 10:32 am CDT

Comments

Round 2, commence.

By associate on 2013 06 24, 11:49 pm CDT

More castaways consigned to grim disaster.  Bad enough to be sacked, without some jerk spewing a bunch of moronic buzzspeak about “the new normal.”  Now surviving associates and staff will be hiding under their desks when they hear Wolf at the door.

All is well!

By B. McLeod on 2013 06 25, 12:46 am CDT

The excess capacity most AMLAW 250 firms carry is going to get squeezed out, one way or the other. 

I feel badly for these associates.  The stigma of being laid off from a large firm will make them untouchable to other large firms, even though it shouldn’t.  Bankers and traders get hired/fired/rehired with abandon, without the same degree of stigma.

By Guest on 2013 06 25, 8:26 am CDT

Hmmm, now maybe those people will feel the pinch that the employees of bankrupted companies felt.  Too bad, I call it karma.

By embo on 2013 06 26, 11:19 am CDT

The article in this journal fails to note a crucial fact to put the topic in perspective: $2.1 mil per partner. Thus on a rough estimate 10% or so of the firm must lose their jobs so that the remaining partners do not see their ppp eroded to $1.9 mil on average. 

This is a great example of the corrporatization of a large segment of the profession or perhaps a better noun, the industry. How could the Journal have omitted this crucial fact, I ask as a former partner at one of these corporate firms & a law prof for the past decade and a half!

By Donald Joseph on 2013 06 28, 5:54 am CDT

Great point @Donald Joseph. The industry model needs to be revisted when you have to lay off people making $100K to allow those making 20x that amount to continue to make their cake.

By $2.1 doesnt go as far as it used to on 2013 06 28, 6:10 am CDT

Great point @Donald Joseph. The industry model needs to be revisted when you have to lay off people making $100K to allow those making 20x that amount to continue to make their cake.

By $2.1 doesnt go as far as it used to on 2013 06 28, 6:10 am CDT

Oh no!!  People lost their jobs to preserve PPP?  You do know what law firms are, right?

How funny.

By B. McLeod on 2013 06 28, 7:28 am CDT

I agree with Don Joseph, but would go even further.  If law firms, large and small, want to survive over the long term, they have to bring in and nurture talent—even if it means making not quite so much money (and $2.1 million on average ain’t starvation wages, not even in this town).  This issue goes far beyond Weil, but really is about the choices those managing law firms and their voting partners are making about the future of the profession.  Assuming there is a “new normal,” we have to adapt to it, and the current strategy—keeping Profits Per Partner numbers up by limiting hiring and culling associates—is not a long term solution.  Just witness the drop in law firm enrollment, and the deep dissatisfaction among recent law firm graduates.  They have committed a great deal of time and money to the profession, and they deserve better.

By Ron Minkoff on 2013 06 28, 7:33 am CDT

Ron, it IS a long term solution.  Get new hires, burn them out, get some more.  It’s not that complicated.  There’s an endless stream of people willing to do the work.  The trick is just keeping ownership of the work and keeping your minions invisible from the ones doling out the work.

By associate on 2013 06 28, 7:41 am CDT

4, emdo, FYI, bankruptcy lawyers step in to restructure a business AFTER it is bankrupt.  Your societally approved hatred for all lawyers is duly noted, but expressing it here just makes you look dumb.

By associate on 2013 06 28, 7:43 am CDT

WANTED: ERISA-knowledgeable BigLaw rejects willing to work long hours on hard-to-win litigation   for real, living, breathing clients who will really appreciate you and your efforts. Caveats: (1) You eat only what you kill, but (2) you will never be laid off again. Welcome to my world. Call me.

By Elawyer on 2013 06 28, 8:11 am CDT

#6 As those well known socio-industrial critics, Pink Floyd, sang: “Welcome to the Machine…”

By greyghost on 2013 06 28, 8:18 am CDT

I left a larger firm about 6 months ago and went solo.  After 25 years of practice, some of which was spent with the largest firm in the state, I find the life of a solo practitioner very refreshing, and financially rewarding.  My overhead went to about 1/3 of what it had been, I no longer split my revenues with lazy partners, and I can take on many more matters that I am interested in.

By BhamJim on 2013 06 28, 8:32 am CDT

It amazes me that lawyers, who are mostly an intelligent bunch, seem to be so slow when it comes to simple economics.  Now that the big fish clients have really reigned in those seemingly unlimited budgets for legal services, the big law firms that have fed off of those budgets are going to start starving.  And of course the decision makers (senior partners) are going to protect their wallets first.  And yet there’s only a slight downturn with people heading to law school… go figure.

By StillStanding on 2013 06 28, 8:33 am CDT

Nothing wrong with what Weil is doing.

The bottom line is that technology has reduced the need for armies of associates. Computers can now do much of the first level document review, and contract attorneys can do the second level. Soon computers will be able to do most of the review. After all, if Watson can beat humans at Jeopardy, why can’t Watson review your documents? And Watson will do a better job that the associate who believes that work is beneath him.

It’s sad, of course, when anyone loses their job. But when you can substitute capital for labor, why wouldn’t you?

By American of African Descent on 2013 06 28, 10:10 am CDT

Well, all I can say is I hope these associates managed to gain some practical experience in their however many years at Biglaw.. Something beyond 18 billable hours of document review and motion writing per day.. Best of luck to ye.. Unless you come lookin’ for my job.

By You call this coffee!? on 2013 06 28, 10:27 am CDT

So Weil is just now realizing there is a “new normal”  Didn’t the rest of the world come to this conclusion sometime around the end of 2009?  In any event, this does not bode well for the world of BIG LAW, if the comments of no debt are accurate.  Lots of other firms are levered up again, and with rates climbing, it will only be a matter of time before implosions start happening again.

In response to a comment above, yes, lawyers are (on the whole) pretty smart, but (on the whole) really bad at business.

By Did we go back in time?? on 2013 06 28, 11:58 am CDT

Young associates.  You are blessed.  Get out of this business while you are still young.  Produce something.  Be something.  Dont make the mistake that we old buzzards did sticking in this rancid profession.

By Justpassingby on 2013 06 28, 12:07 pm CDT

@19: yeah, it’s easy to say that after you’ve already made your money in law.  Why didn’t you produce something when you were young? Probably too risk-averse, like all lawyers.

By Joe on 2013 06 28, 12:29 pm CDT

I wonder?  What would happen if someone took a bunch of these fired NY-admitted attys. and started a transactional law firm in a state with no income tax?  You would have an office in some near downtown urban location for less than $30/ft., and your billable rates would be half of the “premier law firms”.  You would fight like heck to avoid going into NY State, and most services would be provided over the internet.  Could you avoid paying NY and NYC taxes and still be a NY law firm?  Your attys. would make half of what they made in NYC, but they would have houses with yards and closets the size of their NYC apartments.  Would it work?

By Inquiring Mind on 2013 06 28, 12:31 pm CDT

Boo-hoo, let me play my tiny violin for those poor downtrodden BigLaw Associates only making >$200K per year.  They may suffer PTSD for the rest of the month of June from this terrible event.

By Benjamin Dover on 2013 06 28, 2:01 pm CDT

I just applied for a position as a patent lawyer with a background in Electrical Engineering.  They asked how much I wanted as entry-level and I said $49,000/yr.  Still too high.  I would actually work for free, but my landlord says no.

By LawLOL on 2013 06 29, 12:17 pm CDT

Ron,
I disagree with your one point:  “the current strategy—keeping Profits Per Partner numbers up by limiting hiring and culling associates—is not a long term solution.” As already noted, in a more graphic way, BigLaw will be able to continue just as big pharma and big accounting firms continue.  That it will be a desirable place to work is another question, already answered by the many who forego the large salaries and impossible-to—have-a-life hours that are required. 

But your basic point needs emphasis: such demanding circumstances of employment are not good for the profession as a whole:  they make it much more difficult to follow the ideals that make ours a profession “a representative of clients, [but also] an officer of the court and a public citizen” as the ABA states or a group “pursuing a learned art. . . .  in the spirit of public service no less so [because it is] a means of livelihood.” in Roscoe Pound’s words.

And one correction to another comment in this thread of a” slight downturn with people heading to law school.”  The facts are different: “applicants to law schools for [in the fall 2012 show], a 20 percent decrease from the same time last year and a 38 percent decline from 2010.“quoted from a NYTimes article last fall.  This will lead to substantial contraction in the sizes of law schools.

The issues Weil raises are not about sorrow for educated people who lose highly paid jobs and are likely to find other ones no doubt not paying as much - though for the well paid as well as the not so well paid, loss of a job is often traumatic.  The real issues are what kind of profession we want to be,  what kind does the society want, individually how we want to practice law, the quality of justice we want in this country, and the resources we want to provide for the quality we want.

Donald K. Joseph | Visiting Associate Professor              
217 N. Fifth Street | Camden, NJ 08102-1203
donaldkjoseph@gmail.com | dojoseph@camden.rutgers.edu

By Donald Joseph on 2013 06 30, 11:29 am CDT

Good luck to those feeling the axe at W&G - my heart goes out to you all, attorneys and staff alike. 
But consider this a blessing in disguise as you focus on your next job.  If you chase money, you will always be disappointed.  Search instead for those jobs in which you will develop tangible experience in the field of your choice.  The measure for attorney success is not money, but EXPERIENCE.

By The REAL voice of reason on 2013 07 01, 3:42 pm CDT

I find it interesting this type of conduct is somehow newsworthy. I remember Kelley Drye laying off 40 associates at one conference room sitting, on a fine summer Friday afternoon in the early 90’s , because of just such a “downturn”. The game is the same folks;  same as Amway or any other pyramid scheme. Nothing new here- except maybe the disingenuous double speak from the bloated management is a little slicker- “the new normal”  and “position of strength” smell like PR firm talk, which the industry hadn’t tumbled to yet in the 90’s. .

Small or solo is the way to go if you are going to stay in the profession- which is another topic altogether.

By George M. on 2013 07 01, 3:44 pm CDT

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