Reason Not to Go to Law School #38

Posted in Reasons Not to Go to Law School on March 11th, 2010 by bl1y

Your boss will sacrifice your career just to avoid the littlest of blips on their balance sheets.

In 2009, major law firms laid of 4,633 attorneys and 7,563 staff members.  This does not count smaller firms not covered in mainstream legal news, stealth layoffs, deferred start dates, and reduced offers.

Many of those people on whom the ax dropped had their lives turned completely topsy-turvy.    A lot of lawyers have been unable to find jobs, even after sending out many hundreds of applications.  Others have been forced to move back in with their parents, like yours truly, which often means leaving the state in which you’re admitted to practice, taking another bar, and spending a whole lot of time unqualified to practice while getting re-admitted.  Junior associates are particularly screwed.  They have less savings, and little valuable experience.  Firms go to law schools to look for junior associates.  It’s rare for firms to look for people with 0-2 years of experience.

Even people who have kept their jobs are seeing decreased salaries and disappearing bonuses.  With how hard associates were hit, you have to wonder how much bleeding there was at the partnership levels.  And as it turns out, not much at all.

According to a report from the Zeugheuser Group, gross revenues are down 3.8%, and profits per equity partner have dropped only 0.8%.

Now, like any other business, law firms are perfectly free to shed weight to increase or maintain profits.  However, the right to fire at-will employees does not entail the right to be free from criticism for making those decisions.

8 firms reported profits per equity partner of at least $2 million for 2009, with Quinn Emanuel taking the cake at a whopping $3.1 million.

[Edit: Really screwed the pooch on the math in this next part the first time around...]

To put these numbers in perspective, in a firm with $1.6 million in profits per equity partner, canning 1 first year associate saves 10 partners 1% of their profits.  Firms don’t publish a lot of information about the number of equity v. non-equity partners, but odds are firms are saving much less than 10% of profits.

Despite being in their rights to lay off associates, it’s pretty douchy to say to the highest cost bearer that they need to take a potentially 70, 80, or 90% cut in income, just so the equity partners will lose so little money they won’t even notice.

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Edit War: Bingham McCutchen, Fish & Richardson, and Wilmer Hale

Posted in Law Firm Edit War on February 5th, 2010 by bl1y

Today sees three new targets in the Law Firm Wikipedia Edit War, all thanks to what should be an embarrassing article from The Boston Globe.

Bingham McCutchen laid off associates, and then posted not only increased profits per partner (which can happen when you cut expenses), but also increased revenue.  How you cut staff while having an increased workload is beyond me.  Sounds like their clients are getting ripped off.

But, what makes Bingham’s actions particularly bad is that the firm chairman described 2009 as the “best year ever.”  Yeah, unless you were one of the people for whom it was the worst year ever.  Douche.

Fish & Richardson also conducted lay offs while posting an increase in profits.  Their managing partner had a little more tact and described the recession as “a painful year for everyone.”  Of course, it’s not nearly as painful if you’re one of the Fish partners.  They saw a staggering 20% increase to profits per partner.

And last, but certainly not least, Wilmer Hale…oh Wilmer Hale, you sick sons of bitches.  Wilmer Hale only posted a 7% increase in profits per partner, but the reason they’re going up on the ol’ wall of shame is lying to the press about layoffs.  In June 2009, AbovetheLaw.com reported stealth layoffs at Wilmer Hale.  Wilmer Hale denied that any layoffs had taken place, and even said none were planned or expected.  Then in July, just one month later, announced that layoffs had occurred.  And, then again in October.  What the Hale?

List of Wiki Raids:

Bingham McCutchen

Cadwalader

Curtis, Mallet-Prevost

Fish & Richardson

Latham

Morgan Lewis

Nixon Peabody

Paul, Weiss

Pillsbury

Wilmer Hale

Winstead

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Law Firm Edit War: Cadwalader

Posted in Law Firm Edit War on January 21st, 2010 by bl1y

In 2008 Cadwalader laid off 131 attorneys, including a number of first year associates.  While we can all understand that sometimes firms simply don’t have the ability to keep up their work force, Cadwalader went on to post a 28% increase in profits per partner.

In case you’re bad at maths, a 28% increase in profits is HUGE!  Many hundreds of thousands of dollars each.  The profits per partner increased by more than the average salary of the people they laid off.

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