Should incoming CWT associates be concerned?

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Should incoming CWT associates be concerned?

Postby Anonymous User » Sun Feb 21, 2016 7:52 am

http://www.law360.com/articles/756321/c ... n-slowdown

If so, both lit and transactional or just lit?

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Re: Should incoming CWT associates be concerned?

Postby Anonymous User » Tue Feb 23, 2016 1:16 am

I mean, just read a bit further in the article:

The decline in revenue in Cadwalader's litigation department is in line with industrywide trends, but the firm's corporate department, on the contrary, has experienced a 32 percent increase in revenue, a spokeswoman for the firm confirmed.

Total revenue in the law firm's transactional practices - corporate, capital markets, antitrust, finance, financial services and tax - was up 16 percent from 2014, the firm said.


Of course you can't take anything for granted (2008 still looms large), but there are still only a handful of firms churning out $2M PPP and $1M RPL. So the bottom line here is that Cadwalader is a bit less spectacularly profitable than usual. But relative to the NLJ 250 writ large, it's still printing the stuff.

So the "should I be concerned" line might beg the question "concerned about what?" Somewhat greater incentive for partner defections? Maybe. In such a highly-leveraged firm, that's not great. But unless you're Quinn Emanuel, litigation is sagging far and wide, so it's not everybody else is on a hiring spree to mop up that talent. Capital markets are as busy as ever, that's still a CWT bread-and-butter moneymaker. And all these practices are cyclical, so it's really a puerile online exercise to act like we know where the market for M&A gurus or litigators will be in three years.

In the end, use some common sense to decide if 3.7% sounds like doom and gloom. Maybe the folks at Bingham were saying the same thing, but as far as I can tell, it sounds like 3.7%. Meh.

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Re: Should incoming CWT associates be concerned?

Postby smaug » Tue Feb 23, 2016 1:25 am

Incoming associates at most firms should be a little concerned.

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Re: Should incoming CWT associates be concerned?

Postby Johann » Tue Feb 23, 2016 1:29 am

smaug wrote:Incoming associates at most firms should be a little concerned.

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Re: Should incoming CWT associates be concerned?

Postby nextstep2016 » Tue Feb 23, 2016 2:28 am

Anonymous User wrote:I mean, just read a bit further in the article:

The decline in revenue in Cadwalader's litigation department is in line with industrywide trends, but the firm's corporate department, on the contrary, has experienced a 32 percent increase in revenue, a spokeswoman for the firm confirmed.

Total revenue in the law firm's transactional practices - corporate, capital markets, antitrust, finance, financial services and tax - was up 16 percent from 2014, the firm said.


Of course you can't take anything for granted (2008 still looms large), but there are still only a handful of firms churning out $2M PPP and $1M RPL. So the bottom line here is that Cadwalader is a bit less spectacularly profitable than usual. But relative to the NLJ 250 writ large, it's still printing the stuff.

So the "should I be concerned" line might beg the question "concerned about what?" Somewhat greater incentive for partner defections? Maybe. In such a highly-leveraged firm, that's not great. But unless you're Quinn Emanuel, litigation is sagging far and wide, so it's not everybody else is on a hiring spree to mop up that talent. Capital markets are as busy as ever, that's still a CWT bread-and-butter moneymaker. And all these practices are cyclical, so it's really a puerile online exercise to act like we know where the market for M&A gurus or litigators will be in three years.

In the end, use some common sense to decide if 3.7% sounds like doom and gloom. Maybe the folks at Bingham were saying the same thing, but as far as I can tell, it sounds like 3.7%. Meh.


Capital markets are as busy as ever? I'm too lazy to dig up that lolwut pear meme....but yeah LOLWUT? High yield is dead. IPOs are not doing great. I'm curious where you are getting the impression that cap mkts is hot? Shows you how quickly things can change though because when I was a first year, only a few years ago, we were absolutely slammed in cap mkts.

I don't know how that info is useful to incoming associates....it would just be reading tea leaves. If this year continues to be slow generally then you don't have much hope of trying to get hired by another firm so you may as well forget about it, enjoy your last few months of freedom, go on a great bar trip on CWT advance and see how it goes next year. If you're really worried you could try calling up other firms you got offers from to see if they still have openings but I wouldn't do that at this point.

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Re: Should incoming CWT associates be concerned?

Postby TLSModBot » Tue Feb 23, 2016 9:11 am

CWT profits margins have been dropping, and well below Biglaw average (pre-recession they used to be just at the average of 35-36% - now they're at 26% and falling). They're also down lawyers and partners since the recession (although the partner decline is very small, so people aren't jumping ship en masse quite yet).

So long as CWT can tread water and keep its partners on board, the firm will at least stay afloat for a couple years. If a significant rainmaker or more leave, then there might be trouble. It's PPP isn't terrible and there are a number of tricks firms can employ to artificially boost it (and it doesn't seem like Cadwalader has resorted to most of them yet), so any boost might be enough to keep people on board or to attract other talent to replace departing partners.

It's not a great position, but they're not definitely going to sink.

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Re: Should incoming CWT associates be concerned?

Postby Monochromatic Oeuvre » Tue Feb 23, 2016 10:32 am

These threads are always dumb.

Either way your best bet is trying and be halfway decent at your job without killing yourself. You're not going anywhere else anyway, so stop reading tea leaves.

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Re: Should incoming CWT associates be concerned?

Postby TLSModBot » Tue Feb 23, 2016 10:56 am

Monochromatic Oeuvre wrote:These threads are always dumb.

Either way your best bet is trying and be halfway decent at your job without killing yourself. You're not going anywhere else anyway, so stop reading tea leaves.
Yeah but for the people going into OCI this summer it's good to have as much info and perspective as possible.

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Re: Should incoming CWT associates be concerned?

Postby Anonymous User » Tue Feb 23, 2016 1:36 pm

Capitol_Idea wrote:
Monochromatic Oeuvre wrote:These threads are always dumb.

Either way your best bet is trying and be halfway decent at your job without killing yourself. You're not going anywhere else anyway, so stop reading tea leaves.
Yeah but for the people going into OCI this summer it's good to have as much info and perspective as possible.


FWIW, I work in Capital Markets and there is probably going to be a slow down this year, at least with respect to asset-backed securitizations. That said, it's largely related to spreads blowing out right now and loan origination slowing down... Either way, the latter half of year is slated to be busy as normal assuming the banks don't freak out over risk retention.

I do agree with Monochromatic though... The economy in general is pulling back right now and I wouldn't be surprised if we have a recession on paper later this year. Again though, that said, I think most firms have been more cautious post-recession with hiring numbers and going slow enough not to risk major layoffs again. Remember, 2008 was terrible... Historically speaking, a job in Biglaw has been a relatively secure career path (at least for the first couple of years)...

Lastly, and correct me if I'm wrong, but isn't Capitol_Idea still in law school? I.e., why are you commenting on the state of a practice when you aren't actually plugged in to anything yet? Even if you summered at CWT, I don't think you're going to be in the loop enough to comment on how busy various practices are.

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Re: Should incoming CWT associates be concerned?

Postby BigZuck » Tue Feb 23, 2016 1:48 pm

Anonymous User wrote:
Capitol_Idea wrote:
Monochromatic Oeuvre wrote:These threads are always dumb.

Either way your best bet is trying and be halfway decent at your job without killing yourself. You're not going anywhere else anyway, so stop reading tea leaves.
Yeah but for the people going into OCI this summer it's good to have as much info and perspective as possible.


FWIW, I work in Capital Markets and there is probably going to be a slow down this year, at least with respect to asset-backed securitizations. That said, it's largely related to spreads blowing out right now and loan origination slowing down... Either way, the latter half of year is slated to be busy as normal assuming the banks don't freak out over risk retention.

I do agree with Monochromatic though... The economy in general is pulling back right now and I wouldn't be surprised if we have a recession on paper later this year. Again though, that said, I think most firms have been more cautious post-recession with hiring numbers and going slow enough not to risk major layoffs again. Remember, 2008 was terrible... Historically speaking, a job in Biglaw has been a relatively secure career path (at least for the first couple of years)...

Lastly, and correct me if I'm wrong, but isn't Capitol_Idea still in law school? I.e., why are you commenting on the state of a practice when you aren't actually plugged in to anything yet? Even if you summered at CWT, I don't think you're going to be in the loop enough to comment on how busy various practices are.

He's writing a paper

And Mono is like a 17 year old K-JD

And you're probably a stub

I just assume no one knows what they are talking about and proceed through life that way.

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Re: Should incoming CWT associates be concerned?

Postby TLSModBot » Tue Feb 23, 2016 1:53 pm

I'm a 3L so I'm not "plugged into" any firm very specifically but frankly even many partners are kept in the dark about the state of affairs of their firm so literally no one on this site is on any kind of inside loop (the first 50 pages or so of "The Failing Law Firm" by David Parnell has some really good stuff on how law firm management keeps the books looking good up until the end - that being said, it's hard for an outsider to tell if anyone is playing with the books in a law firm and we don't really have any of the external indicators that might suggest CWT is doing so).

The numbers I was quoting above are all verifiable stats straight from AmLaw (and aren't mentioned in a vacuum - I'm comparing to the other AmLaw 200 firms when I say "good" or bad"). Maybe CWT is just gonna have a slamming year and pick up some new business or acquire a great rainmaker who showers everyone with wealth and reinvigorates the firm. Seriously it could happen.

But more seriously, CWT has had some noticeable trends in the available metrics that aren't great, and while so much of this is unpredictable or subject to change with specific sudden events like partner acquisition/defection, the numbers are the best we've got short of someone from top management at the firm opining ITT.

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Re: Should incoming CWT associates be concerned?

Postby Monochromatic Oeuvre » Tue Feb 23, 2016 2:35 pm

Capitol_Idea wrote:
Monochromatic Oeuvre wrote:These threads are always dumb.

Either way your best bet is trying and be halfway decent at your job without killing yourself. You're not going anywhere else anyway, so stop reading tea leaves.
Yeah but for the people going into OCI this summer it's good to have as much info and perspective as possible.


True. But the CW has always been that Cadwalader is a terrible place to work and is, for the most part, to be avoided if possible. I have no idea if that's true. But any potential "concerns" wouldn't change that. On the list of "firms that might not exist in three years," CWT probably wouldn't crack the top ten anyway.

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Re: Should incoming CWT associates be concerned?

Postby krads153 » Tue Feb 23, 2016 2:50 pm

I don't think just CWT associates should be concerned. Transactional work is down at a bunch of firms - rumor is that a few firms will be stealth laying off more people this year.....

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Re: Should incoming CWT associates be concerned?

Postby krads153 » Tue Feb 23, 2016 2:51 pm

smaug wrote:Incoming associates at most firms should be a little concerned.


I don't think firms would generally fire first years, but second years are fair game.

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Re: Should incoming CWT associates be concerned?

Postby BigZuck » Tue Feb 23, 2016 3:11 pm

krads153 wrote:
smaug wrote:Incoming associates at most firms should be a little concerned.


I don't think firms would generally fire first years, but second years are fair game.

I see what you did there

Well played

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Re: Should incoming CWT associates be concerned?

Postby Aeon » Tue Feb 23, 2016 4:28 pm

Capitol_Idea wrote:I'm a 3L so I'm not "plugged into" any firm very specifically but frankly even many partners are kept in the dark about the state of affairs of their firm so literally no one on this site is on any kind of inside loop.


This is accurate. I've been out of law school for several years and can confirm that whatever BigLaw associates are able to infer about their firms' financial health is based on whether there is a sufficient observable flow of work and any idle gossip they may chance upon. That's pretty much it, and I think we can all agree that you can't get a good picture of fiscal information based on such sparse data.

And for what it's worth, from what I've seen, Capitol is more knowledgeable about these things than many of us in the trenches.

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