Firm Financial Standing

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Firm Financial Standing

Postby Anonymous User » Fri Jul 01, 2016 10:21 am

In preparation for a possible - read: likely - economic downturn, I want to figure out which firms would be most likely to hire and make offers to 2L SAs for next summer - 2017.

Is there a resource to determine firms' financial strengths? If so, did a firm's financial strength correlate to higher bid & offer rates during the last crash?

Also, is working at a firm's main office always better when cutbacks come, or could it be an advantage working in a market where the firm is moving up and establishing a more dominant presence?

barkschool

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Re: Firm Financial Standing

Postby barkschool » Fri Jul 01, 2016 10:26 am

We all thought Latham was bad ass, and then they fired associates in droves.

It's a black box.

AndroidLawyer

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Re: Firm Financial Standing

Postby AndroidLawyer » Fri Jul 01, 2016 10:33 am

I don't think firm's reaction to the last downturn should be the standard. The last recession was the worst since the Great Depression, so the next downturn may or may not be as bad. Firms will adjust based on the specific market conditions.

tyroneslothrop1

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Re: Firm Financial Standing

Postby tyroneslothrop1 » Fri Jul 01, 2016 11:52 am

Well as a general rule the more prestigious and profitable the firm the better it will weather a downturn. Cravath is unlikely to fire associates in droves whereas K&L Gates (semi-random pick) might. But really no way of knowing.

spyke123

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Re: Firm Financial Standing

Postby spyke123 » Fri Jul 01, 2016 12:19 pm

I actually think the way the firms reacted during the last downturn is a good indicator of how they will react in the next downturn. Its the boom and bust culture you want to avoid...

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Yea All Right

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Re: Firm Financial Standing

Postby Yea All Right » Fri Jul 01, 2016 1:21 pm

Would Latham do the same thing in another downturn? Yeah money is money but they looked really bad and people still remember it.

I'd imagine it can be hard for even associates to know about their firm's financials beyond the publicly available information, much less a law student. Best thing to do is probably to go for a firm that isn't obviously in trouble and hope for the best.

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Re: Firm Financial Standing

Postby bern victim » Fri Jul 01, 2016 1:26 pm

diversify and accept offers from 3 or 4 firms

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Re: Firm Financial Standing

Postby dabigchina » Fri Jul 01, 2016 1:30 pm

I'm just a law student but...
why does Latham get so much flak for downsizing during the downturn? From what I have heard, a lot of firms did stealth layoffs during that time.

Also, didn't Weil lay off a bunch of people in like 2012 or 2013 when the economy was doing much better? That honestly seems way worse than Latham.

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Re: Firm Financial Standing

Postby bk1 » Fri Jul 01, 2016 1:47 pm

Yea All Right wrote:Would Latham do the same thing in another downturn? Yeah money is money but they looked really bad and people still remember it.

Latham does not seem to have trouble finding top students to accept its offers. While it looked bad and is remembered by TLSers/ATL readers/etc (and probably somewhat affects their recruiting), I doubt they are that troubled by it.

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Re: Firm Financial Standing

Postby bk1 » Fri Jul 01, 2016 1:47 pm

bern victim wrote:diversify and accept offers from 3 or 4 firms

You gotta short the offer from the firm you think will Dewey itself.

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Re: Firm Financial Standing

Postby bk1 » Fri Jul 01, 2016 1:52 pm

dabigchina wrote:I'm just a law student but...
why does Latham get so much flak for downsizing during the downturn? From what I have heard, a lot of firms did stealth layoffs during that time.

Also, didn't Weil lay off a bunch of people in like 2012 or 2013 when the economy was doing much better? That honestly seems way worse than Latham.

See viewtopic.php?f=23&t=166517#p4782057 (and that thread generally, there have also been many discussions of this issue in the legal employment forum)

TLDR: Latham was often more egregious in overhiring during the boom which forced it to conduct more layoffs during the bust.

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Re: Firm Financial Standing

Postby PeanutsNJam » Fri Jul 01, 2016 2:01 pm

bk1 wrote:
Yea All Right wrote:Would Latham do the same thing in another downturn? Yeah money is money but they looked really bad and people still remember it.

Latham does not seem to have trouble finding top students to accept its offers. While it looked bad and is remembered by TLSers/ATL readers/etc (and probably somewhat affects their recruiting), I doubt they are that troubled by it.


Speaking only for myself, simply knowing Latham's layoff history, I'd pick any 180 firm over them in the same city solely because I don't want to be doing 3L OCI. I wouldn't be surprised if law students chose prestige over their own job security though.

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Re: Firm Financial Standing

Postby bk1 » Fri Jul 01, 2016 2:12 pm

PeanutsNJam wrote:Speaking only for myself, simply knowing Latham's layoff history, I'd pick any 180 firm over them in the same city solely because I don't want to be doing 3L OCI. I wouldn't be surprised if law students chose prestige over their own job security though.

That's a simplistic view though. Winston pays 180 and they no offered a bunch of summers just a few years ago.

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Tiago Splitter

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Re: Firm Financial Standing

Postby Tiago Splitter » Fri Jul 01, 2016 2:20 pm

PeanutsNJam wrote:
bk1 wrote:
Yea All Right wrote:Would Latham do the same thing in another downturn? Yeah money is money but they looked really bad and people still remember it.

Latham does not seem to have trouble finding top students to accept its offers. While it looked bad and is remembered by TLSers/ATL readers/etc (and probably somewhat affects their recruiting), I doubt they are that troubled by it.


Speaking only for myself, simply knowing Latham's layoff history, I'd pick any 180 firm over them in the same city solely because I don't want to be doing 3L OCI. I wouldn't be surprised if law students chose prestige over their own job security though.

I'm not sure no-offering summers is really a big thing at Latham. It's firing people a few months in that's the problem. Latham is known to have had fairly significant cuts after the 1990 and 2000 recessions as well, so it wasn't a one time thing.

As for the comparison to Weil or any other big firm, the key difference that makes Latham so much worse than everyone else was the mass shitcanning of first years. If you get stealthed out after 3-4 years you can find something. If you get fired after 3-4 months you're in a lot of trouble. To be fair to Latham, it's a bit of a mystery as to exactly how many first years were stealthed from peer firms, but people generally assume first years were much safer if they weren't at Latham.

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Monochromatic Oeuvre

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Re: Firm Financial Standing

Postby Monochromatic Oeuvre » Fri Jul 01, 2016 2:26 pm

OP: You have no way of knowing if a downturn is coming during your career, and you certainly are not gonna be able to anticipate when it's coming, so a method to protect yourself should be more general and less focused on 2017.

imalreadyamember?

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Re: Firm Financial Standing

Postby imalreadyamember? » Sat Jul 02, 2016 4:30 pm

Just be a bankruptcy attorney and you'll thrive in downturns yet you won't be let go in upswings because your firm won't be hurting financially. It's like playing the Don't Pass line in Craps. Everyone else is suffering and you're celebrating. Just don't do it loudly.

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Re: Firm Financial Standing

Postby Pomeranian » Sat Jul 02, 2016 4:37 pm

AndroidLawyer wrote:I don't think firm's reaction to the last downturn should be the standard. The last recession was the worst since the Great Depression, so the next downturn may or may not be as bad. Firms will adjust based on the specific market conditions.


The next crash may or may not happen by 2017, but thanks to the Federal Reserve, the next downturn is going to make 2008 seem like a fart joke.
Last edited by Pomeranian on Sat Jul 02, 2016 4:40 pm, edited 2 times in total.

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Re: Firm Financial Standing

Postby bern victim » Sat Jul 02, 2016 4:39 pm

Pomeranian wrote:
AndroidLawyer wrote:I don't think firm's reaction to the last downturn should be the standard. The last recession was the worst since the Great Depression, so the next downturn may or may not be as bad. Firms will adjust based on the specific market conditions.


Thanks to the Federal Reserve, the next economic downturn is going to make 2008 seem like a fart joke.

how much gold you got?

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Pomeranian

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Re: Firm Financial Standing

Postby Pomeranian » Sat Jul 02, 2016 4:41 pm

bern victim wrote:
Pomeranian wrote:
AndroidLawyer wrote:I don't think firm's reaction to the last downturn should be the standard. The last recession was the worst since the Great Depression, so the next downturn may or may not be as bad. Firms will adjust based on the specific market conditions.


Thanks to the Federal Reserve, the next economic downturn is going to make 2008 seem like a fart joke.

how much gold you got?


Gold is a good long term bet. In the shorter term, as long as the Fed keeps interest rates near zero and keeps printing billions in cheap money, stocks will keep going up (bubble anyone?)

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Monochromatic Oeuvre

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Re: Firm Financial Standing

Postby Monochromatic Oeuvre » Sat Jul 02, 2016 4:45 pm

Pomeranian wrote:
bern victim wrote:
Pomeranian wrote:
AndroidLawyer wrote:I don't think firm's reaction to the last downturn should be the standard. The last recession was the worst since the Great Depression, so the next downturn may or may not be as bad. Firms will adjust based on the specific market conditions.


Thanks to the Federal Reserve, the next economic downturn is going to make 2008 seem like a fart joke.

how much gold you got?


Gold is a good long term bet. In the shorter term, as long as the Fed keeps interest rates near zero and keeps printing billions in cheap money, stocks will keep going up (bubble anyone?)


If you were really this confident about the ease of picking the market, you wouldn't be in law.

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Pomeranian

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Re: Firm Financial Standing

Postby Pomeranian » Sat Jul 02, 2016 4:49 pm

Monochromatic Oeuvre wrote:
Pomeranian wrote:
bern victim wrote:
Pomeranian wrote:
AndroidLawyer wrote:I don't think firm's reaction to the last downturn should be the standard. The last recession was the worst since the Great Depression, so the next downturn may or may not be as bad. Firms will adjust based on the specific market conditions.


Thanks to the Federal Reserve, the next economic downturn is going to make 2008 seem like a fart joke.

how much gold you got?


Gold is a good long term bet. In the shorter term, as long as the Fed keeps interest rates near zero and keeps printing billions in cheap money, stocks will keep going up (bubble anyone?)


If you were really this confident about the ease of picking the market, you wouldn't be in law.


It's not just me who thinks this, far from it. People far more knowledgeable of the markets such as Carl Icahn and George Soros also think this as well. Thanks to the Federal Reserve, bubbles are everywhere, and when they finally burst the economy will go to hell in a hand basket!
Last edited by Pomeranian on Sat Jul 02, 2016 4:53 pm, edited 1 time in total.

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Re: Firm Financial Standing

Postby Effingham » Sat Jul 02, 2016 4:51 pm

Monochromatic Oeuvre wrote:
Pomeranian wrote:
bern victim wrote:
Pomeranian wrote:
AndroidLawyer wrote:I don't think firm's reaction to the last downturn should be the standard. The last recession was the worst since the Great Depression, so the next downturn may or may not be as bad. Firms will adjust based on the specific market conditions.


Thanks to the Federal Reserve, the next economic downturn is going to make 2008 seem like a fart joke.

how much gold you got?


Gold is a good long term bet. In the shorter term, as long as the Fed keeps interest rates near zero and keeps printing billions in cheap money, stocks will keep going up (bubble anyone?)


If you were really this confident about the ease of picking the market, you wouldn't be in law.


Seriously, fucking hate all the arm chair market experts in law.

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Re: Firm Financial Standing

Postby Effingham » Sat Jul 02, 2016 4:52 pm

Pomeranian wrote:
Monochromatic Oeuvre wrote:
Pomeranian wrote:
bern victim wrote:
Pomeranian wrote:
AndroidLawyer wrote:I don't think firm's reaction to the last downturn should be the standard. The last recession was the worst since the Great Depression, so the next downturn may or may not be as bad. Firms will adjust based on the specific market conditions.


Thanks to the Federal Reserve, the next economic downturn is going to make 2008 seem like a fart joke.

how much gold you got?


Gold is a good long term bet. In the shorter term, as long as the Fed keeps interest rates near zero and keeps printing billions in cheap money, stocks will keep going up (bubble anyone?)


If you were really this confident about the ease of picking the market, you wouldn't be in law.


It's not just me who thinks this, far from it. People far more knowledgeable of the markets such as Carl Icahn and George Soros also think this as well. Thanks to the Federal Reserve, the economy is going to hell in a hand basket and it won't be pretty!


Lollll, George Soros thinks the market is going to tank, not like he's famous for short positions or anything.

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Re: Firm Financial Standing

Postby SFSpartan » Sat Jul 02, 2016 5:02 pm

imalreadyamember? wrote:Just be a bankruptcy attorney and you'll thrive in downturns yet you won't be let go in upswings because your firm won't be hurting financially. It's like playing the Don't Pass line in Craps. Everyone else is suffering and you're celebrating. Just don't do it loudly.


This is not necessarily true. If a bankruptcy firm staffs up too much, some people are going to get laid off when the economy turns around. See e.g. Weil, 2012-13

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Re: Firm Financial Standing

Postby barkschool » Sat Jul 02, 2016 5:48 pm

Yea All Right wrote:Would Latham do the same thing in another downturn? Yeah money is money but they looked really bad and people still remember it.

I'd imagine it can be hard for even associates to know about their firm's financials beyond the publicly available information, much less a law student. Best thing to do is probably to go for a firm that isn't obviously in trouble and hope for the best.


Use your brain here. Do you think the inner circle who made these decisions got fired? The same people making high level decisions now, are the same ones who thought firing attorneys, and deleveraging their firm's balance sheet was better than an alternative to survive a few years of downturn.

On a completely unrelated note, and to armchair economist, even a bubble isn't anything that'll kill the economy for good. I think you'll see certain markets reduce in size, and that may hurt certain practice areas, industry specific groups. But, idk if it'll fuck everything up like 08-09.



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