Layoff Predictions Forum

[Dcc617]

I think this is also the "fuck old boomer partners who are laying people off because of this bullshit system and their bullshit president" thread.

[Anonymous User]

Let's not derail thread. Running list of disclosed Amlaw 100 layoffs to date:

1. [Unnamed]: Associates in DC office of a non-DC HQ firm. Years 1-4 mostly.
2. Womble Bond Dickinson: associate layoffs, with a 10% salary cut for those remaining.

[cantdecide]

Any indication of whether certain practice groups are more insulated from layoffs generally in situations like this? Should a corporate associate be more worried than a litigation/employment/bankruptcy associate, since it seems like there's upticks in demand for those areas at the moment?

[nealric]

Back on topic - I don’t see the logic of paycuts. When the economy bounces back, won’t those associates be pissed and jump ship? Aside from finances, the main thing that motivates loyalty is loyalty.

There were paycuts at some firms during the great recession. Some firms that did them did a true up afterwards to restore the lost pay in order to reduce the hard feelings. I'd take paycuts over layoffs if I had a choice.

[nealric]

Any indication of whether certain practice groups are more insulated from layoffs generally in situations like this? Should a corporate associate be more worried than a litigation/employment/bankruptcy associate, since it seems like there's upticks in demand for those areas at the moment?

Associates in slow practice groups are almost certainly more likely to get the laid off than busy. Firms are going to be looking at hours and collections very closely to try to figure out who is profitable and who isn't.

Can confirm that employment is slammed (spouse is an employment lawyer). I'm sure bankruptcy will start getting crazy soon if it hasn't already. Associates in slower groups may be able to help busy groups to some extent. There's a decent amount of corporate/bankruptcy crossover, for example. Anything that associates can do to get their hours up and demonstrate value will help them stick around through the downturn.

[QContinuum]

Any indication of whether certain practice groups are more insulated from layoffs generally in situations like this? Should a corporate associate be more worried than a litigation/employment/bankruptcy associate, since it seems like there's upticks in demand for those areas at the moment?

I would be hesitant to assume litigation's safe. Litigation tends to decrease during any economic downturn, and especially now with courts granting extensions left and right, and state courts shutting down.

That said, across corp. and lit, cap markets is probably the single riskiest group, as their work tends to be the first to dry up when the economy goes south. M&A is also somewhat risky. Bankruptcy and employment are probably the 'safest', along with tax and transactional IP.

[LSATWiz.com]

Back on topic - I don’t see the logic of paycuts. When the economy bounces back, won’t those associates be pissed and jump ship? Aside from finances, the main thing that motivates loyalty is loyalty.

There were paycuts at some firms during the great recession. Some firms that did them did a true up afterwards to restore the lost pay in order to reduce the hard feelings. I'd take paycuts over layoffs if I had a choice.

Yeah, wow. That’s all so cut throat. I work in house and we announced that there aren’t going to be layoffs even for the telemarketers who literally can’t do their jobs because of random laws triggered by declaring a state of emergency. Our board (all non-lawyer investors) always talks about how it isn’t just dollars and cents but doing right by people. I never really took that seriously until I saw how we do business versus how lawyers do business.

[AdieuCali]

Any indication of whether certain practice groups are more insulated from layoffs generally in situations like this? Should a corporate associate be more worried than a litigation/employment/bankruptcy associate, since it seems like there's upticks in demand for those areas at the moment?

I would be hesitant to assume litigation's safe. Litigation tends to decrease during any economic downturn, and especially now with courts granting extensions left and right, and state courts shutting down.

That said, across corp. and lit, cap markets is probably the single riskiest group, as their work tends to be the first to dry up when the economy goes south. M&A is also somewhat risky. Bankruptcy and employment are probably the 'safest', along with tax and transactional IP.

Anyone have any idea what to expect in investigations/white collar work? I'm sure much depends on who is running DOJ on Jan. 21, but was there a downturn in internal investigations the last time corporations tightened their belts?

[LSATWiz.com]

Any indication of whether certain practice groups are more insulated from layoffs generally in situations like this? Should a corporate associate be more worried than a litigation/employment/bankruptcy associate, since it seems like there's upticks in demand for those areas at the moment?

I would be hesitant to assume litigation's safe. Litigation tends to decrease during any economic downturn, and especially now with courts granting extensions left and right, and state courts shutting down.

That said, across corp. and lit, cap markets is probably the single riskiest group, as their work tends to be the first to dry up when the economy goes south. M&A is also somewhat risky. Bankruptcy and employment are probably the 'safest', along with tax and transactional IP.

Anyone have any idea what to expect in investigations/white collar work? I'm sure much depends on who is running DOJ on Jan. 21, but was there a downturn in internal investigations the last time corporations tightened their belts?

I’m not in white collar but economic turmoil never leads to less crime (though crime rates have been down since stay at home orders took effect). The bigger issue is the shutdown on the DOJ itself. I track DOJ investigations related to antitrust work I do, and there is definitely much less action than there was earlier in the year. Cases are settling but only ones that were in settlement negotiations before the outbreak started. I would expect every area, including white collar to be affected, but again, not my area.

[nealric]

Back on topic - I don’t see the logic of paycuts. When the economy bounces back, won’t those associates be pissed and jump ship? Aside from finances, the main thing that motivates loyalty is loyalty.

There were paycuts at some firms during the great recession. Some firms that did them did a true up afterwards to restore the lost pay in order to reduce the hard feelings. I'd take paycuts over layoffs if I had a choice.

Yeah, wow. That’s all so cut throat. I work in house and we announced that there aren’t going to be layoffs even for the telemarketers who literally can’t do their jobs because of random laws triggered by declaring a state of emergency. Our board (all non-lawyer investors) always talks about how it isn’t just dollars and cents but doing right by people. I never really took that seriously until I saw how we do business versus how lawyers do business.

I'm in house as well. Keep in mind that the benevolence can be very dependent on the state of the industry. No inkling from my employer, but several of our competitors have already done layoffs, furloughs, and substantial salary cuts. Law firms aren't the only employers that are desperate to cut costs right now.

[Anonymous User]

Current first year at a top 50 firm working in Finance. Hearing that finance groups tend to do okay in downturns because of workouts and amendments. However my workload has been pretty lean... I was hitting 9 hours/day in Jan and Feb and now at about 6/day. Anyone have insight into the how Finance groups do, specifically lev finance?

[Anonymous User]

Cadwalader cutting salaries.

https://www.law360.com/lifesciences/art ... r-pandemic

[LSATWiz.com]

25 percent cuts. Wow. That’s a lot of money.

[VulcanVulcanVulcan]

Cadwalader cutting salaries.

https://www.law360.com/lifesciences/art ... r-pandemic

Cadwalader is pretty profitable, in the top 25 on a PPP basis. Do we think this could be the start of a broader movement to cut salaries? On the other hand, Cadwalader has had higher-than-market bonuses the past couple of years and that didn't move the market at all. And Cadwalader's reputation remains very poor.

[DoveBodyWash]

Cadwalader associates about to leave in droves

[LaLiLuLeLo]

It seems insanely early to cut salaries.

[M458]

Cadwalader associates about to leave in droves

To where exactly? If you're a capital markets associate you're basically stuck.

[VulcanVulcanVulcan]

Cadwalader cutting salaries.

https://www.law360.com/lifesciences/art ... r-pandemic

Cadwalader is pretty profitable, in the top 25 on a PPP basis. Do we think this could be the start of a broader movement to cut salaries? On the other hand, Cadwalader has had higher-than-market bonuses the past couple of years and that didn't move the market at all. And Cadwalader's reputation remains very poor.

Additionally, for what it's worth, Cadwalader's profit margin in 2018 is one of the lowest in the AmLaw 100: https://en.wikipedia.org/wiki/List_of_l ... er_partner

It is at 25% while comparable firms in PPP terms are at 40-50%. So it does seem like Cadwalader is in an unfavorable financial position, but does not mean other firms will not follow.

[LS989]

Cadwalader cutting salaries.

https://www.law360.com/lifesciences/art ... r-pandemic

Cadwalader is pretty profitable, in the top 25 on a PPP basis. Do we think this could be the start of a broader movement to cut salaries? On the other hand, Cadwalader has had higher-than-market bonuses the past couple of years and that didn't move the market at all. And Cadwalader's reputation remains very poor.

I saw speculation somewhere else that this could have been to take advantage of the CARE stimulus bill. Because Cadwalader has fewer than 500 US employees it can cut up to 25% of staff pay and still get the payroll tax relief.
That seems like a stretch but anything is possible right now I guess.

[PeanutsNJam]

Already posted this in the other thread, but since this is more active:

If it's a 25% (or more!) reduction in workload and no layoff threat, who wouldn't take the 25% paycut? Pretty sure most would be okay with that as a permanent thing.

Obviously if I have to maintain the same level of work while taking a 25% paycut then I'm quitting asap.

[2013]

Already posted this in the other thread, but since this is more active:

If it's a 25% (or more!) reduction in workload and no layoff threat, who wouldn't take the 25% paycut? Pretty sure most would be okay with that as a permanent thing.

Obviously if I have to maintain the same level of work while taking a 25% paycut then I'm quitting asap.

There are going to be layoffs if workload is reduced by 25%

[RaceJudicata]

It seems insanely early to cut salaries.

Agreed, but if it avoids layoffs in 6 months, I’m all for it.

[JusticeSquee]

Cadwalader cutting salaries.

https://www.law360.com/lifesciences/art ... r-pandemic

Cadwalader is pretty profitable, in the top 25 on a PPP basis. Do we think this could be the start of a broader movement to cut salaries? On the other hand, Cadwalader has had higher-than-market bonuses the past couple of years and that didn't move the market at all. And Cadwalader's reputation remains very poor.

Additionally, for what it's worth, Cadwalader's profit margin in 2018 is one of the lowest in the AmLaw 100: https://en.wikipedia.org/wiki/List_of_l ... er_partner

It is at 25% while comparable firms in PPP terms are at 40-50%. So it does seem like Cadwalader is in an unfavorable financial position, but does not mean other firms will not follow.

Cadwalader is a shithole. They regularly fuck over associates on both comp and bonus and maintain a largely "black box" model of compensation. That's probably how they artificially inflate PPP and other metrics.

[VulcanVulcanVulcan]

Here's another midlaw firm cutting salaries by 20%: https://abovethelaw.com/2020/03/associa ... viability/

[nealric]

Cadwalader cutting salaries.

https://www.law360.com/lifesciences/art ... r-pandemic

Cadwalader is pretty profitable, in the top 25 on a PPP basis. Do we think this could be the start of a broader movement to cut salaries? On the other hand, Cadwalader has had higher-than-market bonuses the past couple of years and that didn't move the market at all. And Cadwalader's reputation remains very poor.

Revenue per lawyer is a lot better metric than PPP for evaluating the finances of a firm. PPP is wonky because it's only equity partners in the mix, and some firms have very few equity partners (essentially only the big rainmakers). You could instantly double PPP by just de-equitizing a bunch of the less profitable partners.

In any event, Cadwalader is a lot more likely to cut salaries and conduct layoffs than Cravath, but I do think salary cuts won't be uncommon, especially as the shutdowns drag on.