Preparing for a recession Forum

[Anonymous User]

I work at a V10 and am starting to think, because I'm an incredibly pessimistic person, that there will be a recession in the next year or two. This has already been a very long expansion, the labor market is running out of slack, and asset prices are high. Outside of the economics, what are some practical things that a biglaw associate can do to prepare? I mean specifically with regards to the risk of layoffs. For example, if I were to lateral, would I be more or less likely to get laid off? Should I be trying to be as busy as possible? Etc.

[Anonymous User]

Work for or keep an eye on a firm that has a solid restructuring practice. They are revenue generators for firms in bad times.

There are plenty of creditor focused firms. Weil and KE dominate the debtor firms but those are really labor intensive and require an army of associates.

[Anonymous User]

Recessions typically see an increase in litigation, white collar/investigations, and restructuring work. So if you are at a V10 firm with a broad based practice you should be relatively fine. On the other hand, if you lateral to a firm that is heavy in M+A/finance, antitrust, emerging companies, funds work, and doesn’t have strong countercyclical practices like this, you might be at risk for layoffs.

[Anonymous User]

Recessions typically see an increase in litigation, white collar/investigations, and restructuring work. So if you are at a V10 firm with a broad based practice you should be relatively fine. On the other hand, if you lateral to a firm that is heavy in M+A/finance, antitrust, emerging companies, funds work, and doesn’t have strong countercyclical practices like this, you might be at risk for layoffs.

How might a recession affect the healthcare group at a biglaw firm?

[Anonymous User]

Work for or keep an eye on a firm that has a solid restructuring practice. They are revenue generators for firms in bad times.

There are plenty of creditor focused firms. Weil and KE dominate the debtor firms but those are really labor intensive and require an army of associates.

How does a good restructuring practice keep people afloat in other groups? Do, say, litigation people just do some of that work? Or is it just a matter of law firm economics with BK subsidizing other groups?

[ruski]

Work for or keep an eye on a firm that has a solid restructuring practice. They are revenue generators for firms in bad times.

There are plenty of creditor focused firms. Weil and KE dominate the debtor firms but those are really labor intensive and require an army of associates.

How does a good restructuring practice keep people afloat in other groups? Do, say, litigation people just do some of that work? Or is it just a matter of law firm economics with BK subsidizing other groups?

its a couple things: (1) people from other practice groups get roped in to do discreet tasks/junior level work, even midlevel from corporate groups can be brought in to do junior work. they just become so busy they need bodies and (2) when the firm is flush with cash it's easier to coast by with low hours; its once they decide they need to start tightening the belt you're in trouble as they actively look for ways to cut costs

[Anonymous User]

Work for or keep an eye on a firm that has a solid restructuring practice. They are revenue generators for firms in bad times.

There are plenty of creditor focused firms. Weil and KE dominate the debtor firms but those are really labor intensive and require an army of associates.

How does a good restructuring practice keep people afloat in other groups? Do, say, litigation people just do some of that work? Or is it just a matter of law firm economics with BK subsidizing other groups?

Many bankruptcies devolve into litigation (creditor v creditor, creditor v. debtor, etc.) and then there can be litigation against third-parties to bring in assets for the estate. Often these are like regular breach of contract, fraud or tort cases, only they take place in bankruptcy court and generally have a lot tighter timelines since everyone is trying to wrap up the estate and get paid. The Lehman estate is a prime example - there are still huge litigation matters 10 years after filing. A big bankruptcy case can keep teams of litigators busy. (In slower times or when litigation is busy, some of that work might be done by bankruptcy associates.). There is also some finance work that can come out of a bankruptcy as the debtor often needs financing to try and stay operational until the estate is wound down.

I haven’t seen litigators get moved into doing the hardcore BK work (then again I am a summer child.)

Recessions typically see an increase in litigation, white collar/investigations, and restructuring work. So if you are at a V10 firm with a broad based practice you should be relatively fine. On the other hand, if you lateral to a firm that is heavy in M+A/finance, antitrust, emerging companies, funds work, and doesn’t have strong countercyclical practices like this, you might be at risk for layoffs.

How might a recession affect the healthcare group at a biglaw firm?

Is the work mostly heathcare regulatory? If so I’d think you’d be hit less hard than the healthcare M+A practices although the lack of deals will slow things down somewhat.

[Anonymous User]

Work for or keep an eye on a firm that has a solid restructuring practice. They are revenue generators for firms in bad times.

There are plenty of creditor focused firms. Weil and KE dominate the debtor firms but those are really labor intensive and require an army of associates.

How does a good restructuring practice keep people afloat in other groups? Do, say, litigation people just do some of that work? Or is it just a matter of law firm economics with BK subsidizing other groups?

Many bankruptcies devolve into litigation (creditor v creditor, creditor v. debtor, etc.) and then there can be litigation against third-parties to bring in assets for the estate. Often these are like regular breach of contract, fraud or tort cases, only they take place in bankruptcy court and generally have a lot tighter timelines since everyone is trying to wrap up the estate and get paid. The Lehman estate is a prime example - there are still huge litigation matters 10 years after filing. A big bankruptcy case can keep teams of litigators busy. (In slower times or when litigation is busy, some of that work might be done by bankruptcy associates.). There is also some finance work that can come out of a bankruptcy as the debtor often needs financing to try and stay operational until the estate is wound down.

I haven’t seen litigators get moved into doing the hardcore BK work (then again I am a summer child.)

Recessions typically see an increase in litigation, white collar/investigations, and restructuring work. So if you are at a V10 firm with a broad based practice you should be relatively fine. On the other hand, if you lateral to a firm that is heavy in M+A/finance, antitrust, emerging companies, funds work, and doesn’t have strong countercyclical practices like this, you might be at risk for layoffs.

How might a recession affect the healthcare group at a biglaw firm?

Is the work mostly heathcare regulatory? If so I’d think you’d be hit less hard than the healthcare M+A practices although the lack of deals will slow things down somewhat.

Some regulatory but mainly Healthcare litigation.