What's going on at S&C? Forum
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What's going on at S&C?
I've been hearing vague noises that S&C is in considerable financial distress right now because of its building.
For those who don't know, S&C owns its whole building. S&C cancelled its summer program entirely, buying out summers at 50% and giving return offers to everyone. S&C also got hit with a wave of staff layoffs, some of which don't signal anything (temps) but others which seem significant (head of internal audit, knowledge management).
Does anyone have actual color here? Especially curious if anyone has a sense of how being a landlord is treating S&C (how are the tenants?) because my vague assumption -- without particular evidence -- is that S&C's billings shouldn't be hit any more than like STB / DPW, neither of whom seem financially imperiled at the moment.
For those who don't know, S&C owns its whole building. S&C cancelled its summer program entirely, buying out summers at 50% and giving return offers to everyone. S&C also got hit with a wave of staff layoffs, some of which don't signal anything (temps) but others which seem significant (head of internal audit, knowledge management).
Does anyone have actual color here? Especially curious if anyone has a sense of how being a landlord is treating S&C (how are the tenants?) because my vague assumption -- without particular evidence -- is that S&C's billings shouldn't be hit any more than like STB / DPW, neither of whom seem financially imperiled at the moment.
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Re: What's going on at S&C?
Curious about this as well.
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Re: What's going on at S&C?
soft blue wrote: ↑Fri Jul 24, 2020 3:08 pmI've been hearing vague noises that S&C is in considerable financial distress right now because of its building.
For those who don't know, S&C owns its whole building. S&C cancelled its summer program entirely, buying out summers at 50% and giving return offers to everyone. S&C also got hit with a wave of staff layoffs, some of which don't signal anything (temps) but others which seem significant (head of internal audit, knowledge management).
Does anyone have actual color here? Especially curious if anyone has a sense of how being a landlord is treating S&C (how are the tenants?) because my vague assumption -- without particular evidence -- is that S&C's billings shouldn't be hit any more than like STB / DPW, neither of whom seem financially imperiled at the moment.
S&C actually gave most summers less than 50% of scheduled pay while spinning it as full payment. As a summer, I have no inside knowledge of the firm, but anecdotally, almost everyone I know who was originally planning to work for them has decided to try and clerk and then lateral. I've no idea how many have been successful in that regard but there has been no good news coming from the firm. Posting anon for obvious reasons.
Last edited by Anonymous User on Fri Jul 24, 2020 3:20 pm, edited 1 time in total.
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Re: What's going on at S&C?
I could only imagine owning your own building is good in such a time because you longer worry about paying your rent. How does the building get S&C in financial distress? Would appreciate some insight.
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Re: What's going on at S&C?
S&C has to cover the mortgage for the whole building. If their tenants aren't paying, or if they've renegotiated their rent down, S&C has to make up that difference. That includes S&C's own expenses: it may well be that S&C is paying more for its office (in terms of its mortgage) than peers are currently paying as renters.Anonymous User wrote: ↑Fri Jul 24, 2020 3:18 pmI could only imagine owning your own building is good in such a time because you longer worry about paying your rent. How does the building get S&C in financial distress? Would appreciate some insight.
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Re: What's going on at S&C?
Makes sense. I was naive to think "own the building" means "own" the builiding. Didn't think about mortgages.soft blue wrote: ↑Fri Jul 24, 2020 3:21 pmS&C has to cover the mortgage for the whole building. If their tenants aren't paying, or if they've renegotiated their rent down, S&C has to make up that difference. That includes S&C's own expenses: it may well be that S&C is paying more for its office (in terms of its mortgage) than peers are currently paying as renters.Anonymous User wrote: ↑Fri Jul 24, 2020 3:18 pmI could only imagine owning your own building is good in such a time because you longer worry about paying your rent. How does the building get S&C in financial distress? Would appreciate some insight.
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Re: What's going on at S&C?
Property taxes too. Owning NYC real estate is like buying junk bonds: huge appreciation potential, but it doesn't take much bad luck to get way underwater.Anonymous User wrote: ↑Fri Jul 24, 2020 4:54 pmMakes sense. I was naive to think "own the building" means "own" the builiding. Didn't think about mortgages.soft blue wrote: ↑Fri Jul 24, 2020 3:21 pmS&C has to cover the mortgage for the whole building. If their tenants aren't paying, or if they've renegotiated their rent down, S&C has to make up that difference. That includes S&C's own expenses: it may well be that S&C is paying more for its office (in terms of its mortgage) than peers are currently paying as renters.Anonymous User wrote: ↑Fri Jul 24, 2020 3:18 pmI could only imagine owning your own building is good in such a time because you longer worry about paying your rent. How does the building get S&C in financial distress? Would appreciate some insight.
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Re: What's going on at S&C?
Your thesis that a law firm with $750M in profits last year would be in "considerable financial distress" because of reduced occupancy on 560k sqft it leases out doesn't make sense unless you and I have really different definitions of that phrase.soft blue wrote: ↑Fri Jul 24, 2020 3:08 pmI've been hearing vague noises that S&C is in considerable financial distress right now because of its building.
For those who don't know, S&C owns its whole building. S&C cancelled its summer program entirely, buying out summers at 50% and giving return offers to everyone. S&C also got hit with a wave of staff layoffs, some of which don't signal anything (temps) but others which seem significant (head of internal audit, knowledge management).
Does anyone have actual color here? Especially curious if anyone has a sense of how being a landlord is treating S&C (how are the tenants?) because my vague assumption -- without particular evidence -- is that S&C's billings shouldn't be hit any more than like STB / DPW, neither of whom seem financially imperiled at the moment.
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Re: What's going on at S&C?
I'm sure someone familiar with commercial rent in New York can figure out how much S&C would get on full occupancy from the parts of the building it doesn't occupy and what the loss would be if rent payments declined significantly.Monochromatic Oeuvre wrote: ↑Fri Jul 24, 2020 5:11 pmYour thesis that a law firm with $750M in profits last year would be in "considerable financial distress" because of reduced occupancy on 560k sqft it leases out doesn't make sense unless you and I have really different definitions of that phrase.soft blue wrote: ↑Fri Jul 24, 2020 3:08 pmI've been hearing vague noises that S&C is in considerable financial distress right now because of its building.
For those who don't know, S&C owns its whole building. S&C cancelled its summer program entirely, buying out summers at 50% and giving return offers to everyone. S&C also got hit with a wave of staff layoffs, some of which don't signal anything (temps) but others which seem significant (head of internal audit, knowledge management).
Does anyone have actual color here? Especially curious if anyone has a sense of how being a landlord is treating S&C (how are the tenants?) because my vague assumption -- without particular evidence -- is that S&C's billings shouldn't be hit any more than like STB / DPW, neither of whom seem financially imperiled at the moment.
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Re: What's going on at S&C?
Manhattan Class A is roughly $80-100/sq. ft. So we're taking about a high seven-/low eight-figure number here. That sucks but it's not going to sink the firm on its own.parkslope wrote: ↑Fri Jul 24, 2020 5:24 pmI'm sure someone familiar with commercial rent in New York can figure out how much S&C would get on full occupancy from the parts of the building it doesn't occupy and what the loss would be if rent payments declined significantly.Monochromatic Oeuvre wrote: ↑Fri Jul 24, 2020 5:11 pmYour thesis that a law firm with $750M in profits last year would be in "considerable financial distress" because of reduced occupancy on 560k sqft it leases out doesn't make sense unless you and I have really different definitions of that phrase.soft blue wrote: ↑Fri Jul 24, 2020 3:08 pmI've been hearing vague noises that S&C is in considerable financial distress right now because of its building.
For those who don't know, S&C owns its whole building. S&C cancelled its summer program entirely, buying out summers at 50% and giving return offers to everyone. S&C also got hit with a wave of staff layoffs, some of which don't signal anything (temps) but others which seem significant (head of internal audit, knowledge management).
Does anyone have actual color here? Especially curious if anyone has a sense of how being a landlord is treating S&C (how are the tenants?) because my vague assumption -- without particular evidence -- is that S&C's billings shouldn't be hit any more than like STB / DPW, neither of whom seem financially imperiled at the moment.
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Re: What's going on at S&C?
It's a fair point! I had just been hearing noises and was asking.Monochromatic Oeuvre wrote: ↑Fri Jul 24, 2020 5:11 pmYour thesis that a law firm with $750M in profits last year would be in "considerable financial distress" because of reduced occupancy on 560k sqft it leases out doesn't make sense unless you and I have really different definitions of that phrase.soft blue wrote: ↑Fri Jul 24, 2020 3:08 pmI've been hearing vague noises that S&C is in considerable financial distress right now because of its building.
For those who don't know, S&C owns its whole building. S&C cancelled its summer program entirely, buying out summers at 50% and giving return offers to everyone. S&C also got hit with a wave of staff layoffs, some of which don't signal anything (temps) but others which seem significant (head of internal audit, knowledge management).
Does anyone have actual color here? Especially curious if anyone has a sense of how being a landlord is treating S&C (how are the tenants?) because my vague assumption -- without particular evidence -- is that S&C's billings shouldn't be hit any more than like STB / DPW, neither of whom seem financially imperiled at the moment.
However, 1.) do we expect those profits to remain at that level this year, 2.) do we know how the mortgage was structured (is there a significant principal payment coming up?), and 3.) how much $$$ can you start taking from partner draws before they leave? If I'm at, like, S&C Palo Alto, I don't want my draw to go down to pay for NYC's real estate mistake.
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Re: What's going on at S&C?
The other interesting thing is that I looked at Mergermarket and S&C's M&A totals declined from $312 million to $70 million from H1 2019 to H1 2020. (Most firms had >50% declines to be fair.) So there would seem to be a lot of transactional associates not doing very much these days.The Lsat Airbender wrote: ↑Fri Jul 24, 2020 5:28 pmManhattan Class A is roughly $80-100/sq. ft. So we're taking about a high seven-/low eight-figure number here. That sucks but it's not going to sink the firm on its own.parkslope wrote: ↑Fri Jul 24, 2020 5:24 pmI'm sure someone familiar with commercial rent in New York can figure out how much S&C would get on full occupancy from the parts of the building it doesn't occupy and what the loss would be if rent payments declined significantly.Monochromatic Oeuvre wrote: ↑Fri Jul 24, 2020 5:11 pmYour thesis that a law firm with $750M in profits last year would be in "considerable financial distress" because of reduced occupancy on 560k sqft it leases out doesn't make sense unless you and I have really different definitions of that phrase.soft blue wrote: ↑Fri Jul 24, 2020 3:08 pmI've been hearing vague noises that S&C is in considerable financial distress right now because of its building.
For those who don't know, S&C owns its whole building. S&C cancelled its summer program entirely, buying out summers at 50% and giving return offers to everyone. S&C also got hit with a wave of staff layoffs, some of which don't signal anything (temps) but others which seem significant (head of internal audit, knowledge management).
Does anyone have actual color here? Especially curious if anyone has a sense of how being a landlord is treating S&C (how are the tenants?) because my vague assumption -- without particular evidence -- is that S&C's billings shouldn't be hit any more than like STB / DPW, neither of whom seem financially imperiled at the moment.
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Re: What's going on at S&C?
1. No, but many expense reductions (e.g. lower bonuses) will accompany the reduced revenue, and incessant rate growth has sailed profits through flat demand, so if S&C reports a PPP decline of over 15% in nine months, come back and quote me and I'll admit I underestimated things.soft blue wrote: ↑Fri Jul 24, 2020 5:36 pmIt's a fair point! I had just been hearing noises and was asking.Monochromatic Oeuvre wrote: ↑Fri Jul 24, 2020 5:11 pmYour thesis that a law firm with $750M in profits last year would be in "considerable financial distress" because of reduced occupancy on 560k sqft it leases out doesn't make sense unless you and I have really different definitions of that phrase.soft blue wrote: ↑Fri Jul 24, 2020 3:08 pmI've been hearing vague noises that S&C is in considerable financial distress right now because of its building.
For those who don't know, S&C owns its whole building. S&C cancelled its summer program entirely, buying out summers at 50% and giving return offers to everyone. S&C also got hit with a wave of staff layoffs, some of which don't signal anything (temps) but others which seem significant (head of internal audit, knowledge management).
Does anyone have actual color here? Especially curious if anyone has a sense of how being a landlord is treating S&C (how are the tenants?) because my vague assumption -- without particular evidence -- is that S&C's billings shouldn't be hit any more than like STB / DPW, neither of whom seem financially imperiled at the moment.
However, 1.) do we expect those profits to remain at that level this year, 2.) do we know how the mortgage was structured (is there a significant principal payment coming up?), and 3.) how much $$$ can you start taking from partner draws before they leave? If I'm at, like, S&C Palo Alto, I don't want my draw to go down to pay for NYC's real estate mistake.
2. Commercial RE loans are usually structured to have the biggest payments on the back end, and if this deal in four years old, you're probably somewhere in the middle.
3. Partner greed is boundless, but leaving a firm already among the wealthiest in a recession is probably not a winning move unless the sky really is falling.
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Re: What's going on at S&C?
Monochromatic Oeuvre wrote: ↑Fri Jul 24, 2020 6:11 pm. . .
3. Partner greed is boundless, but leaving a firm already among the wealthiest in a recession is probably not a winning move unless the sky really is falling.
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Re: What's going on at S&C?
R.I.P. S&C
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Re: What's going on at S&C?
Is it true that S&C is requiring students to give back some of their pay if they don’t accept their offers to return as associates?
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Re: What's going on at S&C?
S&C gave us an option of taking a $10K advance on our salary. If you don’t return to the firm, you have to pay it back. Not quite the same thing you are describing.
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Re: What's going on at S&C?
If you don’t mind my asking, what did they pay that you don’t have to pay back if you don’t accept their offer?Anonymous User wrote: ↑Fri Jul 24, 2020 11:31 pmS&C gave us an option of taking a $10K advance on our salary. If you don’t return to the firm, you have to pay it back. Not quite the same thing you are describing.
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Re: What's going on at S&C?
enibs wrote: ↑Sat Jul 25, 2020 12:05 amIf you don’t mind my asking, what did they pay that you don’t have to pay back if you don’t accept their offer?Anonymous User wrote: ↑Fri Jul 24, 2020 11:31 pmS&C gave us an option of taking a $10K advance on our salary. If you don’t return to the firm, you have to pay it back. Not quite the same thing you are describing.
It was slightly less than $19K, which would be pay for about 5 weeks.
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Re: What's going on at S&C?
That genuinely sucks. I'm sorry you had to go through that, OP. FWIW, if you had the credentials to get S&C in the first place, you're probably in a pretty good position to get a clerkship. I'd also encourage you (and others in your position) to not completely wave away 3L OCI. 3L hiring is down right now compared to previous years, but a lot of people in the c/o 2020 went the clerkship route back in March/April once we started to see deferrals to 2021 and cancelled SA programs, so there may be some spots opening up in specific practice groups. So its definitely worth mass mailing in addition to clerkship apps.Anonymous User wrote: ↑Fri Jul 24, 2020 3:16 pmS&C actually gave most summers less than 50% of scheduled pay while spinning it as full payment. As a summer, I have no inside knowledge of the firm, but anecdotally, almost everyone I know who was originally planning to work for them has decided to try and clerk and then lateral. I've no idea how many have been successful in that regard but there has been no good news coming from the firm. Posting anon for obvious reasons.
Last edited by Anonymous User on Mon Jul 27, 2020 12:32 pm, edited 1 time in total.
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Re: What's going on at S&C?
I'm also an S&C summer. In my unprofessional opinion, the layoffs probably stem more from the fact that most of those positions aren't really needed right now and they can trim fat in an obvious place. The article also implies there may be some more layoffs from tech outsourcing in the future. I don't know where OP's "voices" came from, so any help there would be useful. There's a big difference between an internal voice at S&C and another law student.
I think a lot of people try and drum up tension on this site, either to satisfy their own anxieties or to carry out their schadenfreude fantasies, neither of which are productive. Given that they gave offers (which they didn't have to do, and not every comparable firm is doing), I don't see any rational reason to jump ship. If I'm wrong, we'll know in November/December.
I think a lot of people try and drum up tension on this site, either to satisfy their own anxieties or to carry out their schadenfreude fantasies, neither of which are productive. Given that they gave offers (which they didn't have to do, and not every comparable firm is doing), I don't see any rational reason to jump ship. If I'm wrong, we'll know in November/December.
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Re: What's going on at S&C?
My noises have come from one-step-removed connections to S&C: a friend's S/O is a lit mid there and is suddenly very interested in leaving (and cited "firm health" as the reason why -- but has been unhappy for other reasons and I don't know how much I buy that), a buddy who is a junior at S&C reached out to me to ask how open my firm was to laterals, etc. I don't have any real intel, etc, but it's not just thirdhand guessing.Anonymous User wrote: ↑Sat Jul 25, 2020 9:54 amI'm also an S&C summer. In my unprofessional opinion, the layoffs probably stem more from the fact that most of those positions aren't really needed right now and they can trim fat in an obvious place. The article also implies there may be some more layoffs from tech outsourcing in the future. I don't know where OP's "voices" came from, so any help there would be useful. There's a big difference between an internal voice at S&C and another law student.
I think a lot of people try and drum up tension on this site, either to satisfy their own anxieties or to carry out their schadenfreude fantasies, neither of which are productive. Given that they gave offers (which they didn't have to do, and not every comparable firm is doing), I don't see any rational reason to jump ship. If I'm wrong, we'll know in November/December.
What comparable (v20?) firm didn't give out offers to everyone? My sense was that everyone at S&C's level or even slightly below it was giving out return offers. (I know DPW & PW did, believe STB / Skadden / CSM as well.)
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Re: What's going on at S&C?
Latham, Simpson, Gibson Dunn, Sidley, Quinn, Covington, Jones Day, Debevoise are all V20 firms that according to Reddit haven't guaranteed offers.soft blue wrote: ↑Sat Jul 25, 2020 11:18 amMy noises have come from one-step-removed connections to S&C: a friend's S/O is a lit mid there and is suddenly very interested in leaving (and cited "firm health" as the reason why -- but has been unhappy for other reasons and I don't know how much I buy that), a buddy who is a junior at S&C reached out to me to ask how open my firm was to laterals, etc. I don't have any real intel, etc, but it's not just thirdhand guessing.Anonymous User wrote: ↑Sat Jul 25, 2020 9:54 amI'm also an S&C summer. In my unprofessional opinion, the layoffs probably stem more from the fact that most of those positions aren't really needed right now and they can trim fat in an obvious place. The article also implies there may be some more layoffs from tech outsourcing in the future. I don't know where OP's "voices" came from, so any help there would be useful. There's a big difference between an internal voice at S&C and another law student.
I think a lot of people try and drum up tension on this site, either to satisfy their own anxieties or to carry out their schadenfreude fantasies, neither of which are productive. Given that they gave offers (which they didn't have to do, and not every comparable firm is doing), I don't see any rational reason to jump ship. If I'm wrong, we'll know in November/December.
What comparable (v20?) firm didn't give out offers to everyone? My sense was that everyone at S&C's level or even slightly below it was giving out return offers. (I know DPW & PW did, believe STB / Skadden / CSM as well.)
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Re: What's going on at S&C?
I was going to ask the same question, except instead of asking I was going to point out that poster's statement is baloney. To date, no other v10 has failed to give 100% offers. In the v20, the only firm delaying making a decision on offers so far is Jones Day (go figure, the Black box compensation firm). They're making summers wait until at least mid-August.soft blue wrote: ↑Sat Jul 25, 2020 11:18 am[OMITTED TEXT]Anonymous User wrote: ↑Sat Jul 25, 2020 9:54 am[OMITTED TEXT]
Given that they gave offers (which they didn't have to do, and not every comparable firm is doing), I don't see any rational reason to jump ship. If I'm wrong, we'll know in November/December.
What comparable (v20?) firm didn't give out offers to everyone? My sense was that everyone at S&C's level or even slightly below it was giving out return offers. (I know DPW & PW did, believe STB / Skadden / CSM as well.)
Edit: And, obviously, there are firms v1-v20 that typically give offers the last week of the summer, so until most programs end ~next week it's too soon to say any other firm has failed to give offers. And the other v20 firms gave more compensation than 50%.
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Re: What's going on at S&C?
S&C dweebs desperately trying to pretend their firm is still elite, LJL
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