Firms With Revenue Declines in 2020 - What Does It Mean for Associates? Forum

[Anonymous User]

While a lot of the V20 seemingly had a recordbreaking year last year, some lower-ranked firms had noticeable revenue declines. If you're an associate at one of those firms, should you be looking to lateral ASAP? During the Great Recession, how long did it take firms with revenue declines to reduce headcount?

[Anonymous User]

While a lot of the V20 seemingly had a recordbreaking year last year, some lower-ranked firms had noticeable revenue declines. If you're an associate at one of those firms, should you be looking to lateral ASAP? During the Great Recession, how long did it take firms with revenue declines to reduce headcount?

Not trying to derail the thread or anything, but how did you find information concerning year-to-year revenue changes? I seem to be only be able to find 2019 revenue data, and it seems some (most?) firms have not published their 2020 revenues.

[Anonymous User]

Revenue seems less important than retaining profitability most years. Though this year profitability is likely more gameable, I still think it's more important.

[Anonymous User]

Last year was a bit of a unicorn and a lot of practices that were slow last year are already back this year. Plus, lot of firms with revenue declines were actually more profitable last year because expenses were also down. I'd be concerned if my practice group was slow last year and still low this year, but firms aren't going to lay people off in busy practice groups, and that's not what happened in 2008 either. That would make no sense.

2008 was just so much different than this...entire groups would have just about no work whatsoever, and there was no sign of it coming back anytime soon. Investment banks were going under or being acquired to save them from going under. There were bailouts and major regulations were passed. Revenues were down 20%+ and profits 30% at some firms (even with major layoffs to cut expenses).

I'm not aware of a major firm that was hit that hard by the pandemic. The closest I know of is Shearman & Sterling (-11.1% Revenue, -22.9% PPP). Cadwalader was down 15.1% PPP but that's largely due to them deleveraging a bit (net income was actually up a bit and profits per lawyer were pretty much flat).

If I'm in a group that was slow last year and is still slow this year I'm probably a bit worried right now, and maybe the firm's revenue being down last year would dial that concern up somewhat, but it'd be kind of ridiculous for someone who is busy right now to be concerned about layoffs just because their firm's revenue fell last year.