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Posted: **Sun Jun 19, 2022 6:06 pm**

Want to know which firms “Lathamed” or worse in the last recession? This is what I’ve got, based on AmLaw data:

1) Smooth sailing firms (continual headcount growth despite hits to revenue):

Paul Weiss: Experienced RPL declines in 2005 (-2%) and 2009 (-5%) but had no years of headcount growth declines throughout both the dot.com bubble and financial crisis. Headcount growth has slightly contracted since 2017.

Gibson: -4% RPL contraction in 2008. Continual strong headcount growth through the recession. Negligible pre-crisis decline in headcount in 2004.

Ropes: RPL decline of -10% in 2009. Headcount steadily grew, excepting a negligible decrease in 2013.

2) Rough then smooth sailing firms (post-dot.com headcount (over?)-contraction followed by headcount growth throughout the financial crisis):

Sullivan: -8% RPL contraction in 2008 followed by a -4% RPL contraction in 2009. Headcount steadily grew from 665 in 2008 to 804 in 2013, then leveled off. However, post-dot.com headcount declined from 647 lawyers in 2003 to 538 lawyers in 2005 (-9% declines in 2004-05).

Davis: -11% RPL contraction in 2008. Steady growth in headcount through the recession. However, post-dot.com headcount declined from 595 in 2002 to 529 in 2005 (averaging -4% headcount declines from 2002-05).

Covington: RPL declines of -5% in 2009 and -7% in 2010. Steady headcount growth from 653 in 2009 to 707 in 2011. Post-dot.com headcount decline of -7% in 2003.

3) Speed bump firms (one year of slight headcount decline after RPL hit):

Wachtell: -13% RPL contraction in 2008 and -10% RPL contraction in 2010. Shrank from 253 lawyers in 2010 to 245 in 2011 (-3%), but returned to slight growth in 2012. However, Wactell’s revenue stream is highly variable compared to other firms. [Note: Cahill and Williams & Connolly also have highly variable RPL combined with slight headcount growth through the recession. Williams headcount continues to fluctuate, and Cahill has had a slight headcount decline nearly every year since 2015. There is no good category for either of these firms].

Kirkland: -3% RPL contraction in 2008 and 2009. Contraction from 1411 to 1379 lawyers in 2009 (-2%). Strong headcount growth in all other years dating to 1998.

Simpson: -13% RPL contraction in 2008. Shrank from 801 to 787 lawyers in 2008 (-2%), followed by headcount growth.

Quinn: RPL increase in 2008 (+1%) followed by a loss in 2009 (-5%). Slight headcount decline in 2009 (-1%).

4) Delayed shrinkage firms:

Cravath: -18% RPL contraction in 2008 followed by flat growth until 2012. Headcount grew through the recession, then began shrinking from 495 lawyers (2010) to 430 lawyers (2013), losing roughly -4% each year.

Cleary: RPL contractions in 2008 (-1%) and 2010 (-5%). Delayed headcount contraction in 2013 (-5%) and 2014 (-1%). Followed by four years of slight headcount growth and then contraction.

Weil: RPL losses of -2% in 2008 and 2009. Headcount growth in 2008 and 2009 was followed by a decline of 1212 lawyers to 1152 lawyers (2010) (-5%). Followed by alternating years of headcount growth and contraction.

Debevoise: -19% RPL contraction in 2009 followed by 0% RPL growth in 2010. Headcount losses averaged ~3% per year from 2009 (686 lawyers) to 2013 (595 lawyers).

Willkie: Three years of an average -7% RPL contraction from 2008-10. Headcount grew during these years. However, Willkie averaged a -5% year-over-year contraction in lawyers from 2011-13 (624 to 526 lawyers).

Jones Day: RPL contraction of -2% and -6% in 2008-09. Headcount growth through recession then contraction of -4% and -2% in 2011-12.

Orrick: Slight contractions or zero growth from 2008-11. Headcount growth in recession followed by an average shrinkage of -5% from 2012-14.

5) Rapid “Rightsizing” firms:

Latham: -12% RPL contraction in 2008. Shrank from 2102 lawyers (2008) to 1880 lawyers (2009) (-11% contraction) immediately followed by a return to uninterrupted headcount growth to present (now at 3078 total lawyers).

Cooley: RPL shrank -6% in 2009. Headcount contracted -3% and -4% in 2009 and 2010.

Milbank: RPL contraction of 11% in 2008. Headcount contraction from 581 to 534 in 2009 (-8%) followed by steady growth.

Goodwin: RPL contracted -8% in 2009. Headcount contracted -11% in 2010.

6) Over-correction or strategic shrinkage firms (significant headcount contractions relative to revenue loss):

Skadden: -6% RPL contraction in 2008. Shrank -7% in 2008 from 1994 to 1860 lawyers. Followed by further headcount contractions averaging -2% per year until reaching 1654 lawyers in 2013.

Sidley: RPL gain of +4% in 2008 and RPL loss of -2% in 2009. In 2009, contracted from 1702 to 1588 lawyers (-7%) and then to 1538 lawyers in 2010 (-3%).

Fried Frank: -11% RPL contraction in 2008 immediately followed by an -18% headcount contraction from 569 lawyers in 2008 to 469 lawyers in 2009.

White and Case: RPL losses of -2% in 2008 and 2009. Headcount shrank -9% and -4% in 2008 and 2009, going from 2074 lawyers (2008) to 1814 lawyers (2010).

Paul Hastings: RPL growth flatlined in 2008 at 0%, followed by several years of slight RPL growth. Headcount declined from 1062 to 917 in 2009 (-14%) and slowly contracted until 2014 (873 lawyers) before returning to growth.

Proskauer: RPL flatlined in 2008. Headcount contracted -6% in 2009.

Akin: RPL growth in 2007, 2008, and 2009. However, headcount contraction of -8% in 2008 and -10% in 2009.

Dechert: RPL contraction of -1% in 2009 and -6% in 2010. Headcount contractions of -3%, -11%, -4% and -1% in the years 2008 through 2011.

Cadwalader: Years of strong headcount and RPL growth until a -9% RPL contraction in 2007. Headcount contractions of -19% and -13% followed in 2008 and 2009.

Fenwick: RPL dropped -11% in 2008 followed by a -17% drop in headcount in 2009. Quickly returned to both RPL and lawyer growth.

*Past performance does not equal future performance. Some firms that over-contracted during the dot.com bubble did not contract in the next crisis, despite revenue hits. Likewise, the firms that over-contracted in 2008-09 might not want to repeat the experience.

Posted: **Sun Jun 19, 2022 8:45 pm**

Do you have data for K&L Gates?

Posted: **Sun Jun 19, 2022 10:54 pm**

I do. I didn't add them because they had a few mergers that messed with the data. They had mergers in 2005, 2007, and 2009 so the numbers are a bit off (explosive headcount growth) during the recession. But, in 2009 and 2010 the RPL declined by -2% and -1%. That was followed up by a flat headcount in 2011 and a -2% decline in 2012. K&L doesn't have any sharp contractions in the headcount data, though they have been slowly reducing lawyer count most years since 2012.

Posted: **Sun Jun 19, 2022 11:12 pm**

Thank you for this! Any info on WSGR?

Posted: **Sun Jun 19, 2022 11:47 pm**

WSGR had some kind of merger or very rapid expansion in 1999 and 2000 and went from 447 lawyers to 812 in two years. But the dot.com bubble popped and they immediately contracted headcount by -13%, -5%, -15%, and -5% from 2001 to 2004. During the financial crisis RPL declined by -1% in 2008 and 2009. The firm reduced headcount by -5% in 2009 and -2% in 2010. The firm has had almost non-stop growth until present.

Posted: **Mon Jun 20, 2022 3:23 pm**

Anonymous User wrote: ↑
Sun Jun 19, 2022 6:06 pm
Want to know which firms “Lathamed” or worse in the last recession? This is what I’ve got, based on AmLaw data:

1) Smooth sailing firms (continual headcount growth despite hits to revenue):

Paul Weiss: Experienced RPL declines in 2005 (-2%) and 2009 (-5%) but had no years of headcount growth declines throughout both the dot.com bubble and financial crisis. Headcount growth has slightly contracted since 2017.

Gibson: -4% RPL contraction in 2008. Continual strong headcount growth through the recession. Negligible pre-crisis decline in headcount in 2004.

Ropes: RPL decline of -10% in 2009. Headcount steadily grew, excepting a negligible decrease in 2013.

2) Rough then smooth sailing firms (post-dot.com headcount (over?)-contraction followed by headcount growth throughout the financial crisis):

Sullivan: -8% RPL contraction in 2008 followed by a -4% RPL contraction in 2009. Headcount steadily grew from 665 in 2008 to 804 in 2013, then leveled off. However, post-dot.com headcount declined from 647 lawyers in 2003 to 538 lawyers in 2005 (-9% declines in 2004-05).

Davis: -11% RPL contraction in 2008. Steady growth in headcount through the recession. However, post-dot.com headcount declined from 595 in 2002 to 529 in 2005 (averaging -4% headcount declines from 2002-05).

Covington: RPL declines of -5% in 2009 and -7% in 2010. Steady headcount growth from 653 in 2009 to 707 in 2011. Post-dot.com headcount decline of -7% in 2003.

3) Speed bump firms (one year of slight headcount decline after RPL hit):

Wachtell: -13% RPL contraction in 2008 and -10% RPL contraction in 2010. Shrank from 253 lawyers in 2010 to 245 in 2011 (-3%), but returned to slight growth in 2012. However, Wactell’s revenue stream is highly variable compared to other firms. [Note: Cahill and Williams & Connolly also have highly variable RPL combined with slight headcount growth through the recession. Williams headcount continues to fluctuate, and Cahill has had a slight headcount decline nearly every year since 2015. There is no good category for either of these firms].

Kirkland: -3% RPL contraction in 2008 and 2009. Contraction from 1411 to 1379 lawyers in 2009 (-2%). Strong headcount growth in all other years dating to 1998.

Simpson: -13% RPL contraction in 2008. Shrank from 801 to 787 lawyers in 2008 (-2%), followed by headcount growth.

Quinn: RPL increase in 2008 (+1%) followed by a loss in 2009 (-5%). Slight headcount decline in 2009 (-1%).

4) Delayed shrinkage firms:

Cravath: -18% RPL contraction in 2008 followed by flat growth until 2012. Headcount grew through the recession, then began shrinking from 495 lawyers (2010) to 430 lawyers (2013), losing roughly -4% each year.

Cleary: RPL contractions in 2008 (-1%) and 2010 (-5%). Delayed headcount contraction in 2013 (-5%) and 2014 (-1%). Followed by four years of slight headcount growth and then contraction.

Weil: RPL losses of -2% in 2008 and 2009. Headcount growth in 2008 and 2009 was followed by a decline of 1212 lawyers to 1152 lawyers (2010) (-5%). Followed by alternating years of headcount growth and contraction.

Debevoise: -19% RPL contraction in 2009 followed by 0% RPL growth in 2010. Headcount losses averaged ~3% per year from 2009 (686 lawyers) to 2013 (595 lawyers).

Willkie: Three years of an average -7% RPL contraction from 2008-10. Headcount grew during these years. However, Willkie averaged a -5% year-over-year contraction in lawyers from 2011-13 (624 to 526 lawyers).

Jones Day: RPL contraction of -2% and -6% in 2008-09. Headcount growth through recession then contraction of -4% and -2% in 2011-12.

Orrick: Slight contractions or zero growth from 2008-11. Headcount growth in recession followed by an average shrinkage of -5% from 2012-14.

5) Rapid “Rightsizing” firms:

Latham: -12% RPL contraction in 2008. Shrank from 2102 lawyers (2008) to 1880 lawyers (2009) (-11% contraction) immediately followed by a return to uninterrupted headcount growth to present (now at 3078 total lawyers).

Cooley: RPL shrank -6% in 2009. Headcount contracted -3% and -4% in 2009 and 2010.

Milbank: RPL contraction of 11% in 2008. Headcount contraction from 581 to 534 in 2009 (-8%) followed by steady growth.

Goodwin: RPL contracted -8% in 2009. Headcount contracted -11% in 2010.

6) Over-correction or strategic shrinkage firms (significant headcount contractions relative to revenue loss):

Skadden: -6% RPL contraction in 2008. Shrank -7% in 2008 from 1994 to 1860 lawyers. Followed by further headcount contractions averaging -2% per year until reaching 1654 lawyers in 2013.

Sidley: RPL gain of +4% in 2008 and RPL loss of -2% in 2009. In 2009, contracted from 1702 to 1588 lawyers (-7%) and then to 1538 lawyers in 2010 (-3%).

Fried Frank: -11% RPL contraction in 2008 immediately followed by an -18% headcount contraction from 569 lawyers in 2008 to 469 lawyers in 2009.

White and Case: RPL losses of -2% in 2008 and 2009. Headcount shrank -9% and -4% in 2008 and 2009, going from 2074 lawyers (2008) to 1814 lawyers (2010).

Paul Hastings: RPL growth flatlined in 2008 at 0%, followed by several years of slight RPL growth. Headcount declined from 1062 to 917 in 2009 (-14%) and slowly contracted until 2014 (873 lawyers) before returning to growth.

Proskauer: RPL flatlined in 2008. Headcount contracted -6% in 2009.

Akin: RPL growth in 2007, 2008, and 2009. However, headcount contraction of -8% in 2008 and -10% in 2009.

Dechert: RPL contraction of -1% in 2009 and -6% in 2010. Headcount contractions of -3%, -11%, -4% and -1% in the years 2008 through 2011.

Cadwalader: Years of strong headcount and RPL growth until a -9% RPL contraction in 2007. Headcount contractions of -19% and -13% followed in 2008 and 2009.

Fenwick: RPL dropped -11% in 2008 followed by a -17% drop in headcount in 2009. Quickly returned to both RPL and lawyer growth.

*Past performance does not equal future performance. Some firms that over-contracted during the dot.com bubble did not contract in the next crisis, despite revenue hits. Likewise, the firms that over-contracted in 2008-09 might not want to repeat the experience.

This is interesting. I think broadly the results track conventional wisdom: more lit-focused (or at least balanced) and somewhat smaller firms had less aggressive macro-driven headcount corrections. Of the corporate firms, seeing smaller shops like CSM, S&C, DPW shrinking less than, say, Skadden or White & Case, is unsurprising. Same for seeing lit/reg focused firms like Covington shrinking less than more corporate oriented places like Goodwin, etc. Of course there are notable exceptions to this general rule. But I have always thought that you are safer in a lit practice and at a smaller firm in times of cyclical correction.

PW and Gibson were much more lit-focused in the dotcom and 08 recessions than they are now though, so I wonder whether the dynamics are especially unlikely to be instructive. In particular, PW has grown quite rapidly through lateral hiring, so I would think that management and partner incentives have changed somewhat considerably as well.

Posted: **Tue Jun 21, 2022 12:53 pm**

Yeah, it's tough to say. I feel like I'd be safest at a firm that is rapidly picking up clients or that has very stable clients. Kirkland, GDC, PW, and Ropes were all expanding before the recession. I would also think that a big firm can be more buffered because they are not relying on one revenue stream in one market. Cadwalader was likely too reliant on certain market segments and got crushed. For the current year I'm curious to see what happens to firms that have SPAC/IPO, crypto, or tech heavy client bases.

Posted: **Tue Jun 21, 2022 11:27 pm**

Anonymous User wrote: ↑
Tue Jun 21, 2022 12:53 pm
Yeah, it's tough to say. I feel like I'd be safest at a firm that is rapidly picking up clients or that has very stable clients. Kirkland, GDC, PW, and Ropes were all expanding before the recession. I would also think that a big firm can be more buffered because they are not relying on one revenue stream in one market. Cadwalader was likely too reliant on certain market segments and got crushed. For the current year I'm curious to see what happens to firms that have SPAC/IPO, crypto, or tech heavy client bases.

Which firms have large crypto practices? Large enough that it would make a major dent in their revenue?

Posted: **Wed Jun 22, 2022 12:12 am**

Anonymous User wrote: ↑
Tue Jun 21, 2022 11:27 pm

Anonymous User wrote: ↑
Tue Jun 21, 2022 12:53 pm
Yeah, it's tough to say. I feel like I'd be safest at a firm that is rapidly picking up clients or that has very stable clients. Kirkland, GDC, PW, and Ropes were all expanding before the recession. I would also think that a big firm can be more buffered because they are not relying on one revenue stream in one market. Cadwalader was likely too reliant on certain market segments and got crushed. For the current year I'm curious to see what happens to firms that have SPAC/IPO, crypto, or tech heavy client bases.
Which firms have large crypto practices? Large enough that it would make a major dent in their revenue?

Not sure if it would make a dent in the revenue but Perkins Coie, DPW, Latham, and Sidley all have chambers band 1 blockchain and crypto practices.

Posted: **Thu Jun 23, 2022 4:38 am**

I don't think this post shows what it purports to. There's only a modest correlation between the headcounts a firm reports to AmLaw for a given year and how it actually treated its lawyers in that year.

First, of course, you have to be careful with the year average that AmLaw uses. If I had 50 lawyers in my firm in 2019, hired 50 more on 1/1/20, fired all 100 on 7/1/20, then hired 100 new laterals on 7/1/21, my reported average of 50 each year looks stable when it really was anything but. It's a caricature but there are some effects like that at play when boom and bust happen very closely together.

Second, there are just too many ways headcount can be distinct from a firm's general health. Remember that the basic firm model is dependent on regular voluntary attrition. Even absent firm management decisions, headcount in a bad recession is kept artificially high by the fact that no one can lateral. Consider Firm A laying off 10% of its associates in 2009 but not losing anyone else because everywhere else has a lateral hiring freeze too. Now consider the same Firm A overloaded with business in 2021, bringing piles of people in but with super high attrition because Kirkland's poaching everyone with a fat signing bonus. It would obviously be silly to think Firm A's health was the same in 2009 and 2021 just because they lost 10% of the headcount in both years, without further context as to why. Some firms fired quicker than others, and harder than others, and then subsequently hired later classes quicker and harder, some deferred incoming associates and some didn't, some were strict about up-or-out and some were happy to perma-counsel people. Many changed their composition* so they didn't really look the same as they had a few years earlier. And then obviously, you can have very different outcomes within a firm--Weil's bankruptcy group had a very different few years in the recession than all their transactional people. Your DC regulatory team was probably okay; your Miami real estate group probably vaporized.

Orrick would be a good example because OP noted their listed headcount was basically level from 2008 to 2010, but they actually laid off at least 140 associates in 2008/2009, which was about 20% of their associates/counsel at the time--absolutely one of the worst places for job security at the time. Conversely, you'll see in several firms that headcount steadily declined between roughly 2010 and 2018. Those firms weren't dying; they just generally made a choice that they were now going to be conservative with their summer hiring so they didn't have to lay off tons of people if problems arose two years later. Naturally, most of them were left scrambling/understaffed during the recent boom.

Third, these stats won't necessarily show the worst way to be fired, which is to have your offer to start as a first-year rugpulled. You are, of course, completely fucked if that happens to you in a serious downturn and many of those people never fully recovered. Some firms were done with large-scale layoffs by Q2 2009 but were absolutely not going to bring on the number of associates they had given offers to in summer '08**.

*Idle corporate attorneys became litigators by request, threat or both, and lots of bankruptcy groups doubling or tripling in size with first-years having no choice but to learn senior tasks. The large majority of the layoffs were juniors, and in the mid-2000s firms used to bring them in by the fuckton to basically do nothing but doc review for their first year or two. Whoever was doing that in 2008/2009 got canned, everyone was forced to become more efficient, and predictive technology advancements permanently killed a huge chunk of those junior roles. Conversely, if your firm was big into representing mortgage-backed security underwriters, you probably had a more senior group of associates and the business so thoroughly died that pretty much anyone top to bottom without another skill set was canned.

**For those who don't know, probably the majority of the class of 2009 outside the V10 was deferred, most just until the winter, but plenty of firms offered "voluntary" full-year deferrals to fall 2010. They started from pretty nominal amounts like $2500 a month, which obviously sucked (especially for people with big loans) but was usually better than nothing (someone else would know better what the loan deferment/forbearance rules were at the time) with no strings attached, so some of those people just did jack shit while others scrounged up what they could to stay busy/have a resume line. The deferrals went all the way up to $80k, which was half the first-year base at the time. Most of the bigger ones had a requirement that you did some public service job in the interim. Interestingly, Cravath did a voluntary year-long $80k no-strings-attached deferral for c/o 2009 but the entire class of 2010 was mandatorily deferred to fall 2011 for $65k (though I think they eventually agreed to start some of them on time who couldn't find any other work).

I put "voluntary" in quotes above because it was understood that if X percent of people didn't take them, they might later become mandatory on worse terms, sort of like how companies do buyouts with the threat of later layoffs not being anywhere near as generous. IIRC most of the voluntary deferrals were offered to c/o 2009 in the spring and summer and the mandatory deferrals came later. I don't remember how it progressed for individual firms but some had a choice, like starting in January for nothing or starting next fall for X stipend. Apart from really just needing the money ASAP, part of the reason some people didn't take those deferrals was that it was entirely possible those jobs would not, in fact, still be open to you after deferring a year--the offers weren't any less revocable than the ones that were being yanked left and right--when the lifeboats might be completely full. Really, people couldn't even be sure the firms would be around: At least four major firms completely went under primarily due to the Great Recession and probably a dozen more were forced into shotgun marriage/fire sale mergers.

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