"Cadwalader Cuts Pay [By 25%] Across The Firm To Weather Pandemic"

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"Cadwalader Cuts Pay [By 25%] Across The Firm To Weather Pandemic"

Post by Veronica2015 » Tue Mar 31, 2020 12:37 pm

Last edited by cavalier1138 on Tue Mar 31, 2020 12:50 pm, edited 1 time in total.
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Re: "Cadwalader Cuts Pay [By 25%] Across The Firm To Weather Pandemic"

Post by PeanutsNJam » Tue Mar 31, 2020 12:46 pm

Honestly, I'd 100% take a 25% paycut so long as there's also at least a 25% reduction in workload and I don't have to stress about getting laid off.

This is much better than surprise axing people in droves while the people who stay around get to continue working themselves to the bone.

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Re: "Cadwalader Cuts Pay [By 25%] Across The Firm To Weather Pandemic"

Post by JusticeSquee » Tue Mar 31, 2020 12:49 pm

Cadwalader has, and always will be, a total and complete shithole.

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Re: "Cadwalader Cuts Pay [By 25%] Across The Firm To Weather Pandemic"

Post by blackmamba8 » Tue Mar 31, 2020 1:03 pm

Any thoughts on the idea that they did this to take advantage of the CARES Act? 25% is the exact amount small businesses can cut salaries and still take advantage.

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Re: "Cadwalader Cuts Pay [By 25%] Across The Firm To Weather Pandemic"

Post by nixy » Tue Mar 31, 2020 1:06 pm

PeanutsNJam wrote:Honestly, I'd 100% take a 25% paycut so long as there's also at least a 25% reduction in workload and I don't have to stress about getting laid off.

This is much better than surprise axing people in droves while the people who stay around get to continue working themselves to the bone.
But why would there be a 25% reduction in workload?

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Re: "Cadwalader Cuts Pay [By 25%] Across The Firm To Weather Pandemic"

Post by lawdude31 » Tue Mar 31, 2020 1:14 pm

nixy wrote:
PeanutsNJam wrote:Honestly, I'd 100% take a 25% paycut so long as there's also at least a 25% reduction in workload and I don't have to stress about getting laid off.

This is much better than surprise axing people in droves while the people who stay around get to continue working themselves to the bone.
But why would there be a 25% reduction in workload?
It seems like a lot of departments are slow right now.

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Re: "Cadwalader Cuts Pay [By 25%] Across The Firm To Weather Pandemic"

Post by inter-associate » Tue Mar 31, 2020 1:25 pm

I've said this to many friends/colleagues over the years - I would take a significant paycut if it meant preventing layoffs, and I am in the group of people with very low risk of being let go. Only concern with firms like Cadwalader, who I don't think anyone trusts to look out for associates/staff, is that they will cut pay and follow it with headcount reduction. Would also be nice if the partnership took an actual cut to comp instead of just deferring for a few months, but that is probably asking too much.
Last edited by QContinuum on Tue Mar 31, 2020 1:32 pm, edited 1 time in total.
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Re: "Cadwalader Cuts Pay [By 25%] Across The Firm To Weather Pandemic"

Post by nixy » Tue Mar 31, 2020 1:45 pm

lawdude31 wrote:
nixy wrote:
PeanutsNJam wrote:Honestly, I'd 100% take a 25% paycut so long as there's also at least a 25% reduction in workload and I don't have to stress about getting laid off.

This is much better than surprise axing people in droves while the people who stay around get to continue working themselves to the bone.
But why would there be a 25% reduction in workload?
It seems like a lot of departments are slow right now.
That’s true, but it’s not something I can see firms actually endorsing (that is, making official in any way that hours expectations are now 25% less). It seems like you’d be stuck worrying about your hours just as much as ever.

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Re: "Cadwalader Cuts Pay [By 25%] Across The Firm To Weather Pandemic"

Post by Anonymous User » Tue Mar 31, 2020 1:46 pm

This firm never had a particular good reputation and this is just another reason to avoid it in the future. I'll never forget my call-back interview there many years ago. One of the associates who interviewed me said the best thing about working there is the resume line you will get when you leave. It was pretty easy to read between the lines of what he was telling me.

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Re: "Cadwalader Cuts Pay [By 25%] Across The Firm To Weather Pandemic"

Post by Anonymous User » Tue Mar 31, 2020 2:20 pm

nixy wrote:
lawdude31 wrote:
nixy wrote:
PeanutsNJam wrote:Honestly, I'd 100% take a 25% paycut so long as there's also at least a 25% reduction in workload and I don't have to stress about getting laid off.

This is much better than surprise axing people in droves while the people who stay around get to continue working themselves to the bone.
But why would there be a 25% reduction in workload?
It seems like a lot of departments are slow right now.
That’s true, but it’s not something I can see firms actually endorsing (that is, making official in any way that hours expectations are now 25% less). It seems like you’d be stuck worrying about your hours just as much as ever.
There’s been talk at my firm about lowering the billable requirement to be bonus eligible for this year. Of course, no one has mentioned if the bonus would be smaller as well.

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Re: "Cadwalader Cuts Pay [By 25%] Across The Firm To Weather Pandemic"

Post by VulcanVulcanVulcan » Tue Mar 31, 2020 2:22 pm

Anonymous User wrote:
nixy wrote:
lawdude31 wrote:
nixy wrote:
PeanutsNJam wrote:Honestly, I'd 100% take a 25% paycut so long as there's also at least a 25% reduction in workload and I don't have to stress about getting laid off.

This is much better than surprise axing people in droves while the people who stay around get to continue working themselves to the bone.
But why would there be a 25% reduction in workload?
It seems like a lot of departments are slow right now.
That’s true, but it’s not something I can see firms actually endorsing (that is, making official in any way that hours expectations are now 25% less). It seems like you’d be stuck worrying about your hours just as much as ever.
There’s been talk at my firm about lowering the billable requirement to be bonus eligible for this year. Of course, no one has mentioned if the bonus would be smaller as well.
The bonus is definitely going to be smaller. Bonuses are set by the V10 NY firms based on market conditions and firm performance. I'd be surprised if bonuses were 1/3 of what they were last year. I do think firms will give out a token amount though, if only to distinguish between high billers who met the threshold and low billers.
Last edited by QContinuum on Wed Apr 01, 2020 1:28 pm, edited 1 time in total.
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Re: "Cadwalader Cuts Pay [By 25%] Across The Firm To Weather Pandemic"

Post by Ultramar vistas » Tue Mar 31, 2020 3:22 pm

Anonymous User wrote:
Anonymous User wrote:
nixy wrote:
lawdude31 wrote:
nixy wrote:
PeanutsNJam wrote:Honestly, I'd 100% take a 25% paycut so long as there's also at least a 25% reduction in workload and I don't have to stress about getting laid off.

This is much better than surprise axing people in droves while the people who stay around get to continue working themselves to the bone.
But why would there be a 25% reduction in workload?
It seems like a lot of departments are slow right now.
That’s true, but it’s not something I can see firms actually endorsing (that is, making official in any way that hours expectations are now 25% less). It seems like you’d be stuck worrying about your hours just as much as ever.
There’s been talk at my firm about lowering the billable requirement to be bonus eligible for this year. Of course, no one has mentioned if the bonus would be smaller as well.
The bonus is definitely going to be smaller. Bonuses are set by the V10 NY firms based on market conditions and firm performance. I'd be surprised if bonuses were 1/3 of what they were last year. I do think firms will give out a token amount though, if only to distinguish between high billers who met the threshold and low billers.
I completely disagree. Although i understand a lot of law students don’t realize this, probably 2/3rds or more of the am law 100 have a bonus hours requirement which works precisely for this reason, protecting them from having to pay out in a down year. Take Vinson Elkins with it’s 2000 hour market requirement - how many of their attorneys will hit that this year? But they won’t actively state that they are lowering their bonus.

There’s a few firms out there that have historically given out excellent bonuses that will probably instead give out almost entirely market bonuses.

And maybe one or two firms will actively announce a no-bonus or reduced bonus policy.

But as a general rule, I would expect to see bonuses stay superficially flat from last year, and firms to rely on billable hour requirements to generally get out of paying out. Firms might be quieter about bonus announcements too, although by Christmas it shouldn’t be seen as too insensitive - hopefully the market is back on an upswing in 9 months.

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Re: "Cadwalader Cuts Pay [By 25%] Across The Firm To Weather Pandemic"

Post by Wild Card » Tue Mar 31, 2020 7:57 pm

JusticeSquee wrote:Cadwalader has, and always will be, a total and complete shithole.
One could say this about many firms: Paul Hastings, Shearman, Dechert, etc.

Likely, Cadwalader will conduct mass layoffs shortly. They just want to save some money in the meantime.

I'm more curious about places like Kirkland and Latham. Paul Weiss, also, just posted decreased PPP and RPL.

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Re: "Cadwalader Cuts Pay [By 25%] Across The Firm To Weather Pandemic"

Post by Anonymous User » Tue Mar 31, 2020 8:56 pm

At Kirkland -- I think we are somewhat better positioned than most huge firms because we have a large bankruptcy practice (and that practice spins off lawsuits that the litigators can handle, etc.). It's a significant difference between us and Latham.

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Re: "Cadwalader Cuts Pay [By 25%] Across The Firm To Weather Pandemic"

Post by JusticeSquee » Tue Mar 31, 2020 9:08 pm

Anonymous User wrote:At Kirkland -- I think we are somewhat better positioned than most huge firms because we have a large bankruptcy practice (and that practice spins off lawsuits that the litigators can handle, etc.). It's a significant difference between us and Latham.
Yeah Weil and Kirkland are uniquely positioned for a downturn such as this one. Both firms will make bank. The bankruptcy groups will bring work to litigators as well as some of the tax/finance folks.
Last edited by QContinuum on Wed Apr 01, 2020 1:27 pm, edited 1 time in total.
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Re: "Cadwalader Cuts Pay [By 25%] Across The Firm To Weather Pandemic"

Post by wwwcol » Tue Mar 31, 2020 9:10 pm

Ultramar vistas wrote:
Anonymous User wrote:
Anonymous User wrote:
nixy wrote:
lawdude31 wrote:
nixy wrote:
PeanutsNJam wrote:Honestly, I'd 100% take a 25% paycut so long as there's also at least a 25% reduction in workload and I don't have to stress about getting laid off.

This is much better than surprise axing people in droves while the people who stay around get to continue working themselves to the bone.
But why would there be a 25% reduction in workload?
It seems like a lot of departments are slow right now.
That’s true, but it’s not something I can see firms actually endorsing (that is, making official in any way that hours expectations are now 25% less). It seems like you’d be stuck worrying about your hours just as much as ever.
There’s been talk at my firm about lowering the billable requirement to be bonus eligible for this year. Of course, no one has mentioned if the bonus would be smaller as well.
The bonus is definitely going to be smaller. Bonuses are set by the V10 NY firms based on market conditions and firm performance. I'd be surprised if bonuses were 1/3 of what they were last year. I do think firms will give out a token amount though, if only to distinguish between high billers who met the threshold and low billers.
I completely disagree. Although i understand a lot of law students don’t realize this, probably 2/3rds or more of the am law 100 have a bonus hours requirement which works precisely for this reason, protecting them from having to pay out in a down year. Take Vinson Elkins with it’s 2000 hour market requirement - how many of their attorneys will hit that this year? But they won’t actively state that they are lowering their bonus.

There’s a few firms out there that have historically given out excellent bonuses that will probably instead give out almost entirely market bonuses.

And maybe one or two firms will actively announce a no-bonus or reduced bonus policy.

But as a general rule, I would expect to see bonuses stay superficially flat from last year, and firms to rely on billable hour requirements to generally get out of paying out. Firms might be quieter about bonus announcements too, although by Christmas it shouldn’t be seen as too insensitive - hopefully the market is back on an upswing in 9 months.
You’re totally wrong about the bonus. V10/20 will have to lower bonus because they don’t have hours requirements. The rest of the market will follow, even the ones who’d be insulated bc most people will not hit 2k hours this year

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Re: "Cadwalader Cuts Pay [By 25%] Across The Firm To Weather Pandemic"

Post by 2013 » Tue Mar 31, 2020 9:37 pm

Anonymous User wrote:
Anonymous User wrote:At Kirkland -- I think we are somewhat better positioned than most huge firms because we have a large bankruptcy practice (and that practice spins off lawsuits that the litigators can handle, etc.). It's a significant difference between us and Latham.
Yeah Weil and Kirkland are uniquely positioned for a downturn such as this one. Both firms will make bank. The bankruptcy groups will bring work to litigators as well as some of the tax/finance folks.

I keep reading about this and, while I think it’s true, I’m wondering how many layoffs even Kirkland will have to do given that it has been on an associate hiring spree the last few years. There’s no way bankruptcy can keep all of them busy, is there? Maybe there’s just that much work and I could be very wrong.

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Re: "Cadwalader Cuts Pay [By 25%] Across The Firm To Weather Pandemic"

Post by Hutz_and_Goodman » Tue Mar 31, 2020 9:53 pm

I think not only firms with strong and large bankruptcy practices, but large firms (firms with a lot of U.S. and international offices) will be well-positioned because there will be all sorts of class action/MDL litigation related to coronavirus.

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Re: "Cadwalader Cuts Pay [By 25%] Across The Firm To Weather Pandemic"

Post by jarofsoup » Tue Mar 31, 2020 10:31 pm

How do you cope at a place like Cadwalader and are in the bankruptcy group and billing 200 hours or more a month? I am not in this group but bankruptcy is going so nuts why take a pay cut to prop up some other group?

It seems like unless partnership is around the corner why not lateral?

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Re: "Cadwalader Cuts Pay [By 25%] Across The Firm To Weather Pandemic"

Post by LSATWiz.com » Tue Mar 31, 2020 11:07 pm

Hutz_and_Goodman wrote:I think not only firms with strong and large bankruptcy practices, but large firms (firms with a lot of U.S. and international offices) will be well-positioned because there will be all sorts of class action/MDL litigation related to coronavirus.
More companies will go bankrupt, but class actions are unlikely to be why. As someone whose day job is in class actions, this is the worst kind of disaster from a litigation standpoint. Who exactly can you sue? One firm brought a suit against the Chinese government, but it’s tough to say their delay in locking the country down was unreasonable at the time considering most countries had the same issue despite knowing what happened in China. And even if you win, how do you enforce a judgment against their government? Unless the free press pays off, this case has about a 0 percent chance of not losing money.

You will see some class actions against those “kills 99.9 percent of germ” claims that led to increased sales but these cases get a few million dollars, if that. You can’t really prove using hand sanitizer instead of soap caused x number of people to get the virus. There was a similar case during the Ebola spread that got hundreds of millions in punitive damages, but there was proven fraud there (they knew the product wouldn’t help stop the spread of Ebola but claimed it was Ebola proof), the risk was much worse, and the punitive damages were reduced to nearly 0 on appeal.

You could see class actions against insurance companies but unless a school or venue lifts the social distancing rules too early and causes an outbreak in their city, there really isn’t anyone legally at fault. Normally you have an oil spill or something a big company does to worsen a wildfire. There, you have someone to throw the bill at. If this were a war or terror attack, we’d theoretically at least be able to sue the country or terror group behind it. Some gyms and schools may get sued depending on how their their contracts are worded, but it’s very unlikely this leads to increased class actions.

If anything, existing class actions will be less damaging as many of the pharma companies being sued in the opioid cases and who routinely have the FTC come after them in pay-for-delay cases are supplying drugs at highly discounted rates or for free altogether. It’s going to be much harder to convince juries they are just greedy bastards who prioritize an extra buck over public health for some time. As a general matter, the defendant’s financial standing is a factor in determining the fund. You only see class actions driving companies into bankruptcy when a company epically fucks up (eg: lead paint; starts a 25 mile fire) or is already struggling and then has a nearly epic screw up (Takata airbag; GM ignition key). Here, no one epically fucked up though our government was clearly too slow to react but probably not slow enough to warrant legal action. While this pandemic sucks, there really isn’t anyone to blame. Those companies that go into bankruptcy will be bled into it by the economic shutdown.

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Re: "Cadwalader Cuts Pay [By 25%] Across The Firm To Weather Pandemic"

Post by Anonymous User » Tue Mar 31, 2020 11:24 pm

2013 wrote:
Anonymous User wrote:
Anonymous User wrote:At Kirkland -- I think we are somewhat better positioned than most huge firms because we have a large bankruptcy practice (and that practice spins off lawsuits that the litigators can handle, etc.). It's a significant difference between us and Latham.
Yeah Weil and Kirkland are uniquely positioned for a downturn such as this one. Both firms will make bank. The bankruptcy groups will bring work to litigators as well as some of the tax/finance folks.

I keep reading about this and, while I think it’s true, I’m wondering how many layoffs even Kirkland will have to do given that it has been on an associate hiring spree the last few years. There’s no way bankruptcy can keep all of them busy, is there? Maybe there’s just that much work and I could be very wrong.
I’m at one of these places and it’s hard for a non-restructuring person to understand how much work gets thrown off in a restructuring, especially on the debtor side. Many months of hemming and hawing as they try every conceivable option to manage liabilities and then a filing followed by an actual restructuring of an entire capital structure. Bankruptcy team itself can have 10+ lawyers depending on the deal, and then there will be bank finance, capital markets, litigation, tax and M&A, plus variety of others each with full teams as if running an ordinary corporate transaction, with each running full steam ahead throughout the process. Not saying there isn’t some fat to trim, and I do wonder what those who refuse to get involved in restructuring work will do, but bankruptcy really does largely keep things afloat during bad times.

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Re: "Cadwalader Cuts Pay [By 25%] Across The Firm To Weather Pandemic"

Post by Anonymous User » Wed Apr 01, 2020 12:16 am

Anonymous User wrote:At Kirkland -- I think we are somewhat better positioned than most huge firms because we have a large bankruptcy practice (and that practice spins off lawsuits that the litigators can handle, etc.). It's a significant difference between us and Latham.
This is a weird comment considering Latham’s bankruptcy group has been going gangbusters for the past year + and is now pretty firmly the #3 shop behind Weil/KE.

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Re: "Cadwalader Cuts Pay [By 25%] Across The Firm To Weather Pandemic"

Post by LaLiLuLeLo » Wed Apr 01, 2020 12:29 am

Anonymous User wrote:
Anonymous User wrote:At Kirkland -- I think we are somewhat better positioned than most huge firms because we have a large bankruptcy practice (and that practice spins off lawsuits that the litigators can handle, etc.). It's a significant difference between us and Latham.
This is a weird comment considering Latham’s bankruptcy group has been going gangbusters for the past year + and is now pretty firmly the #3 shop behind Weil/KE.
looooooooooool

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Re: "Cadwalader Cuts Pay [By 25%] Across The Firm To Weather Pandemic"

Post by Dunnkirk85 » Wed Apr 01, 2020 7:49 am

It seems odd to assume that Kirkland, Weil, and other firms mentioned here are completely insulated from what is essentially a full economic shut down due to their bankruptcy practice. Kirkland hired what, 250 associates just in 2019 according to ATL? This hiring level goes back 5 years, and keep in mind firms like this just bumped salaries recently at all locations. While these firms have substantial bankruptcy practices, can that alone support 4-6+ months of this given all of the associate bloat we see in huge firms? This situation hasn’t been seen before so I wouldn’t assume any one firm is safe. It comes down to bottom line and it will be hard to justify paying every associate full compensation at any firm if the economy is fully shut down until July or August.
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Re: "Cadwalader Cuts Pay [By 25%] Across The Firm To Weather Pandemic"

Post by JusticeSquee » Wed Apr 01, 2020 8:12 am

Anonymous User wrote:It seems odd to assume that Kirkland, Weil, and other firms mentioned here are completely insulated from what is essentially a full economic shut down due to their bankruptcy practice. Kirkland hired what, 250 associates just in 2019 according to ATL? This hiring level goes back 5 years, and keep in mind firms like this just bumped salaries recently at all locations. While these firms have substantial bankruptcy practices, can that alone support 4-6+ months of this given all of the associate bloat we see in huge firms? This situation hasn’t been seen before so I wouldn’t assume any one firm is safe. It comes down to bottom line and it will be hard to justify paying every associate full compensation at any firm if the economy is fully shut down until July or August.
I don’t think anyone is assuming that Weil/Kirkland will not have to make any cuts to associate ranks. Both firms will make cuts. I think all we are saying is that the firms are financially healthy and likely will remain in a strong financial position through this recession. Many associates at Kirkland across a number of groups (corporate, real estate, etc.) will be cut in the coming months. I would not be surprised if there’s more no-offers than usual for summers as well.

All that being said, I think that Kirkland/Weil make less cuts to associate ranks than peer firms as a result of strong debtor-focused bankruptcy groups that have dominated the market for the past 5 years (if not longer).
Last edited by QContinuum on Wed Apr 01, 2020 1:27 pm, edited 1 time in total.
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