<p>When most biglaw firms lay off attorneys (which occurs a lot more often than you might think this time of year), they typically try to keep the layoffs quiet and under the radar (“We think it’s time that you sought new employment opportunities, as we don’t see a future for you here at [BIGLAW]. You can stay here and continue to use your office until [March 31], after which we expect you to move on.”). Often, these types of messages are given without warning and without any prior history of poor performance by the attorneys receiving the unwelcome news. Fortunately, these associates are often able to find employment somewhere, somehow, within the few given months (though perhaps at a less prestigious or lower paying firm/job), assuming that every biglaw firm is not laying off attorneys at the same time (which actually occurred in 2000/2001 and in 1992), so that attorneys need not disclose the exact circumstances of their departure from the laying off law firm. In fact, the firm laying off the attorneys prefers it that way. </p>
<p>Today, Cadwalader Wickersham & Taft, an old school, white shoe, NYC biglaw firm publically announced layoffs in the following press release:</p>
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<p>My understanding is that there have been some quiet layoffs at this firm in recent months in addition to the layoffs included in this announcement. While I applaud Cadwalader’s candid announement, I think that it reflects the uncertain economic times in which we are living.</p>
<p>My point is simply that you cannot assume that even if you are able to get a job at biglaw coming out of law school that you will be able to keep that job for as long as you would like. These layoffs could have financially disastrous results for the attorneys involved. Again, go into law school with your eyes open and always keep your options open.</p>
<p>and another thing people need to consider – not only does this have a great impact on the individual attorneys who are asked to leave, but it impacts the work environment for those who are still there. </p>
<p>because so many people who are contemplating BIGLAW are so used to having been successful in life, i think it is too easy for them to think that they will be spared the pitfalls that will befall others who just aren’t “as good.” when you see colleagues whom you respected leave without having “seen it coming,” it can be pretty unsettling even if you yourself are still inundated with work (the traditional law firm measure of merit).</p>
<p>I don’t think anybody at the firm failed to see this coming. The only question seems to have been when it would happen, a question that was probably killing moral.</p>
<p>What I’m hearing is that this was an unforeseen blow, particularly since there was already some quiet bloodletting that had occurred. Have you heard otherwise?</p>
<p>Thirty-five associates are being given the boot out of 254 associates in NYC, or about 14% of all NYC associates (assuming that all of the layoffs come out of the NYC office, which cannot be confirmed yet). I have to assume that most of the associates who will be “let go” will come out of the slower practice areas. In any event, unbelievablem is absolutely right that these layoffs are morale killers. I’ve seen these types of layoffs occur before and even for those who are spared, the question becomes “Am I next?”. </p>
<p>The scary thing is that in 2006 and 2007, Cadwalader was named one of the most profitable law firms in the U.S. by the American Lawyer (a well respected industry publication).</p>
<p>All of the associates laid off were either in capital markets or global finance. It’s no mystery as to why. A lot of firms with large capital markets and structured finance practices either laid people off (e.g. Thatcher Proffitt, Clifford Chance) or offered severance packages to entice people to leave (e.g. McKee Nelson). I doubt many people in different practice groups are wondering if they’re next. </p>
<p>Again, layoffs are a morale killer, but when the department is obviously in deep trouble (several incoming capital markets associates were transferred to litigation because there wasn’t enough work), it’s not necessarily better to keep everyone on board feeling like they have an ax hanging over their heads while the practice group continues to circle the drain.</p>
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<p>The scary thing may be how determined the partners are to maintain that profitability. They probably could have laid off fewer people if they’d been willing to take the (likely temporary) financial hit themselves.</p>