What's Going On at Thacher Proffitt & Wood?
That's what many of you have been wondering, in emails to us and in comments. We've investigated the situation at Thacher Proffitt & Wood, and we now bring you this detailed report.
We'll start off with the big rumors:
1. Thacher Proffitt laid off additional associates earlier this week.
The firm's response: "As always, we continue to talk to associates in the areas most affected by the market conditions."
Sounds a tad Orwellian, and suggests that some additional reductions in the associate ranks did in fact take place (since it's not an outright denial). But we don't have any details, in terms of numbers of lawyers affected, departments, severance, etc. If you do, we'd love to hear from you.
2. TPW is delaying the start date for the incoming first year class until late October (which may need to be extended until January).
Partly true, partly not. From the firm: "The start date for incoming litigation associates remains the same. The start date for others has been moved to October 20th."
3. The White Plains office is being closed.
The firm denies this outright: "The rumor related to our White Plains office is not true."
More detailed discussion about the situation at Thacher Proffitt -- which sounds rather grave, according to the former, current, and future TPW lawyers we heard from -- after the jump.
1. Thacher Proffitt laid off additional associates earlier this week.
From one source, in structured finance at TPW:
These cuts are in addition to those made in February -- yes, there were cuts in February -- and those made last year. I suppose this is pointing out the obvious, but the partners have pretty much lost all credibility with the associates. Needless to say, the already depressing and negative atmosphere at the firm is worsening.
"The firm is in bad shape," reports another source. Recent defections include significant portions of, if not all of, the Latin America practice, the D.C. banking practice, and the mutual fund group.
The big problem, of course, is that securitization work -- a mainstay of the firm -- hasn't picked up (and shows no signs of picking up in the near future). One major securitization rainmaker, responsible for roughly $15 million a year in business during the recent boom, has generated only a few hundred thousand dollars in billings in 2008 thus far.
"They're regretting that they didn't lay off more people," says our tipster, who pegs the associate layoffs as affecting somewhere between 30 and 60 lawyers. "The number should have been closer to 90." In addition, the securitization group is overstaffed with junior partners, who may be "de-equitized" and / or encouraged to leave.
The firm is considering all kinds of strategic options, including merger -- but who would the suitor be? -- and yes, even dissolution. Executive summary: "Associates are scared s**tless."
2. TPW is delaying the start date for the incoming first year class until late October (which may need to be extended until January).
Apparently 2007 summer associates at Thacher got calls from partners earlier this week about their start dates. As the firm confirmed, the non-litigation associates now have a start date of October 20 -- "but with the reservation that it could be pushed back even further, possibly to January 2009," according to the recipient of one such call.
Continues our tipster:
There was a lot of talk about "if you find a better opportunity," which seems a lot like an implication that we should be looking for another job. It's April, and I graduate in a month, so it seems a little late in the game to be telling us that our jobs are up in the air.Is this happening at other law firms? And where the hell am I supposed to find another job at this point? I'm at [a top law school], so I easily could have reinterviewed if I had known about this in the fall, but they've really been stringing us along and downplaying the problems at the firm.
With respect to the questions raised by our tipster, some incoming Thacher associates are networking in search of opportunities. But this isn't the best time to be looking. From another source, not at the firm:
I'm an associate who received two separate calls from 3Ls at my old law school, who I know. Both were due to join TPW in the fall, but had received calls from TPW in the last day or two saying that the particular group they were going into.... is very slow, with no pick-up in sight, and so they were encouraged to apply elsewhere. [T]hey still have an offer to go to TPW if they want, it's just that they are being strongly encouraged to go elsewhere.They were calling me, in part, to see if my firm was hiring 3L's. I checked with HR for them, and they are not.
3. The White Plains office is being closed.
As noted above, the firm has denied this rumor. But here is what we heard from one source:
Rumour has it that TPW is closing their White Plains office and laying everyone off. This is evidenced by the fact that one of their litigation partners in WP, Kevin J. Plunkett, recently left to go across the street (from 50 Main Street to 1 North Lexington) and work for a lesser known New York firm, DelBello, Donnellan, Wiese & Wiederkehr (though they are THE preeminent powerhouse White Plains firm, representing developer Louis Cappelli, [along with] other White Plains power brokers, politicos, and other goobersmoochers).A second tipster offers us more color about the White Plains office. This source, who also claims that TPW has slated the office for closing, reports that the defection of Plunkett -- a well-connected former law partner of ex-Governor George Pataki, who appointed him to the board of the New York State Thruway Authority -- was "a big deal."Already Plunkett's abrasive style has ruffled more than his fair share of [feathers] during his short tenure.... I guess you're allowed to piss people off when you walk 2 million bucks in billing right across the street.
Adds this source: "[Thacher] also put a lot of money into the White Plains office. It's very fancy, with a kick-ass bar on premises. Not surprising, since it used to be the offices of Heineken."
Our advice to Thacher lawyers, current and future: Go out and buy yourself a few cases of beer. Drink them. Things will be better that way.
Earlier: Prior ATL coverage of Thacher Proffitt & Wood (scroll down)
(63) Comments
maybe they should cut "profitt" out of their name
I was first to turn down my offer from TPW
Maybe this is their problem, interviews like these:
http://www.youtube.com/watch?v=bcaVSTsYyOI&feature=related
i have a feeling TPW is just the tip of the layoff iceberg...
Any information about other securitization heavy firms? Is CWT done with layoffs? What about McKee?
The could merge with CadLOLader.
What a piece of shit firm.
Goulston & Storrs is handing out pink slips today.
Those of us who went to the V5 of Biglaw, who were mocked for picking a firm with nothing but its name to distinguish it from other smaller, gentler firms like TPW that supposedly paid the same for less pressure and hours, are now looking at those who worry about their jobs with a mix of pity and head-shaking.
NY to 19... oh, nevermind.
What's up with SONNENSCHEIN?
Looks like Lat has lost interest in the lame "Law Firm March Madness" conceit now that it's apparent that no one thinks his old firm Wachtell is "cool".
Kashmir is running March Madness, not Lat.
The choice to work in a V10 sweathshop looks more and more like the choice to remain employed.
12:47: hope that V5 isn't Skadden. They will make cuts.
"Those of us who went to the V5 of Biglaw, who were mocked for picking a firm with nothing but its name to distinguish it from other smaller, gentler firms like TPW that supposedly paid the same for less pressure and hours, are now looking at those who worry about their jobs with a mix of pity and head-shaking."
but see s&s- wich was ranked something like 6 or 7 before they had their layoffs.
JT thinks the White Plains/S.D.N.Y. Federal Court at 300 Quappororoooz...whatever the fuck is quite nice.
Greenburg Traurig laid off 4-5 real estate "under performing" real estate associates in its NYC office this week.
What's Goulston and Storrs?
As a laid off associate from TPW, I hope the firm joins the titanic at the bottom of the FUCKING ocean.
TPW to bankruptcy
Haha @ 1:10: In that case, I hope you know where I can find another job. I'd like to watch them go down in flames too, but I'd like to do it from the comfort of a secure job.
Goulston & Storrs is a Boston-based firm that is well-known for its real estate practice.
It's not a good sign if they are doing layoffs because they are much less profit-focused than many other firms that are currently throwing down the ax.
Goulston & Storrs is not well-known in any circles, except perhaps residential closings.
1:05 is spot on - Shearman was a top firm before they laid off a huge number of associates in an effort to keep their sinking PPP above 1M (the benchmark in those days) - the economy was sucking and instead of having the fat partners take a bit of a hit, they killed the careers of many associates.
In this market, the safe people are the ones that are valueable to their practices - Firms are more inclined to "trim the fat" whereas they are willing to keep the bottom feeders around in a booming market.
1:26 - i'd start looking now. You can't lateral to a new firm as a first year. Best shot is to nail something down as a 3L.
1:38, if you have the right credentials, you can easily lateral as a first year.
If you choose to work at a cesspool like TPW, then you get what you deserve. Highly leveraged, have large practices in junk areas like structured finance... it is pretty much like CWT without the "reputation."
Thacher Proffitt clearly is out of the V100 - which firm takes its place?
When will everyone figure out that litigation has always been and will always be the most stable practice area. Whether it is as profitable as M&A isn't the issue. Name the last time litigation was "slow." Large litigation practices = stable firms. Large fringe practice areas like structured finance = roller coaster ride for associates.
To 1:38
You can lateral as a first-year; I did it, and so did several of my colleagues. It's just not as easy as lateralling as a more senior atty.
1:03, if you think Skadden is going to make cuts, please speculate on the practice areas/offices where cuts would occur. I don't think they laid people off during the last slow down so I doubt they would now. But I'm always up for some speculation.
TTTPW. I can't believe I was the first to post that. I am such a loser.
You can't blame some partners for not "valuing" associates. The first sign of trouble, and your associates "hope the firm joins the titanic at the bottom of the FUCKING ocean" and would "like to watch them go down in flames".
It's a freaking business! What do you expect them to do? Keep everyone with ZERO billable hours and pay them $160K-170K? Because that is really what it is with securitization and MBS now!
Didn't mean to suggest massive layoffs, just fat trimming. Just going off nalp for New York, big groups that have to be slow right now with numbers of partners/associates.
Banking & Institutional Investing: 13/52
Corporate Finance: 12/40
Financial Institutions Group: 5/15
Investment Management Group: 7/22
Mergers & Acquisitions: 45/97
Real Estate: 12/29
Structured Finance: 10/25
There's no way they have enough work to keep all these people busy. Some could get moved into restructuring, but these groups are too big to just float. They won't have layoffs. They'll just give a few more people the talk, same as all leveraged NY firms do in bad times.
i still have the cover letter i wrote to TPW saved on my computer. they were actively looking for real estate associates in NY just at the start of this year. i'm really, really glad they never got back...
Anyone remember Altheimer & Gray? TPW sounds like Altheimer, part deux.
Hell hath no fury like a partner with profits reduc'd.
3:24:
every once in a while when interviewing in boston you run into an associate who lateralled to his firm from "Hill and Barlow," a firm that had been around SINCE 1895 but recently dissolved. TPW could be next??
http://en.wikipedia.org/wiki/Hill_and_Barlow
re: 1:49, you clearly have no idea what you are talking about.
what should a 3L headed to TPW do?
4:45 :
Same thing the rest of us are doing: Pray.
tpwned
5:24 --
You win this thread. The rest of us can stop typing now.
Goulston & Storrs is not handing out pink slips. Also they are a commercial real estate firm (not residential) and they are still posting for commercial real estate associates.
CWT is next in line for another round of (massive) layoffs. Just like Thacher, they are heavily concentrated in the structured finance and real estate practice groups. They did not lay off as many people as they should have in January. 35 or so were let go and maybe another 10 received the stealth firing treatment. This reflected an estimate of a 50% drop in business. In realty, deal flow has dropped off something closer to 90-95%. CWT has close to 70 too many associates. Right now, there are dozens of associates who have been sitting around doing nothing since January. I highly doubt this will continue through the year. Be forewarned!!
9:20: In addition to the 35 layoffs, didn't they also relocate another couple of dozen associates to other practice areas? Wouldn't that be enough for them to weather this storm?
sigh. maybe i should just go ahead and shoot myself. or no, maybe i'll just go get drunk with a bunch of law school kids turned softball players. yup, that sounds like a good solution.
Perhap the reason why TPW is going under in westchester is because the head partener behaves like this:
http://www.youtube.com/watch?v=3JXoSway7uo
Reed Smith has a very sizable real estate practice, mainly in CA, London and Philly, and their real estate group is only down 10% for the year. Some deals are coming in now so they expect to ride the storm out. Makes no sense to lay people off if you only have to hire someone again in 6 months. Of course some folks with bad performance during the boom years may be in trouble. Also, instead of laying people off they canceled the firmwide all-attorney meeting - that alone saved about $5M.
mexico gone -- no worries. Reality check: in times like these good people will leave to protect themselves and those who have the most to fear will get out while the gettings good. TPW may continue to shrink in size and the collateral damage may be heavy, but those of you who are so intent in perpetuating the rumors of death should take a good hard look at your own bleeding hands.
9:28 - CWT is firing all over the firm, after having told themselves, the market will return in the 2nd Q of 2008. It's the 2nd Quarter, the market hasn't returned. They only parts of CWT that is making money are the independent sub-groups that they've brought in from other firms over the past few years. There is no work in the firm otherwise. Expect still more MASSIVE lay-offs at CWT.
Can CWT survive? It sounds like the degree of layoffs is staggering. If you piece together all of the various rumors/reports, it looks like they may be laying off somewhere between two and three hundred lawyers (partners and associates). Even the thriving groups would seem to be looking for an exit strategy considering that others will be trying to leach off them. Sounds like the classic definition of a death spiral may already be underway.
1:54 -- What were those Finnegan guys thinking when they went to Cadwalader? I'm at an IP firm and I intend to stay put. GP firms may pay a little better bonus during good times, but IP is basically recession-proof -- why expose yourself to the ups and downs of markets you know nothing about. That seems to be what those patent guys who went to Cadwalader did. Strange, it was clear a year ago there was a subprime meltdown and Cadwalader had half its business in subprime. I guess I can pat myself on the back for being a "patent droid."
Other firms are suffering as well. The top dogs at Milbank told all the summers that the economy is "in shambles". Work is definitely slowing down.
2:19 - the patent team, as well as other independent sub-groups at CWT, came over because of CWT's eat what you kill system. I don't know a lot about that Morgan Finnegan team, but they almost certainly went there to enjoy the eat what you kill profit system. Still, in light of what has happened to CadLOLader over the past 8 months, it was probably a horrible decision. That team should have stayed put at Morgan Finnegan, which although has not exactly done well recently, has not seen its core revenue maker completely disappear.
9:28 - There were numerous associate transfers at CWT to other departments at about the same time as the layoffs. However, even with the transfers, layoffs and stealth firings, there are still DOZENS UPON DOZENS of associates sitting around doing NOTHING. Many of these associates have not billed more than 50 or 100 hours since the beginning of the year.
CWT will not and cannot allow this to continue much longer. Unless the securitization dealflow bounces back IMMEDIATELY, there will be another round of massive layoffs in order to clean out the remainder of the RMBS, CMBS and real estate finance groups (the CDO group has already been decimated). My prediction: 20-30 associates are cut before the beginning of the summer.
Oh the poor summers. What bad timing.
5:45 your analysis of CWT's predicament is accurate, but incomplete. When times were good, the firm was using the revenue generated from the Cap Marks practice to prop of the rest of the firm, which had been slow and continues to be slow. Some litigation partners have bolted for other firms in the past few weeks. Prediction: CWT's lay off will affect practice areas that had previously been characterized as "unaffected" by current market conditions.
Don't forget also that the firm was and is highly leveraged.
CWT to chapter 11.
Perhap the reason why TPW is going under in westchester is because the head partener behaves like this:
http://www.youtube.com/watch?v=3JXoSway7uo
I don't think it's terribly surprising that hardcore Securitization shops are laying off associates. CWT made a lot of revenue these past few years didn't it? Perhaps they can use some of that to strengthen other practice areas? It will be interesting to see what they decide to focus on next.
Let us all hope that the economy picks up soon. Remember that layoffs are affecting people outside of the legal profession as well. This is a mess for everyone.
test
Kevin Plunkett hasn't been a partner at TPW since the beginning of the year. Either way, he wasn't letting some old man make up stories.
Now that Kevin left, Can Thacher Proffitt Without Plunkett?