Nationwide Layoff Watch: More on the Cadwalader Carnage
(And a fresh thread for your comments.)

Cadwalader Wickersham Taft new logo CWT AboveTheLaw blog.jpgBack to the big story of the day: the massive lawyer layoffs, almost in the triple digits, at Cadwalader, Wickersham & Taft. We thought now might be a good time to put up a fresh post, since the prior thread is getting a bit unwieldy (with 200+ comments — selected excerpts, after the jump).
So what’s there to add to the story? Let’s see…. Cadwalader issued a statement in response to our inquiries. It’s not terribly exciting — most of it repeats what CWT told the WSJ — but you can check it out, if you’re bored, after the jump.
We’re not career counselors, but you don’t need to be an expert to know that CWT is probably best avoided for the upcoming round of fall recruiting / on-campus interviewing. Generally you should run away from, not into, burning buildings (unless you’re a firefighter).
If for some reason you are still interested in working at Cadwalader — well, good luck with that. The firm is withdrawing from on-campus interviewing at a number of law schools. E.g., Rutgers – Newark (memo after the jump). The Rutgers memo states that CWT “will contact students independently to schedule interviews if they are selected.” In other words, don’t call them; they’ll call you.
Cadwalader cutting back on OCI isn’t terribly shocking. The firm has less manpower to cover fall recruiting, having laid off so many lawyers. It probably wants to reduce expenses related to fall recruiting (which can be a costly process for firms, especially if overnight travel is involved). And maybe the firm has concluded that the last thing it needs right now are more people on its payroll.
Finally, here’s a little tidbit we received by email:

At CWT in Charlotte, the attorneys who were fired came in this morning to find envelopes on their chairs breaking the bad news. Dicey move.

Dicey? We’re not so sure. The ginormous layoffs are already a PR disaster — and Cadwalader arguably wants to make itself seem like a less appealing place to work, at least in the short term.
But classy? Not very.
Remember, there’s more stuff after the jump: highlighted comments from the last thread, Cadwalader’s official statement on the layoffs, and an example of a law school career services memo announcing CWT’s withdrawal from on-campus interviewing.

To capture the flavor of the discussion, here are a few representative remarks — most from critics of the firm, a few from defenders — taken from this Cadwalader comment thread:

Wow. Anyone who was thinking of lateralling from their firm just got 96 other resumes to contend with.

White actually used the term “fungible”? Ew buoy. Go work for a slip-n-fall before you interview at CWT, kids.

Awful. I’d take a job anywhere other than Cadawalder after this….including McDonald’s.

Like Bear Stearns, like Fannie and Freddie, CWT overspent and acted like they could keep up with the big boys, when in reality the emperor wasn’t wearing any clothes. Employees picked an unstable firm for the present $ rather than the future sustainability. No sympathy here.

Hindsight is 20-20, hater. You really think that some kid doing on campus interviews his 2L year can reasonably be expected to do research beyond Vault, Infirmation and word of mouth? You are delusional… It could have been anybody. That is, anybody qualified to work for what has generally been a solid V50 firm. Judging from your bitterness, I doubt that group includes you as a member.

As someone heading into OCI, I really hope this isn’t me in a few years, but why do people expect a firm to take a financial hit by holding onto attorneys it doesn’t need? Or, why shouldn’t a firm expand quickly to meet needs even if it is just a bubble?

[R]ightly or wrongly, this “business plan” is making for some terrible PR, not only among potential hires, but also likely among clients. And it can’t be doing wonders for morale inside the firm.

Um, word of mouth has bashed CWT for quite some time. Unless these kids are Amish recruits, they should’ve known. As Vault makes clear, “Change our name from CWT to PPP.”

What about the fact that all those fresh-faced, soon to be first year associates are all on their second day of the bar exam? I can’t imagine my stress levels if I was going to CWT, had a crappy first exam day, then woke up to this news…

This is rather shocking. 100 lawyers. That’s 15% of their entire firm. Unbelievable. Litigation is always the smarter choice–attracts smarter people also.

This generated a side discussion on litigation vs. transactional work, which we’re not going to excerpt because it’s off-topic.

How real is the prospect that CWT will completely shut down it’s Charlotte office? I know they have been slowest of all the offices.

I’ve heard talk of CWT completely leaving Charlotte. I wouldn’t be surprised. They’re not generating any work here, it’s all servicing their other clients, from what i’ve heard.

I worked with CWT lawyers on many deals and always got the impression that the place was a sweat shop. Everything was cobbled together at the last minute, paralegals and junior associates ran the deals, nobody knew what was going on. When the music stopped and the whole frantic dance was over, things probably fell apart quickly.

Terrible PR, and for the long term profitability of a company that requires talent, this hurts badly. Good talent is hard to find, so a firm needs to make itself as desirable as possible, and contracting and expanding with the economy, to this degree, looks terrible.

Terrible PR, indeed. In connection with this story, we had dealings with Hill & Knowlton, Cadwalader’s outside public relations firm. We could say more about how they weren’t aboveboard with us, but we’ll leave it at that. After all, being a little misleading is arguably part of a PR person’s job description.

I advise the laid-off CWT associates to pool their capital and talents together in order to establish a rival structured finance firm. Rainmaking will be tough at first, but the vengeance, once attained, will be sweet.

“[A]t the third, fourth and fifth years, lawyers aren’t fungible” – really?? I find it hard to believe that a corporate or real estate third year with the type of law school credentials a firm like CWT requires couldn’t be taught to be a litigation associate. How hard is it to teach writing, research, and document review skills? It’s not like CWT midlevels or running their own trials or anything that would require real litigation experience.

CWT’s Bankruptcy department is slow and bloated as well. Next stop is the capital call on the partners. My prediction: 12 months CWT won’t exist.

Maybe the feds should bail out CWT like it will the rest of the industry. If the taxpayers have to subsidize (and thus encourage) poor performance, why not include law firms.

CWT’s real problem is that litigation, corporate and bankruptcy are already overstaffed and slow. You can’t move the associates to other departments.

This blows. I wish these people the best of luck. Man, how the mighty have fallen.

Where to lay the blame?

Partners at many firms SUCK at management. They couldn’t manage their way out of a box. I mean, I used to think my managers when I was on the non-law side were bad; then I get into law and see the “flat” management style of firms def has major drawbacks. CWT made some really bad choices getting highly leveraged in a low margin, very risky (in hindsight) industry.

What’s sad is that this is the oldest law firm in the US and it was poor management that lead to this downfall, not market conditions.

CWT’s business strategy was to run ahead of a steamroller and pick up quarters.

Everyone is hurting in corporate law but the mismanagement of CWT is breathtaking. Hiring several private equity partners in Feb. ’08 and bankruptcy partners with no business in ’07 (all with huge guarantees) has not helped matters. This disaster is CWT specific.

Finally, near the end of the thread, there was a rather funny exchange:

As the wife of a CWT summer associate I am freaking out. I need some questions answered! If he gets an offer do you think he should take it? They’re supposed to give offers after the internship is over at the end of next week. Can you please rank the top NYC lawfirms and include CWT on the list so I can see where it was and where it is now after the layoff? Why is it so hard to get a job with another firm if you’re a 3L? Don’t they do interviewing again?

[Y]ou sound like a mother not a wife.

RELAX. Your husband knows all about the stuff you’re freaking out about now, and he’s probably even more upset than you are.

[You] should’ve married a real man.

The wife-commenter’s response:

205 – I did marry a real man you SOB. Why don’t you get a REAL JOB instead of having time to post on the internet all day. 208 – I’m not his mother fool.

Good times, good times.
There has been a very significant slowdown in the real estate finance and securitization markets, beginning roughly a year ago, which continues unabated. With CMBS issuance down 82% in 2008, it appears that the real estate finance and securitization businesses will remain slow for the foreseeable future.
Cadwalader has adapted to this market reality with targeted personnel reductions affecting 96 lawyers in our US and UK offices.
We regret the loss of these lawyers, who are talented professionals and have served the firm well.
It is important to keep these reductions in perspective. This action affects an important, but nevertheless discrete part of the firm’s practice — real estate finance and securitization. From 2003-2007, when CMBS issuance tripled, the firm grew rapidly to meet client needs. With CMBS issuance now at a small fraction of previous levels, we are making these personnel adjustments in response to this change in demand. In September 2008, the firm will have 580 lawyers, the same number we were in January 2006.
The rest of the firm remains robust, with expansion into new areas and growth in existing practices, and we will still have substantial capabilities in capital markets and real estate finance. We will continue to provide the superlative client service and astute legal counsel for which we are known and are confident of the long term strength of the firm.
Subject: OCI Updates
From: CareerDevelopment
Date: Tue, July 29, 2008 11:48 am
Classes of 2009 and 2010,
As you may have seen by now, Symplicity is showing firm selections for those employers in Session One whose interview choices have been entered into the system. Your invitation status for each employer will read one of the following:
preselect – you have been selected for an interview
alternate – you are on the wait list and will be contacted by our office if you are moved into an interview slot
not invited – you have not been selected to interview with this firm
pending – the firm’s selections have not been entered into the system
The interview schedule will be automatically generated once the selections for ALL Session One employers have been received by our office. Please remember that students cannot select or change their interview times for Session One interviews.
Also, please note that Cadwalader, Wickersham & Taft LLP, scheduled to interview on campus on August 13th, has had to cancel and will contact students independently to schedule interviews if they are selected. We hope to have the full interview schedule for Session One available by early next week.
As always, please let us know if you have any questions.
Office of Career Services
Rutgers School of Law — Newark
Center for Law and Justice
123 Washington Street
Newark, New Jersey 07102
Earlier: Breaking: Cadwalader Announces Layoffs of 96 Lawyers!
Nationwide Layoff Watch: Is Today ‘Layoff Day’ at Cadwalader? (Redux)

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