Associate Life Survey: Life After Lehman Brothers?
As the Fed steps in to save the financial world with a bridge to nowhere AIG, we pause to reflect on the results from Monday’s ATL / Lateral Link survey, which asked whether the woes of Lehman Brothers and Merrill Lynch would hurt your career.
We received 830 responses, and quite a few of them looked like this one:
It’s the end of the world.
Overall, 42% of practicing attorneys said the demise of Lehman Brothers and Merrill Lynch would hurt their careers, which is way up from the 27% who said the same about Bear Stearns back in March. Law students are even more concerned, with 50% of 3Ls, 68% of 2Ls, and 63% of 1Ls feeling fearful.
While a third of New Yorkers were afraid about the impact of Bear Stearns back in March, the more recent collapses have frightened 55% of the Big Apple’s Big Law respondents. In fact, fear has risen dramatically in every market:
Responses by market: Are you afraid that the recent collapse will hurt your career?
City/Region | & Lehman Brothers | Bear Stearns |
| Austin | ||
| Dallas | ||
| Miami | ||
| Boston | ||
| Houston | ||
| Washington, D.C. | ||
| Bay Area | ||
| Chicago | ||
| Los Angeles | ||
| Philadelphia | ||
| Atlanta | ||
| Charlotte | ||
| New York |
Additional discussion, including selected comments from survey respondents, after the jump.
Roughly 43% of practicing respondents and a majority of law students fear the overall impact of a weakening economy. Some expect that fewer deals will mean fewer lawyers:
While it may result in a short-term increase in litigation and bankruptcy work, in the long term, deals will be down. Also with fewer players (through consolidation, merging and bankruptcy) means fewer lawyers needed in general.
Others expect that weaker budgets will mean lower billables:
As the economy continues to tank, our clients grow increasingly less lenient with the number of hours and rates charged for various services. While in a strong market clients prize quality over expense, in these less fruitful times, clients are placing greater value on lower costs.
Or, put simply:
Less work.
Even less work.
Less work = fewer billables and less training
Less demand for lawyers == lower bonuses.
As work dries up, firms have to lay people off.
Several respondents noted that their firms will be directly hit by the fall of Lehman Brothers or Merrill Lynch. A number commented that either Merrill “is a big client of the firm” or “is one of our best clients” or “Merrill is our biggest client. Was.” Others lamented that “so many of my clients were partnered with or borrowed from Lehman.” And one respondent sums it up on a personal note:
Three of my firms biggest clients have disappeared this year! We may still be able to get some work from contacts that stay on after the merger, but that’s most likely going to take some time. What the fuck do I do in the meanwhile?
As has so often been the case this year, structured finance associates are the most troubled, with 80% expecting the recent turmoil to hurt their careers. It just got even harder to be one of the Cadwalader 96:
This is just the beginning of a general decline in New York. A few firms will pick up business from the trainwreck that is Wall Street but overall this is a huge negative. And for me it’s worse, as I am one of the “Cadwalader 96”. It’s already tough finding a job. Now we have the entire in-house department of Lehman (no severance there to rely on), and eventually whatever redundancies BofA deems there are in Merrill. BAD BAD BAD.
But misery loves company, and securities. 79% of securities associates, and half of general corporate associates are also afraid of the impact on their careers. M&A and energy lawyers also worry about the impact of “tighter credit markets,” with about two thirds of each group expressing concern. 69% of real estate attorneys are also worried, and 56% of tax attorneys fear that slower deal flow will mean less tax work, even though others claim that “Tax never stops.”
And one antitrust lawyer laments that “Less market stability = fewer mergers = fewer anticompetitive mergers for us to defend.”
But the recent demise of financial titans has not killed hope across all practice groups. Roughly two thirds of trusts & estates attorneys remain optimistic about their careers, no doubt expecting that death will continue even if Lehman Brothers doesn’t.
And litigators (73%), patent lawyers (82%), and bankruptcy lawyers (93%) provided a thorough analysis of why they expect their careers to live on after Merrill Lynch:
Litigation
Patent Litigation
More bankruptcy lit.
Litigation!
Litigator baby
Patent litigator, baby.
Patent litigation, son.
I’m in litigation!!
And a couple went on to say even more:
I am in consumer financial services litigation, and when Wall Street devours itself in its own greed, consumers look for someone (else) to sue. They generally find my non-Wall Street clients, and thus the class action is born.
Churn equals business, and the collapse of three massive banks is massive churn. We’ll see bankruptcy litigation for years, 10-b-5 suits against the directors of each and every collapsed company, maybe even some fiduciary duty suits against BoA for buying diseased assets. Thanks to conflicts rules, that’s going to spin out litigation to tens of firms—the insurers, directors, investors, creditors, and others will all have different counsel. This is a litigator’s dream.
Others, however, give less uplifting explanations for why they don’t think this week’s events will affect them:
I’ve already been asked to leave.
And, overall, there’s a general fear that today’s bad will give way to tomorrow’s worse:
WaMu and AIG will be the touch off of the next Great Depression… the spigots, only dripping now will be shut up tighter than… well tight anyway.
One 3L, however, takes a much more optimistic view:
[I]n the long run, the amount of activity in the financial markets will continue to grow and continue to demand legal work. This will happen regardless of how many big banks are out there. The work will increase along with the market.
In the long run, he may be right.
Then again, he’s planning on becoming a litigator once he graduates.
—
Justin Bernold is a Director at Lateral Link, the sponsor of this Associate Life Survey.
(57) 
Comments
hopefully you all end up homeless
/troll
/eat it
This sucks.
Lehman who? Thank god I work for Venable.
NY to 190!!!11!! NAO!
NY to 190. Put the TTTs out of their misery
This post sucks asss
"What the fuck do I do in the meanwhile?"
I know! Do what all loser lawyers and law students do: make anonymous comments that you would never utter in public on ATL all day.
And make sure you write "TTT" repeatedly.
Oh, and pretend you're a lot smarter than you really are because you did well on a standardized test and (some of you) went to the same schools as our genius prezdent.
This poll is absolutely irrelevant.
Were 27% of attorneys actually hurt by the collapse of Bear Sterns? If a fourth of all lawyers faced a major career setback, even all the way back in March, we'd still be talking about it today.
Sure, people working at firms that represented the crumbling banks are going to have some tough times ahead with the loss of business. But most of the 43% is made up of people who are paranoid, easily excitable, and so isolated from the real world that they lose the ability to judge the importance of the issues that affect them.
Enough with those damn kittens! F'ing annoying.
these two pics were outstanding. teh bravo to teh justin.
Lehman who? Thank God I work for Drexel Burnham.
This is the GOLDEN AGE of Pro Bono Publico billables.
I love the kittehs! Pls to haz mor lolcatz?
Suck it Mystal!
Love,
#9's Mother
I have more transactional work than I can handle. Then again, I'm at our firm's Bratislava office...
Actually 8, we might not have seen 27% of all attorneys impacted by Bear Stearns yet, but the summer associate no-offer is definitely on the rise.
I'll wait to see if 27% of associates get smaller bonuses this year before I declare the poll irrelevant.
Could go either way, though.
i have a theory that this blog is read only by about a dozen people who post and post and post all the time - hence the recurring shitty ass jokes about guys in high school and Bratislava offices
If any lawyers need some extra $$ I hear GULC is in the market for some night professors
there was a young woman from bogota...
there was a young woman from bogota...
there was a young woman from bogota...
there was a young woman from bogota...
there was a young woman from bogota...
As a 2L at GULC, I've made the decision to scrap the firm gig and go along with most of my classmates to become a Westlaw rep.
This job market is becoming quite frustrating. If the law does pan out for me, I'm going to go into selling laser disk players. I hear they are the wave of the future.
I think # 17 is lonely because his mother is being GULC'ed by someone from Slovakia.
This was a very good post. In fact, it was just about the only good post that Elie has ever done. He might just be turning it around and maybe ATL isn't doomed. Oh, wait. . . .
Funny, as a real 2L from GULC, I have had 5 callbacks and 5 offers. Seven callbacks left, but I may cancel some to accept Wilmer or Williams & Connelly. Everyone should probably stop ripping on GULC.
Query, how many of those polled were GULC grads/students who were concerned about their careers regardless of how the market was performing given the inevitable spanking from US News this Spring?
agree w/ 8. atl is fear mongering. yes things are a little slower and we're tightening our belts, but it'll pick up again
27, don't worry GULC is, ya know, "pretty good" and lots of people "respect it." There, there.
Poor GULCers ... Poor Poor GULCers
dah what kind of survey is this?
it's liek asking whether being unemployed will affect your income.
This poll is absolutely irrelevant . . . Sure, people working at firms that represented the crumbling banks are going to have some tough times ahead with the loss of business.
__________________________________________
Since most large firms got a substantial portion of their business from the crumbling banks, how is this poll irrelevant?
It's the end of the world as we know it ... at least for 1 year.
NY to 145!!!
32: This is more like asking little children if they're afraid of the monster in the closet. A ton of them will say yes, but really only a few will ever get eaten and most closets don't have any monsters at all.
are you calling 32 a monster because he is in the closet? really insensitive
27: you can't even spell Williams and Connolly. You're arguing against your own point.
#8 you are probably the same type of guy who was confidently predicting the next round of pay raises about a year ago, since top tier firms simply MUST pay for talent.
After the spate of acquisitions from the carcasses, the end result is: Fewer banks less willling to take risks = fewer deals = less work = less $. This is not a hard equation but one that junior lawyers seem to have an incredibly difficult time grasping.
Why does everyone hate GULC? Is it just a bunch of GW kids who are jealous? Just a non t14 (non t20, for that matter) grad who is wondering....
26, this post was by Justin, not Elie. (You can tell by the use of lolcats.)
Prior to Lehman Brothers: Life is good.
Post-Lehman Brothers: The rent became whiskey, and my life became risky.
It's because our school teeters on the edge of the precipice separating the T14 from the savages. The readers of this blog, a bunch of sick fucks, greedily await the day when they can call us just another TTT. (Which will certainly happen if US News includes nights students in calculating its rankings.) These posts are just a warm up for them, a way of seeding the ground.
And they hate Catholics.
As a current 1L, should I:
1) Kill self
2) Kill self
3) Start studying bankruptcy law (then kill self)
@44: As a serious answer to your question, either focus on energy, bankruptcy, or IP/Patent. The events of the past year that culminated in a meltdown in the past week are going to have far much worse ramifications than the people of this board are willing to realize. It's going to get much worse before it gets better. And when it gets better, it won't be like it has been the past 8 years with PE sponsored LBOs, structured finance, and crazy derivatives. We're going to go back to vanilla banking.
But #14, isn't there are huge difference between T14 schools and the "Savages?" I went to a school that is inside the top 50 and most people there were pretty sharp, a far cry from the monkeys at T3 and T4 schools...I mean, shit, "even" if you go to BC or BU, you should be very proud of yourself....I don't understand the mentality that it's T14 or nothing. Although I would agree that they should get rid of all T3 and T4 schools....I would have been very proud to go to GULC!
As an addendum to 45's answer:
People who don't take at least introductory Tax and Bankruptcy courses are stupid, and annoying to have around once they start work. Good grades in those courses will only help you.
@44, as a 1L, you should do everything you possibly can to get really good grades so that you can land a good summer associate position as a 2L. If you don't already have Glannon's Civil Procedure, get it now.
Take bankruptcy law in the fall term of 2L so you can talk about how you're taking bankruptcy law in your interviews, further increasing your chance of getting an offer.
But if history is any guide, law firms will overcompensate for the current crisis and will actually need transactional associates more than they need litigators by the time you graduate. So ramp up on corporate & securities classes as a 3L, or possibly during the second semester of second year.
@47--agreed.
If you're interested in corporate work, there will probably be a decent bit of restructuring going on in the next few years. This isn't the same thing as bankruptcy, but it's closely related. To have at least some kind of working knowledge of what that involves, you should take BK, corp. tax, secured transactions, M&A, corp. finance (probably the most important class you'll take in law school if you want to do corp. work), and securities as a core curriculum (47 & 48 and others, let me know if you think I'm missing something). Also, I don't think this market will hurt Venture Capital as much as corp. fin, so consider taking fund formation classes if your law school offers them.
-45
43 is right - GULC's night program is BS compared to their T14 ranking. They really will be screwed if/when those students are counted. Of course, the other part is that GW kids are jealous and insecure.
I hope the Biglaw's starve and default on their outstanding loans to the bankrupt institutions that hold them.
I for one will continue to eat canned beans and leftovers on my federal salary.
I'm the guy who said "patent litigator, baby."
What most of you fail to realize is that we are witnessing the dawn of the next Great Depression. This is not just a slow down -- rather, the financial markets are entering into a prolonged period of decline.
Biglaw will be forever changed. Expect massive layoffs from ALL v-100 firms; expect salary reductions; and expect dark times ahead for the next 5-10 years.
THE PARTY IS FUCKING OVER.
Wow, 53 is a real optimist.
27 - I hope WC dings you for not knowing how to spell the firm's name. What a shame.
We are completely fucked. Even litigation is very slow at my big firm employer. When is litigation going to pick up?
Well I just got laid off from a large California based firm on the same day that Lehman bowed out and Merill got sold. So yeah, I feel some effects of the fucking banking giants dying. Monday will be "Black Monday" for a long time in my book.