ATL Rumor Agency: Which Firms Are In Trouble?
Based on popular demand, it is time to take a look at which firms may be struggling heading into bonus season. Would you like to share speculative information about stealth layoffs, declining profits, or an "everybody here is freaking out" environment? This thread's for you.
Let's get the ball rolling with a panicked message we received about Cahill Gordon:
I work at Cahill Gordon and we're so f**ked. This junk bond market has collapsed ... and representing underwriters of junk bonds makes up at least 75% of the revenues of our firm. Simply put, there's not any work going on and no sign that it's coming back. We've recently tried to diversify by adding a few litigation partners and a partner that focuses on representing telecom companies in regulatory matters, but, so far, these efforts aren't coming close to replacing the revenue we've lost. I wouldn't be surprised to see our profits per partner drop by 40%-50% this year - -there's just no work. Now I understand why Roger Meltzer and his band of associates left [for DLA Piper].
Cahill declined to comment on this rumor, probably because a 50% drop in PPP is, frankly, "the sort of thing that Miggs would say." But the junk bond market has collapsed, and we do know that Cahill did a lot of work in that area.
More speculation, after the jump.
Many people are reporting work slowdowns, including a tipster from Dewey & LeBoeuf:
We just got through our reviews, and all the juniors and mid-levels in our group got the same "everyone's hours are low, but you should still be more aggressive in looking for work." Even the pushy guy [in my department] was told to be more aggressive.... I haven't heard anything in other groups...I still think they'd want to avoid any bad PR this early post-merger.
(When we previously contacted Dewey about earlier rumors, the firm stated that "attrition is a feature of life for large law firms" and "[i]n fact, our associate numbers are up from last year.")
One eagle-eyed tipster reports:
Do you know what's up with Dewey's D.C. office on F Street? Their name was replaced with the generic building name over the front door this week. ... I think they have (had?) two offices since the merger. The one on F Street I think they built in anticipation of bringing Orrick over. Since that merger fell through, I think they might have just moved everyone to LeBoeuf's D.C. office? I'm not sure, but all of a sudden their big bronze nameplate was gone.
In these troubled times, even a simple real estate swap can scare associates who need jobs.
This kind of information usually amounts to speculation full of sound and fury, signifying nothing. But, as the saying goes, we'd rather post ten alarmist bits of conjecture than let one prescient tidbit go free. Or something like that. Have at it in the comments or email us here, and we'll continue to separate the gossip from the intelligence.
(225)
x
I'm first, but I refuse to comment on it.
I'm first, but I refuse to comment on it.
I'm first, but I refuse to comment on it.
Can you comment on why you thought you were first when, in fact, you are second (and third)?
What is happening at WILDMAN HARROLD? For the love of all that is good and decent, please tell me what is going on at WILDMAN HARROLD?
Are you doing any work today?
Perhaps there is something telling about the term "junk bond".
2/3 - I beat you. Suck it!
Until this morning, I would have said the Charlotte-based firms are in trouble. But the M&A issues between Wachovia, Citigroup and Wells Fargo will keep that department busy for a while.
7 - that is a fabulous question; the answer to which is NO. However, I am trying to give off the impression of doing work by looking very flustered. I have been surfing the internet for the past 3 hours now.
News on 2 firms. Really informative.
Mayer Brown continues to struggle. Huge cash flow issues all year, can't hire business carrying laterals and partners are still fleeing in the face of the US$8bn in law suits arising from Refco.
A Chicago based firm is taking over Dewey's F St. office, I forget which one, but it is not one of the top tier.
any info on the firm Wilfred Brimley?
IN DC, Dewey moved from their fancy new office builiding to Lebouef's brand new (very fancy) offices at 10th and New York Avenue. Just real estate consolidation...
wow, a majority of the comments are ridiculous! this blog has been going down for a while and the comments here are part of it.
Can anyone talk about DPW?
WB is closing its Chicago office b/c all of the partners got diabetis
How has Cadwalader been doing?
WHAT THE FUCK IS WITH THE CONSTANT REFERENCES TO MOVIES FROM THE EARLY 90s???? Was that a particularly formative period in Elie's life?
How has Cadwalader been doing?
Stealth layoffs at Skadden -- and upfront layoffs of Skadden staff attorneys!
I call bullshit, 23. The Skadden is almight and infallible.
Stealth layoffs at Skadden -- and upfront layoffs of Skadden staff attorneys!
Things are tight at the Stalingrad branch of MMSC.
Very nice 15 and 19.
cadwalader seems to be doing well, actually, since the layoffs. much more work to go around.
Skadden is closing it's Scranton, PA office
no stealth layoffs at skadden. please refrain from lies on this board.
Skadden is closing its Scranton, PA office
and information on Chicago firms?( other than Wilfred Brimley of course)
I hear Bendini Lambert & Locke is doing well.
Winston's doing some stealth layoffs in expected departments.
The carnage at Cadwalader and Thacher's a lot worse than has been publicized.
I really enjoyed this post.
It's WILFORD Brimley, and the firm no longer exists, having been explodified by Eaton Quaker Oates.
I'm first, but I refuse to comment on it.
35 - where do you get that about cadwalader? that's just wrong.
Tech slowdown. Global slowdown. Broebeck. Heller. Whose next?
How about West Coast players who expanded nationally and internationally -- but never really had the business model to pull it off and have been carrying overseas offices. Easy to do during the good times. Pretty tough in bad times. Expect to see some flags lowered.
35 - where did you get that about cadwalader? that's just wrong.
Gentlemen at the legal preparatory academy with which I was once affilated were in the habit, in times of putative financial distress and noticeable erosion of the socio-economic foundations of nation and state, of casting aspersions and assorted calumnies upon certain limited liability partnerships and other creatures of statutory creation or enablement, whose business was purportedly the practice of law. The purpose of the aforementioned aspersions and calumnies was somewhat opaque, but was believed by some for the purpose of correcting asymmetric information in the marketplace of ideas and other such ethereal creations. Those who bore witness to these aspersions and calumnies, when in Congress assembled and properly resolved into a committee of the whole for purposes of considering the question duly placed before them, considered the issue to be of something substanially less than or particular note.
Legal Fraternity Lothario is, his ownself, to be found in that geographic region of the country referred to by some as the "midwest", though certain portions of the territory to which that cognomen is routinely applied are neither "mid" nor "west." In the location described herein, Legal Fraternity Lothario finds that the larger law firms to be located in the jurisdiction to be below budget, but not in what might be referred to colloquially as "panic mode."
20 -- Yes.
33 -- Winner.
quinn emanuel had a great year this year, profits-wise, but will screw its associates by matching the paltry to non-existent bonuses of the big corporate firms.
First!
Anyone heard anything about Bartles & Jaymes?
O'Melveny is doing stealth layoffs in its corporate group.
Latham in California pushed back their first year associate start dates till January.
O'Melveny is doing stealth layoffs in its corporate group.
Latham in California pushed back their first year associate start dates till January.
Actually, Wilford Brimley was fired from Bendini, Lambert & Locke right around the time that firm disbanded due to a federal investigation concerning suspect billing practices. Word was that just before being let go, Mr. Brimley, then BL&L's Head of Security, was found badly beaten, apparently by a shod foot.
Chicago firms.
October is supposed to be the month to watch.
Weil Gotshal is doing fine, thanks for asking.
Just want to respond to the nonsense Cahill blurb. Everyone at the firm right now is pissed at whoever wrote that message, because it is completely untrue.
1) The writer is clearly a very junior associate, because nothing he/she said is true and nobody here calls our work junk bonds (we prefer the more innocuous-sounding "high yield.")
2) Repping underwriters is definitely a big part of our business. 75%? Um, no. Sure, the economic downturn is hurting us just like everyone, but Cahill is still very profitable. In fact, partners on the executive committee recently informed associates at a routine meeting that revenues were only slightly (less than 10%) down from last year, which was, of course, a banner year for the firm and the industry. Those who make even basic inquiries would know that Cahill has closed some of the biggest deals ever in 2008, not to mention that our lit practice is still chugging along normally.
3) Diversifying by adding lit partners? Huh? First, that isn't diversification stupid, unless you were unaware that half of your coworkers are litigators. Second, Cahill hasn't added lit partners since the beginning of 2006 (6 new partners, 3 of them lit). We are, however, diversifying with the addition of the regulatory partner in DC, as well as stealing Dechert's top bankruptcy partner. Both additions occurred well before the economic clusterf***, and last I checked diversification was a good thing.
4) Roger Meltzer left Cahill because he ran for firm Chairman and lost. DLA Piper offered him the top corp spot internationally, and he wanted the power and the new challenge. The "band of associates" that left with him was a whopping total of 2.
5) There is no way in hell Cahill's PPP is going to drop 50%. What a joke.
My name is happy Cahill associate, and I approved this message.
Bonuses will be the same or larger than last year at a number of the premier firms. Personally, my firm has had a fantastic year thus far and has only become busier as of late.
52,
Everyone at the firm has time to check post on ATL? Why aren't they working?
Owww. 52 took the bait. Cahill associates shouldn't respond to these accusations, no matter how nuts. Just do what your firm did and don't hit the post comment button. In case you didn't realize, no one before 52 said anything about Cahill or its prospects. Now they're going to take notice.
any word on schulte?
54, like so many big firm associates, I check ATL often, even when I am busy. I also check espn.com, gmail, and facebook, along with anything else I feel like. But thanks for the response, it was snappy. -52
Legal Fraternity Lothario, you are the greatest thing the internet has ever produced. I would like to join a mailing list to be alerted of your next post.
Its not widely known yet, but I have heard rumors that Thelen might be losing people.
55 - what are you talking about? everyone took note of the cahill info - it was in the body of the main post. refuting it is probably a good idea.
18 is obviously a law student. Firms like DPW are totally fine. It's the non-elite firms that everyone's worried about.
Can anyone weigh in on how Cadwalader is doing? There seems to be some disagreement above. Is the firm in much better shape now after the layoffs, or were the layoffs just the first sign of bad things to come?
"The idea he doesn't realize that Article I of the Constitution defines the role of the vice president of the United States, that's the Executive Branch. He works in the Executive Branch. He should understand that. Everyone should understand that."
How are things looking in San Fransisco right now? Any info about Ropes, Paul Hastings or Latham?
I wonder if the Cahill tipster actually works at CGR. He/she sounds totally clueless.
56, Schulte's tanking. You know it. I know it.
Real estate practice group? .........get that resume ready.
anyone know about Gibson? H&H? Kirkland?
In my office of Dewey, there was no work. It was really slow. During performance appraisal time, several people "went missing" with no explanation. Dewey was definitely practicing stealth layoffs because they didn't have enough work in that office after the merger.
52, I know who you are, and I have just reported you to the executive committee for making a post on something we are not supposed to comment on, certainly not on this site.
I hear whispers about Morgan Lewis -- anyone on the inside know anything?
LOL@"nobody here calls our work junk bonds (we prefer the more innocuous-sounding "high yield.")"
Anybody know how Dechert is doing?
is quinn OK?
Legal Fraternity Lothario to EIC of ATL. Most amusing.
Legal Fraternity Lothario to EIC of ATL. Most amusing.
is quinn OK?
Legal Fraternity Lothario to EIC of ATL. Most amusing.
63, if Palin had said that there'd be hell to pay. Luckily, only a lawyer, running with a con law professor, serving in the fed gov't branch described in Art I said it. That would be like Palin saying she's not sure whether Alaska's a state yet.
"The idea he doesn't realize that Article I of the Constitution defines the role of the vice president of the United States, that's the Executive Branch. He works in the Executive Branch. He should understand that. Everyone should understand that."
20% or more drops in PPP will be the NORM this year, not the exception. Look for some firms to pad their numbers even more than usual with all sorts of bs like excluding bonuses from PPP, picking cash or accrual item by item, etc. Frankly any firm that doesn't see a material drop in ppp is flat out misreporting numbers.
This year, mark my words, will be ugly.
76 - quinn is doing great
gdc :(
How are the Charlotte-based firm or satellite offices in Charlotte doing?
I thought they'd take a big hit with the Wachovia news, but with this legal scuffle about to unfold between Wachovia, Citigroup and Wells Fargo, the M&A departments should still be busy.
As for firms' PPP dropping, and summer and associate classes getting smaller, though that hurts my immediate and future interests, isn't this the fall-out from the same thing that hurt the financial industry: inattention to clients' monetary worth and needs and lack of efficiency? Let's be real about it.
56 - law student, or schulte associate?
Fried Frank is very slow. Stealth layoffs have definitely been going on despite what the Managing Partner has said.
Fried Frank is very slow. Stealth layoffs have definitely been going on despite what the Managing Partner has said.
Latham is stepping up on stealth layoffs.
McCormick and Schmick, best happy hour in DC. Just try it, I swear.
Fried Frank is very slow. Stealth layoffs have definitely been going on despite what the Managing Partner has said.
I know no one cares, but Greenberg Traurig is doing layoffs left and right in New York. They layoffs are being done as part of the annual reviews, so they can say it is because of "performance" or "low hours." They are giving people until December, at least. They even fired (at least) two partners in their real estate group a little while back (sorry Brian and Lisa).
Apparently firm leadership, including Sir Richard, have been having meetings, the jist of which is, "which junior partner can we blame the lack of work on."
Best thing to happen to GT though is that so many people are leaving on their own. Not sure why firms (cough, Dewey) would want to pick up GT partners with no book though.
78,
There would not be hell to pay if Palin said that. Hell would probably freeze over because it would mean that the graduate of U of Idaho actually over a book. Does anyone realize that this lady went to community college?? She gave a shout out at a vice presidential debate. . . can we please dispose of her now??
- Disgruntled republican.
81- What is going on at gdc?
18- DPW will be fine. Any clients V10 firms (and a couple of firms in the teens) lose they will get back in the form of the extra business the now busier and larger acquirer has.
Below V10, switch to litigation or bankruptcy
81- What is going on at gdc?
81- What is going on at gdc?
I heard a very hostile takeover is about to go down between Wilford Brimley and Bacon, Lettuce, & Tomato, LLC.
82, read a real blog. No Charlottte firm is involvedin the M&A fighting.
Schulte isnot tanking. hedge funds are sitting on tons of cash and are beginning to spend it. SRZ's BT group and IM group are busy. SRZ is ranked 20 or so for most bankruptcy cases (per a post on their site) and litigation is strong. They are also looking to get another 40-60 summers for next year. Just sounds like 66 is jealous. Unless there is some associate to prove me wrong. This is the word.
Schulte isnot tanking. hedge funds are sitting on tons of cash and are beginning to spend it. SRZ's BT group and IM group are busy. SRZ is ranked 20 or so for most bankruptcy cases (per a post on their site) and litigation is strong. They are also looking to get another 40-60 summers for next year. Just sounds like 66 is jealous. Unless there is some associate to prove me wrong. This is the word.
I dont understand how Cahill, Thatcher, Schulte or Cadwalader are still around. Wasnt there whole shtick capital markets, and haven't capital markets stopped existing for several months now. Schulte has hedge funds, but what work can you possibly have to spread around if there are zero bond issues?
Tough call on the Charlotte firms. Only after the whole deal is finalized will we know. The key factor is what happens to Wachovia's I-bank. The nationals based in town rely heavily on that line of business. Only time will tell. If Wells sheds the I-bank, the fallout could be dire.
96
What's your source, and what firms are involved? I just assumed that since the Charlotte-based firms handle Wachovia matters regularly (in fact, isn't Wachovia the biggest client of Parker Poe and the like?), that they would have some input on this. I mean, someone has to act as counsel for Wachovia, as they have potentially breached the exclusivity clauses in the agreement with Citigroup. I thought it was a safe assumption to make, so I'm interested to hear which firms are handling the issues.
What real blog do you suggest I go to?
I dont understand how Cahill, Thatcher, Schulte or Cadwalader are still around. Wasnt there whole shtick capital markets, and haven't capital markets stopped existing for several months now. Schulte has hedge funds, but what work can you possibly have to spread around if there are zero bond issues?
Anyone know how Simpson is doing?
Dewey's F Street space has been taken by Seyfarth, which, although it recently has been much-maligned here at ATL, seems to be stirring things up a bit.
http://legaltimes.typepad.com/blt/2008/09/seyfarth-shaw-s.html
70 -
Can you elaborate? My understanding is that the larger offices ( NYC, Philly, DC, LA) at MLB are doing fine.
101, parker poe is the worst firm in town. I assure you they will have no part in any of this. Wachovia spreads little bits of work out accross town, but a NY firm will handle any of this large mess.
Negative comments above about the financial situation of SRZ indicate that this blog is simply first-years who know nothing about anything.
No stealth layoffs at Latham - that's absolute nonsense
78, you're right. It's really not possible that he simply misspoke, saying 1 when he meant 2. He must really not know the Constitution.
And I don't care what anyone says, Sarah Palin's brother IS the best teacher in the year!
78, you're right. It's really not possible that he simply misspoke, saying 1 when he meant 2. He must really not know the Constitution.
And I don't care what anyone says, Sarah Palin's brother IS the best teacher in the year!
Negative comments above about the financial situation of SRZ indicate that this blog is simply first-years who know nothing about anything.
Sidley is doing negative bonuses this year.
Sidley is doing negative bonuses this year.
Seyfarth Shaw has problems. Some claim that the firm is profitable, but this could be due to the revenue they generate selling illegal tax shelters. See
http://www.forbes.com/forbes/2008/0602/126.html
and
http://www.usdoj.gov/tax/txdv08060.htm
Graham Taylor was a partner at Seyfarth Shaw until a few months ago.
Aside from money problems they re being sued and have more serious ones.
106
So what you're saying is that Charlotte isn't a good market anyway? I mean, if Wachovia spreads business across Alston Bird, Parker Poe, etc., and Wachovia doesn't even rely on these firms to any large degree for its overall business, and its completely up to Wells Fargo whether the Charlotte firms will be in the mix for business whenever the merger is finalized, then that paints a fairly bleak picture.
I'm just trying to gain a sense of the market here, because I'm looking at different markets in which to drop for the spring clerk hiring season, and it doesn't make sense to me to waste the postage on a clerk's salary if nothing would hit there anyway.
Sidley is doing negative bonuses this year.
102; those firms are probably in a lot of pain, but I think they still have some work cut out for them in this market.
For example, a number of hedge funds investing in distressed assets have sprung up, and I wouldn't be surprised if schulte is somehow involved. A good chunk of highly levered companies will need their high-yield debt and leveraged loans restructured/refinanced, so cahill isn't out of the game yet. CWT axed the dept that was directly affected by the crunch, and it may be picking up on some of the mid-market PE deals that are still around.
Just my 2 cents.
115 - you're hitting on some enlightened points and pointing to at least one very affected firm...hint hint to everyone reading closely
115 - you're hitting on some enlightened points and pointing to at least one very affected firm...hint hint to everyone reading closely
No stealth layoffs at Latham - that's absolute nonsense
At least 5 contract attorneys at Skadden DC were laid off. I know of at least 3 DC associates who also laid off on the sly.
Stealth layoffs at Kaye Scholer going on since the beginning of the year. With associates barely able to bill 20 hours a month in the RE department (a direct result of the CMBS meltdown), looks like there will be more to come...
Negative bonuses? What?
"Cahill declined to comment on this rumor, probably because a 50% drop in PPP is, frankly, 'the sort of thing that Miggs would say.'"
Is this an admission that the tip probably isn't very credible? Is this really the best tip you could come up with? This associate, if he/she even works at Cahill, is clearly clueless.
122 - I call BS, partners have PILES of new deals on their desks, neatly lined-up and all...just waiting to be assigned
Finally someone talks about layoffs after the other day's roll call under the associate survey comment section failed to take off... There will be layoffs galore, I'll be honest, I'm scared shitless I'm going to lose my job. I think "rumors" at this point are probably more than just that. 122- wasn't Kaye Scholer the firm that announced some secretary layoffs a while back on ATL and the editor caught a lot of flack for making a mountain out of a mole hill ? Guess the Ed. may have been on to something.
Pillsbury.
Negative bonuses are when they dock your pay to a set amount and expect you to work billables during that time period.
It's a backhanded way of telling you that you're a wage peon and you're fungible as a way of keeping the firm's balance sheets pristine.
Enjoy.
127 - Pillsbury layoffs? What years and what cities ?
68- what office of Dewey?
"Schulte isnot tanking. hedge funds are sitting on tons of cash and are beginning to spend it. "
Hedge funds are sitting on tons of cash and beginning to spend it? 98, you're misguided at best, developmentally disabled at worst.
SRZ Partners wil begin fleeing after the New Year. Many associates will get axed around that same time. The 40-60 SAs will be "encouraged" to join the litigation group.
I know this. Welcome to reality.
You junior associates are so funny with this stuff. It's all very cute.
Cahill and those other firms are fine for this year because deals get "signed up" way before they close. You know those "commitment letters" you always hear the grown-ups talking about? That's when the deal get signed up. So deals that got signed up before things got terrible have still been closing all year.
Firms get paid when deals close. That's the "wire" that you hear the grown-ups talking about when you're shuffling papers you don't understand into folders that you've mislabeled.
The real problem is that no deals are getting signed up now. This will likely have some serious consequences in 2009 because there's nothing in the pipeline to close next year. So there could be real problems for some of these firms in 2009, but profits this year are not particularly effected.
other than associates being told to keep hours up, and a sattelite office having trouble finding work, is there anything else rotten in dewey?
Are SRZ nay-sayers just jealous of the firms profits?
Let's talk Charlotte here. It's probably the one legal market getting hit the hardest on a comparative basis. It has major national law firms and their clients are only wachovia and BofA. Those firms in CLT who pinned their wagons to Wachovia are going to get burned now - CWT, Dewey, Dechert, A&B, I'm looking at you.
129: 3rd through 5th years; San Francisco.
Let's also consider the insanity that is CharloTTTe firms (some anyway) paying full NYC payscale! (Is that true, btw, or is there some sort of compression there or is it just no-bonus?). How in god's name are these "national" firms even able to pay their associates with the market there in disarray as it is?
Somebody dropped the ball there.