Crisis for some firms, opportunity for others
It’s been a dark week on ATL. Layoff news has been pouring in: 21 attorneys cut at Katten, up to 60 at Sonnenschein, and 20 at Clifford Chance.
To prevent you from jumping out your windows, we’re revisiting a Wall Street Journal article from earlier this month on the silver lining for law firms during the economic crisis.
Firms with relatively strong balance sheets are hiring lawyers from competitors that are hurting from the dropoff in mergers, debt offerings and other staples of the legal business. Leaders of these firms figure that being bigger and more geographically diverse will help them weather downturns in particular market sectors and capitalize on complex business opportunities that require a variety of specialties. In most cases, they’re even giving the new hires raises.
Did you hear that, despondent ones? Raises!
Many firms have been feasting on the remains of Heller Ehrman (R.I.P.). Heller partners and attorneys have been snatched up by Hogan & Hartson; Orrick; Sheppard Mullin; Arnold & Porter; Covington & Burling; Jones Day; and Cooley Godward Kronish. Other firms have been poaching partners from struggling Thelen.
Some firms are buying on the cheap, while others are giving new attention to more resilient practice groups:
K&L Gates LLP has acquired medium-size firms in Texas and North Carolina this year and hired 45 partners from other firms. “We have no debt — no long-term debt, no short-term debt — and therefore have a balance sheet that allows us to grow aggressively into a downturn,” says Peter Kalis, chairman of the 1,700-lawyer firm…But many law firms believe that they have no choice but to expand specialties, such as restructuring, intellectual property, securities litigation and antitrust, that are generally believed to remain steady — or even pick up — during down cycles. Cadwalader, Wickersham & Taft LLP in New York laid off 131 lawyers — nearly 20% of its staff — earlier this year because of the implosion in the mortgage-backed securities market, a key practice area for the firm. But it has hired lawyers in other practice areas, including financial restructuring.
Chins up.
Some Law Firms Hire in Slump [Wall Street Journal]
As Heller is sliced and diced, many associates are out in the cold [National Law Journal]
Earlier: ATL Layoff Coverage
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1 - damn you.
1 - damn you. Damn you to hell.
TTTurkey
Sidley also took on Heller partners.
Anybody know anything about Paul Weiss and their ability to weather the storm?
Davis Wright Tremaine LLP took a large hunk of Heller's Seattle office.
Shouldn't the green face in the pic be the smiley (as opposed to the yellow)?
8 is correct. Kash = FAIL
NYC to 210 K!!!!!!!
what about powell goldstein.
Sonnenschein cut "approximately" two dozen lawyers this time around.
Its oddly satisfying to read a post without first looking at the byline, think that the post was good, think that it must not have been written by Elie, and then look up and find out that it was not, in fact, written by Elie.
Wilson Sonsini has also picked up Heller partners.
This may be true, but also may be somewhat misleading. I know my office, V5, is taking a wait-and-see approach with regards to hiring associates from struggling firms, based on the thinking that there will still be good associates available 6 months from now, when things have settled down a bit. good luck everyone.
powell goldstein is in merger talks with cravath.
Its oddly satisfying to read a post without first looking at the byline, think that the post was good, think that it must not have been written by Elie, and then look up and find out that it was not, in fact, written by Elie.
Venable associates went to Bracewell.
This may be true, but also may be somewhat misleading. I know my office, V5, is taking a wait-and-see approach with regards to hiring associates from struggling firms, based on the thinking that there will still be good associates available 6 months from now, when things have settled down a bit. good luck everyone.
NY to 165?
Skattten is initiating a hiring freeze for 2010 as well as a large firm in Cleveland that will remain nameless. Schulte also just hired Tadge Choadely and his team away from MoFo.
NYC to $110,000!
See also: http://www.goodwinprocter.com/NewsEvents/News/Goodwin%20Procter%20Adds%20Five%20From%20Heller%20Ehrman.aspx
SkaTTTen
Abortions for some - tiny American flags for others!!!
First to say that smart money is on Ellie looking at those smileys and thinking about eating a pound of skitttles.
mmmmmm
8 & 9 -wrong- Yellow smiley=classic
Fail=not making frown green as a throw-back to Mr. Yuck (RIP Mr. Yuck)
NY to 120!!!!!!!!!!!!!!!
NY to 120!!!!!!!!!!!!!!!
Lisa: You know, the Chinese use the same word for crisis as they do for opportunity.
Homer: Yes - CRISITUNITY!
"Leaders of these firms figure that being bigger and more geographically diverse will help them weather downturns in particular market sectors and capitalize on complex business opportunities that require a variety of specialties."
Where does this leave Cravath?
First to call K&L Gates' chair on the lie that they have no debt. That place is floundering in debt.
Don't say flounder to Ellie .... he's too hungry...tis not fair to the chubby chumpkin.
K&L Gates shedded associates and partners left and right.
K&L Gates shedded associates and partners left and right.
"Leaders of these firms figure that being bigger and more geographically diverse will help them weather downturns in particular market sectors and capitalize on complex business opportunities that require a variety of specialties."
Where does this leave Cravath?
Venable is closing its Harrisburg office effective this Monday.
18: what venable offices were affected? was it laterals, or layoffs?
SLOW ECONOMY ONLY MAKES THE JONES DAY MONSTER STRONGER
38 -- I think maybe just laterals...but am not 100% positive.
Good for them and their lack of debt obligations - not so good for them having an enormous fixed cost structure.
Paul Weiss???????? Any info would be greatly appreciated, particularly CORPORATE work. Are they healthy???
as paul weiss associate, i can tell you that corporate is super busy. if you're under 2100 hours for the year in the group ,then you're doing something wrong.
32, what's your source? I summered at K&L and Kalis said that no-debt line to us all the time.
KLG isn't much of a firm but i'll tell you what...they're miami office is arguably one of the best looking offices you will ever see. it's akin to a high end lounge, all in white. and the talent working behind the desks is top notch to boot.
2100 to date?
paul weiss has a strong litigation practice; this is expected to insulate, somewhat...
non-nyc-heavy, litigation/other-heavy = good
arnold+porter (antitrust/litigation/DC)
weil (bankruptcy, lehman duh)
williams+connolly (D.C./litigation)
all good, for e.g.
43 -
What about all the capital markets/securitization attorneys? What about reports of hedge funds closing down? What about the bailout and PW's absence in mandates?
What type of work is keeping PW corporate busy?
paul weiss has a strong litigation practice; this is expected to insulate, somewhat...
non-nyc-heavy, litigation/other-heavy = good
arnold+porter (antitrust/litigation/DC)
weil (bankruptcy, lehman duh)
williams+connolly (D.C./litigation)
all good, for e.g.
30 = epic pass
WHAT ABOUT POGO?
Any thoughts on Goodwin Procter NY?
20 -
Don't blame me, I voted for Kodos!
"We have no debt -- no long-term debt, no short-term debt -- and therefore have a balance sheet that allows us to grow aggressively into a downturn,"
Hmmm....I call BS. Is there ANY public info available to find out where firms stand?
anyone hear of Wachtell layoffs?
#37- What Venable Harrisburg office? As far as I know, there never was one.
As for K&L Gates, they just told the staff that "bonuses will be given only in exceptional circumstances" I think firmwide. Not sure what's happening with associate bonuses. People I know who have been with the firm for many years tell me that they have always bragged about having "no debt." Even the Harrisburg office has the "lux lounge" look, not just Miami. The same designer does all the KLG offices, so they have a similar look.
Paul Weiss lost out in the bid to represent Lehman in bankruptcy, so its restructuring practice is not pulling its countercyclical weight but I agree that its litigation is expected to insulate it somewhat.
At K&L Gates, no debt has been a firm policy since its founding. The firm also has huge cash reserves. Of course, the firm is cutting costs where it can. To do otherwise in this economy would be dumb.
Top firms are doing well, it's the firms 50 and lower that are gonna have probs...
Top firms are doing well, it's the firms 50 and lower that are gonna have probs...
To those who say the K&L Gates no-debt policy or reality is bullshit, I am at K&L Gates and I have seen balance sheets. No outstanding debt (letters of credit to guaranty office leases exist but have not been drawn upon). K&L Gates can buy your firm with its current cash holdings. Fact.
K&L no offered the NC summers.
Davis Wright took a whole mess of Seattle Heller partners.