Law Firm Merger Mania: King & Spalding Negotiations with Thacher Proffitt Break Down
Over the last week, we’ve been covering whether Thacher Proffitt’s litigation department was going to survive into the New Year. The operating theory has been that Thacher Proffitt’s corporate department would be part of a merger between TPW and King & Spalding, with litigation left out in the cold.
But now it looks like King & Spalding could be out of the game entirely. AmLaw Daily reports:
King & Spalding no longer is in the running to acquire the substantial portion of Thacher Proffitt & Wood that it had pursued in recent weeks, according to a lawyer familiar with the negotiations.
We’ve reported the widely held belief that TPW needs the K&S merger to go through in order to avoid dissolution:
The New York consultant and another individual familiar with the discussions say that if the deal falls through, Thacher Proffitt will likely go under.
Then again, the Treasury Department seems to think that Thacher Proffitt is going to stick around. And when was the last time they were wrong?
After the jump, we see if there is another option for TPW.
As we’ve seen with Heller Ehrman and Thelen, efforts are made to parcel out specific practice groups and departments before any official announcement of dissolution. That is apparently what happened in the final act of the K&S/TPW negotiations:
The partner says King & Spalding initially explored a deal in which it would acquire substantially all of Thacher. In recent weeks, however, King & Spalding grew wary of the bank debt and lease exposure that an outright acquisition would entail, and instead proposed a deal in which it would take a group of approximately 75 Thacher lawyers as lateral hires.The group would represent essentially all of Thacher’s structured finance practice. The rationale for such a move, says the partner, was that the practice would likely rebound in a year or two.
Structured finance attorneys hanging onto their jobs while others did not would have been major news in and of itself.
And it still might happen. According to AmLaw Sonneschein is in the mix:
Within the past week, according to the partner, as King & Spalding neared a deal with Thacher for the structured finance group, it emerged that Sonnenschein Nath & Rosenthal was talking to Thacher lawyers.
Of course, Sonnenschein was last seen in these pages laying off approximately 25 attorneys. We have no idea if they are in a better position to take on more people than K&S was.
Either way, the dark is gathering around TPW. Again.
King & Spalding Out of Proposed Thacher Acquisition [AmLaw Daily]
Earlier: Law Firm Merger Mania: Thacher Proffitt To Be Rescued by King & Spalding?
Treasury Hires Thacher To Help Out With TARP
(147) Comments
Comments
first on a SATURDAY
WHO'S YOUR DADDY BITCHES
first on a SATURDAY
WHO'S YOUR DADDY BITCHES
C'mon losers... shouldn't someone post "First" already?
TP-Dub just can't catch a break.
Top 10!
Tilt. Game over.
Elie, what took you so long? Did you finally notice the comment with link posted last night re: Hogan?
Interesting...puts things in perspective...things could be a lot worse for any one of us. I mean, we could all work at Latham & Watkins for Christ's sake.
Interesting...puts things in perspective...things could be a lot worse for any one of us. I mean, we could all work at Latham & Watkins for Christ's sake.
Interesting...puts things in perspective...things could be a lot worse for any one of us. I mean, we could all work at Latham & Watkins for Christ's sake.
Just like Lehman - why buy the whole cow when you can just take the prime cuts?
Eleventh! Suck on that! 11! That's double FIRST!!!
11--I'll double FIRST your mom
11--I'll double FIRST your mom
11--I'll double FIRST your mom
uh oh, i dont think your mom is going to be pleased.
Who would want 27 structured finance partners, 24 or so of whom are sitting on their thumbs?
12-14 = gigant douche looser!
- The Real Double FIRST!
Does anyone know why a Proffittable law firm would be dissolving?
King and Spalding and the other ATL firms already have an effective salary freeze by virtue of the insane compression.
18: it couldn't spell "profit" correctly.
I had this awful smelling trailing me around all day today. Turns out I had stepped in a big pile of sub-market Latham.
I bet Latham is going to find itself in the same position at TPW. Why else would they be taking such drastic measures?
I wonder what practice areas are worth scooping up. All their finance and cap markets partners are just a liability at this point. Problem is Latham has a bunch of young partners and firms will want the senior partners with the business relationships.
------------------ BREAKING NEWS ------------------
On January 21, 2009, George W. Bush is joining the venerable Texas firm of Deranged, Dumbass & Retarded LLP as head of its government relations practice.
------------------ BREAKING NEWS ------------------
19 -
Could not be more correct. They start you at 160 and in your 7th year you make like 180. Solid business model. Glad that I: 1) Do not work in ATTTlanta, 2) Do no work at K&S, and 3) am busy, rich and single.
king dick here - are these real firms?
@ 23:
Oh I get it, it's very clever... How's that working out for you?... Being clever.
The “Post-Financial Meltdown Tour of New York City” begins and ends at the World Financial Center.
Where else can you find four marble TTTs that are overflowing with rotten post-meltdown diarrhea?
One: Cadwalader Wickersham and Taft (in some old Lehman space)
Two: Amex and Nomura
Three: Thacher Poffit
Four: Merrill
And they’re connected by the financial nuclear winter garden!
The most profitable place in the WFC is now officially the P.J. Clarke’s!
Elie Mystal's working for the weekend
Elie Mystal wants a new romance
Thacher Proffitt's going off the deep end
Thacher Proffit needs a second chance.
Based upon the holiday parties being held in the break rooms at K&S in the mother ship in Atlanta, and some well known layoffs - K&S is in trouble
They need to re-think their business model fast
I hear Robert Hays stopped shaving his bald head
That is a bad sign
TPW= Toilet Paper Warehouse
30 - is he still shaving his balls?
Elie Mystal looks like Tay Zonday.
K&S is not business casual...bunch o' propa southern gents run that ol' shop; TPW is business casual. Heard that was the sticking point in the merger discussion. Looks like TPW can go full casual soon.
23. Wow. You are not at all funny. Its not even a little bit clever. Maybe you should try being tubby like elie.
I know it's pretty but it didn't come out for air.
35 = Barbara Bush
TPW is done for. Their office locations (NYC, DC, NJ) are not conducive for a large firm to take them over, because most of those firms already have offices in NY and/or DC.
They would been good merger/acquisition for Bell Boyd or another Chicago based regional firm, but even Bell Boyd would have a tough time swallowing this one.
TPW is done for. Their office locations (NYC, DC, NJ) are not conducive for a large firm to take them over, because most of those firms already have offices in NY and/or DC.
They would been good merger/acquisition for Bell Boyd or another Chicago based regional firm, but even Bell Boyd would have a tough time swallowing this one.
I was just waiting for someone to bring up Bell Boyd & Lloyd. I truly believe that TPW's last hope may just be the firm that was counsel to the 1892 World's Columbian Exposition and its Smoke Abatement Society--perhaps they'll be able to put the fire out at the World Financial Center....
Please. Latham is a damn good firm and is known to be one of the best managed. Freezing salaries is a smart, forward looking move. When 2009 turns out to be much worse than 2008, a bunch of firms are going to have to take much more drastic measures because they didn't plan ahead like Latham. Either that, or meet Heller/Thelen/Thacher's fate. I'd much rather be at Latham than one of these firms.
Any other first years thinking "damn, I really dodged some bullets here." I know smart people who went to Heller and Thelen, and I interviewed with both of these firms also. There but for the grace of God go I. Good luck to the attorneys at these firms.
Learning how to live on less than $250,000 per year is hard.
Are there any firms in Atlanta that don't give crap raises? I was planning on working in Atlanta when I graduate but there's something insulting about getting 1/3 the raise everyone else gets.
41- LATHAM SUCKS BALLZ. BIG TIME TTT. I KNOW. I KNOW PEOPLE WHO HAVE WORKED THERE. AND THEY ALL THINK IT SUCKS...BALLZ. NOW LATHAM PAYZ SHITE. GIBSON ROCKS! NO COINCIDENCE THAT IN ADDITION TO BEING AN AWESOME LAW FIRM, GIBSON IS AN AWESOME GUITAR. NO COINCIDENCE THAT LATHAM IS IN THE SAME BUILDING THAT THAT SHITFUCKER MADOFF. SORRY THAT YOU ACCEPTED YOUR OFFER THERE, BRA. SORRY YOU'LL BE HAVIN' SUMMER LUNCHES AT SHIPOTLE. COME OVER TO 200 PARK AND MAYBE SOME GIBSON ROCKERS WILL LET YOU SUCK ON JEAN GEORGES' STEAK. PIPING HOTT, SON. UNLESS YOU'RE PART OF LATHAM'S EXQUISITE MANAGEMENT COMMITTEE, IN WHICH CASE YOU GO HAVE FUN AT PER SE WITH ALL THE LOOT YOU STOLE FROM YOUR ASSOCIATES.
Many times during my summer associate stint, I would've preferred Chipotle to steak.
41 sounds like a Royal Douche Bag.
HHBD!
45 seems like a Royal Douche Bag. Hubris, look it up.
HHBD!
41,
As someone who knows a former Heller associate, put down the Latham kool aid, take a look around and try to assess what is actually going on. Things may look good in your neighborhood, but remember, this is a huge law firm with many of offices. If even a small group of partners leaves Latham within the next three months, the Heller/Thelen/Broebeck cycle will begin. Latham may be ok, but if that first group of partners does leave, you should have already made the necessary phone calls to allow yourself to lateral ASAP.
47, sounds like you need to try some of Jean George's piping hott steak.
I think "hubris" is short for hubrismilah, i.e., when the mohel slipped up and left 47 a pedantic little prick....
36 nailed it!
41, not saying Latham did this, but there are firms that since mid-November are offering IP associates market salaries and signing bonus to compensate for bonus they lost I have no idea what the requirements were, but the point is firms are willing to pony up when they think it is in their interest.
23 = Obama. We all know that liar has no class.
Yo, I thought Latham would suck associates off, considering it's in the LIPSTICK building, for fuck's sake, but it looks like associates will be wearing the kneepads in '09...shit that 401k contribution, plus soc security contribution is going to burn like a mofo (where they all probably had offers)...
"LATHAM EAT CAKE!" -- Latham's exquisite management committee.
Lath...umm why the fuck did I pick this firm over skadden?
I'd rather shit in my hand and eat it than work at LaTTTham WaTTTkins.
Latham and Madoff in the same building makes me giggle.
I do believe that we have gotten way off-topic.
Gotta love Latham.
Latham's going down the shiTTThole
Sonnenschein to 190!
Yah, big deal, partners at any firm could leave and take their firm down. I don't see why there's more risk that this would happen at Latham than anywhere else. I didn't read anything about them paying partners below market.
Just wait, if 2009 is as bad as it looks to be, other firms will be taking much more drastic measures. If things rebound, Latham will most likely end the freeze.
Atlanta to $35k!
LEAVE SONNENSCHEIN ALONE
as i stated previously here, the tpw associates should be happy to not be associated with k&s. hopefully they all find a home soon.
I don't know why they don't just farm all the low end structured finance work out to India. Anyone can change names and dates.
This isn't possible due to the bank's control, but if TPW stripped 35% of its associates/junior partners, it would be a profitable nyc market firm with small corporate, tax, litigation, real estate and structured finance practices. This would mean, however, that everyone would be working big law hours again instead of leaving at 5:30 or 6.
The point is moot though; the banks are strangling this firm. They will gladly accept 60 cents on the dollar now rather than risk their money with Scotchy McTvet.
BITCH SPREAD THE BUTT CHEEKS SO I CAN SMELL THE JUICY INSIDES!
Latham brilliant management committee should have closed the useless fucking Milan or Barcelona offices before taking a shit in their hands, throwing it in the freezer, and then forcing frozen salary turds down the throats of all New York associates. Fine, '09 will suck. But the market will pick up eventually...second quarter of 2010 at the latest. But the aftertaste and cold chill of Latham's frozen salary turd will linger FOREVER. Just like motherfuckers still talk about Gunderson to 125, they'll be talking about Latham's frozen salary turd for decades. We're going to make sure that the next 20 classes of law students about this. They may not have choices next year, but two, three, four, five, ten years down the line they will, and Latham will regret this fucked up decision.
12:04 is bitter that latham didn't give him an offer
my milk shake brings all the boys to the yard
71, more like bitter that he took his Latham offer you useless cumcake.
73 is a dirTTTy whore
74 is a facecunt
70 - classic greedy spoiled brat. According to that school of thought, law firm success is tied to how much associates get paid, and the corresponding reputation in law schools and among junior associates. Quality of work? Partners that can bring in business? Client service? Nah, none of that can hold a candle to the overwhelming significance of how much money a totally clueless, pre-paper trained first-year associate can make. What a wanker.
merger, no-merger don't matter. the firm is done.
Here's the K&S pay structure:
http://www.abovethelaw.com/2007/10/nationwide_pay_raise_watch_kin_2.php
In Atlanta, the cost of living is virtually nothing, so this is a TON of money. It's essentially doubling NYC pay when you factor in CoL.
75 likes to receive the dirty sanchez
Sonnenschein is an upstanding firm with many fine, quality attorneys.
K&S pulled a bait and switch. They approached with what seemed like a pretty fantastic deal and then, on the eve of the marriage, jilted TPW and came back a few days later with a way shittier offer. Many of the TPW partners would now rather live on the street than work for K&S, so my guess is that K&S pushed their crappy offer and TPW told them to go fuck themselves. There are a bunch of other contenders at the moment. Probably any deal made will mean placements for at least a large chunk of structured finance and most of the corporate department.
Will Sonnenschein and TPW finally make love?
Atlanta is more expensive than Houston and Charlotte, and closer to Dallas.
All 3 of those cities pay NYC market salary.
I don't get why ATL is a second tier legal market, but it is.
Let's get all of the K&E bonus rumors in one place. People who have something to add, I want to know how senior your source is.
K&E Chicago Associate
From L&W's office across the street in the LIPSTICK building, where firm managment has turned off the heat (freezing us as well as our salaries to cut costs), I can see K&E partners stuffing wads of benjamins into stockings with each K&E associate's name on it.
Latham is a fabulous place. You're just jealous because you didn't get an offer. Sorry about your tiny pink no offer bro.
Ok, 70, you want to do this, let’s do this.
(1) Associate compensation--and not just first year associate compensation—is directly tied to a law firm's ability to recruit and retain the best and brightest associates. Do you really think the best candidates would choose Wachtell if they didn't pay double the market? Firms have attempted to make compensation less of a factor in recruitment by endeavoring to give potential hires the impression that they pay the same amount as peer firms (though, as we know, that’s not always the case). The firms made this decision because they know that they wouldn’t stand a chance in hell of recruiting a candidate away from a competitor firm that was perceived as paying even a little bit more. Of course compensation isn't the only factor—there’s reputation. But reputation, which, unlike compensation, is subjective and cannot be easily quantified, becomes a more important factor when the objective factors are the same, i.e., firms pay the same amount.
(2) Recruitment and retention of the best and brightest associates has a substantial effect on a law firm’s success. Clients are very concerned about associate quality. Law firms routinely get hired and fired based on the quality of their associates. (Ok, it’s usually fired, and usually because of associate fuck ups and neglect of clients.) Clients have recently gone so far as to insist that law firms bring a couple of their associates on pitches. If you dispute this, you’re just some (admittedly paper-trained) glorified word processor who has never so much as been identified, much less uttered a word, on a conference call. Now get back to making all those quotes curly, and please, please don’t put that in your narrative, just say “revisions to document,” ya hear me, son?
(3) Following its decision to freeze associate pay, Latham now pays less than its peer firms; this alone will cause the best candidates to choose peer firms over Latham. As an LA firm, Latham is already an outsider in this town. Some people would already choose to go to a NY based firm over Latham just because they just don’t want to work at a firm’s satellite office. And that’s not a terrible argument. Who wants to be lorded over by some fucker who’s at the beach every day…breaking your back so that bitch can lunch at the Chateau-motherfucking-Marmont! I’d rather bust my ass for miserable NY partners who answer emails at two in the morning and spend their free time feeling poor and wondering how the fuck THEY got dinged by the coop board at Bernie-fucking-Maddoff’s building!
Now get back to work before I fire you, you chipped tooth cumdragon!
Comment 87 was intended to be directed at commenter 77 by commenter 70. Apologies for the confusion. I hereby submit my resignation.
I meant commenter 76!!!!
I love ATL. Internet assholes and cyber tough guys everywhere. The people posting on this site can't be so arrogant and obnoxious in person -- they'd get the shit beat out of them.
track the layoffs on the http://www.lawshucks.com with the layoff tracker (http://lawshucks.com/layoff-tracker/)
thacher is already on the board with 29 in march and sonnenschein had 135 in June and 25 in October, so who knows why they're acquiring
Hey 90, what better way to show us that you stand for integrity and transparency than by deriding anonymous posters in an anonymous post! Your point would be taken had you identified yourself. Or are you too much a pussy to have the words "shit" or "asshole" come up on a google search of your name. YOU BEST STAND DOWN FOOL BEFORE I ANONYMOUSLY PUT YOU IN A CAMMEL CLUTCH AND MAKE YOU HUMBLE.
only the best finance attys are left at TPW so K&S would have been lucky to get them -- its NY practice could use a boost
79 is a filthy jizz mouth.
It's all relative 87. When your rancid toilet collapses because they didn't have the foresight to plan ahead, latham will be looking pretty damn good to potential recruits. HTH.
Latham is the dirtiest, cheapest toilet in all of Scotland, and there's no pay raise waiting for you after you swim through all the freshly flushed diarrhea and tampons.
96 still wakes up screaming every night over his latham rejection
87 is delusional. 95% of law students aren't worth recruiting and are entirely fungable.
Salaries could be cut to $120K as NYC market and you would still have just as many takers, because where else are you going to be earning six-figures with that law degree?
98 must be a first year because once you have to supervise, TRUST and RELY UPON a subordinate's work, you start to care how your firm recruits.
94 likes to get f*cked in his colostomy bag hole
tpw partners and associates are lucky to avoid K&S.
tpw partners and associates are lucky to avoid K&S.
@78/83-- I have lived in Atlanta, and it is completely second-rate town. Same level as Charlotte, with worse traffic. No amount of money is worth it if you actually have to LIVE there
Who in their right mind trusts and relies on any junior associate?
With a very few exceptions, the partners in TPWs Structured Finance Group aren't capable of doing more than cookie cutter work - I can't imagine why another firm would want to take them on and support them until securitization work starts up again. Moreover, future securitization work is going to involve such simplistic structures that first year associates will be capable of doing 95% of the work.
How do you know this 105 you douche?
TPW owned me last night.
-K&S's mom
98--
So are those who spell fungible incorrectly.
104--
The firm(s) that hire them. What is of more concern to me is a firm that does not hire/trust/train junior associates and, instead, relies heavily (not exclusively) on the lateral market.
rather than name call, let's just call it like it is -- poor transparent 105 wanted to work at tpw and was turned down at some point down the line
Oh, and please promptly go fuck yourself 105. I'm sure with your intimate knowledge of residential mortgage backed security structures and comprehensive knowledge of the tax and accounting implications that drive those structures, you are fully qualified to evaluate future securitization models. What are you? A fucking structured finance fortune teller?
Also, the TPW partners rocked my world last night.
-K&S's Mom
105 likes to get f*cked in his colostomy bag hole
105:
Partner work quality is irrelevant. Partners do not do substantive work. If your firm has partners doing work your firm is inefficient and your associates are inadequate. Partners generate work; associates do it.
110,
Enjoy being kicked out on the street after TPW collapses. Hahahaha.
Don't worry about me 113, I'm going to open a whore house. Main attraction: your mom.
-K&S's Mom.
k&s alt is due to start letting people go. after the new year. bet on it.
This is 105 - I used to work at TPW (that's why I know the quality of its attorneys). I'm now a partner at another Firm.
This is 105 - I used to work at TPW (that's why I know the quality of its attorneys). I'm now a partner at another Firm.
That's terrific 105. Congratulations on the all the success you've had in life. You can still suck it.
I'm going to bet that 105 is at Kaye Scholer.
Well, I never worked at Thatcher but its partners mustn't be that clever if they've gotten themselves into such a mess. Other firms with structured finance practices are hurting but don't seem to be going bankrupt.
Let's face it. Steve Kudenholdt is about the only worthwhile catch left over there in the structured finance partner ranks.
you are so insecure and uninformed
119 is making me laugh!
105: that's really mean-spirited and just not true. Sounds like sour grapes to me. There are some really talented attorneys at the firm - partners and associates alike - who are hard working, creative and decent people. Furthermore, even back in the day, every single deal had its nuances and required lawyering. No such thing as a cookie cutter deal. You clearly have no idea what you are talking about. I'm so sick of the assholes and idiots that abound on this board. You all give lawyers a bad name.
Is it true that TPW is trying to sublet its entire NYC office? If so, what's the plan? Is everybody going to work from home?
Silly 125. From Tvetenstrand's porch, of course.
LATHAM IS AN AWSOME PLACE TO WORK. SURE IT'S A DIRTY SHITHOLE, BUT WE'RE GOING TO GIVE YOU A BELOW MARKET WAGE TO RIMJOB IT CLEAN. D
I have worked on these securizations. 99% are much closer to cookie cutter than rocket science for the lawyers. A lot of the fees were based on the transaction because the deal took so few legitimate hours to do. No good thing lasts forever. RIP TPW.
It seems as though the Fighting Clams have no fight left in them. RIP indeed.
Why is everyone so concerned with TPW anyway. If you used to work there, so what you're not there anymore. If you never worked there, what the hell do you know. Everybody, get a fucking life and leave TPW alone. The only people who should be concerned are those employed there. Everybody else go kick rocks or something!!!
http://www.nytimes.com/2008/12/22/business/22law.html
TPW had a good run and got paid exorbitant fees for very little substantive work year after year (much like the investment bankers who were their clients). Hopefully the partners there banked all the bucks they made in the past.
Just loved the paragraph in the in the article about the TPW/SNR merger that's about how Latham sucks ass. Totally on topic.
Wow - so who's left at TPW to turn out the lights?
I would like to thank Above the law..on reporting the "goings" of TPW..apparently TPW cannot tell their employees what is going to happen. Merry F**king Xmas
Are any associates going to Sonnenschein? Is it true that the TPW partners going there aren't going as equity partners?
So Paul Tvetenstrand is no longer King. So sad. :) He'll go down in legal history as the person who presided over the demise of one of the oldest firms in the usa.
Are you proud, Paul?
138,
Yes. Very very proud. Thrilled actually.
HTFH
87/70- get it straight. 76 here. Sure, associate quality is important (and I disagree w/the poster who said they are fungible). And better pay helps attract better associates. And non-NY firms will have a harder time in NY due to NY parochialism. That said, how many clients have chosen a firm to represent them in a case or a deal because of an associate? Like you said, they might leave a firm because an associate screwed something up, but they will usually choose a firm based on the ability and reputation of one or more partners.
Some (maybe many) junior associates need to get over their inflated sense of self-importance. It is probably one of the worst side effects of the inflated salaries being paid to first year associates, along with the inflated hours they have to work to make themselves cost effective (to the firm, not the client).
112 - it depends on the practice area. For things that can be leveraged (document-intensive civil litigation, lots of deal work) you are right that associates do most of the work. For things that can't be leveraged so well (high stakes criminal trial work, legislative, some regulatory) the quality of partner work is key. Besides, the partner who is supervising the associates had better know what they are doing, and not just trust some 2nd year to get it right. The partner might not be rowing the boat, but they better damn well know how to steer it.
*farts*
K&S pulled a bait and switch. They approached with what seemed like a pretty fantastic deal and then, on the eve of the marriage, jilted TPW and came back a few days later with a way shittier offer. Many of the TPW partners would now rather live on the street than work for K&S, so my guess is that K&S pushed their crappy offer and TPW told them to go fuck themselves. There are a bunch of other contenders at the moment. Probably any deal made will mean placements for at least a large chunk of structured finance and most of the corporate department.
Same old K&S ...
Associates *are* fungible. Does it matter which T14 student I hire? Probably, but nothing that would cue me in to which one I actually want to hire is going to come out in the interview and summer process unless the guy is just a total horror show (those happen).
Other than that, T14 students - and law students in general - need jobs. They have no better option than taking whatever market salary is. The few firms that actually offer competitive advantages hire very few people. So that's not an option for law students anymore than every dissatisfied mid-level lateralling to Skadden over 2008 "half-Skadden" bonuses.
The limit BigLaw can pay is (non-BigLaw starting salary + perceived opportunity cost of working 10 more hours a week). Since law students currently carry six-figure debt loads unless they got scholorships or their family is rich and salary distribution for new lawyers is extremely bi-modal, the alternative to BigLaw is very unappealing.
BigLaw could slash salaries to $130K for new associates (in NYC) and require actual work during the summer programs while paying 1/2 1st year rate, and they would STILL fill their classes with quality people, and likely with the exact same people they currently get.
Due to the bi-modal distribution, you have plenty of people who would take BigLaw with a smile at $90K. Your alternative sucks. Therefore, you have no bargaining power because the choice of (c) - not working - isn't viable unless you have outside wealth.
144, maybe if there was a single BIGLAW employer could wages be slashed so drastically without effect. Fortunately, there is a highly competitive market for associates spread around many geographic areas and even in many alternative industries. (in fact, I bet BIGLAW clients would make the same argument as you about BIGLAW fees and PPP's--where else can a lawyer make 7-figures, we could slash fees and they wouldn't have any choice!)
I would agree the interview process isn't perfect, but there are plenty of duds out there and plenty of superstars, and trustworthy associates are in fact necessary, and so firms will continue to do what they can to maximize the chance of hiring the superstars and minimize the chance of hiring the duds--hire the HYS and law review types and pass on the bottom 10%, etc.
Besides, all this isn't even speculation: many firms pay less than top-of-market (but more than shitlaw) and they aren't exactly grabbing market share.
144 and 145 - I don't necessarily agree with all of your points, but thank you, thank you, thank you for thoughtful and analytical comments. This level of debate and discussion is what lawyers and law students should be capable of, rather than weird ego-driven rants that just show what a bubble biglaw is. Thanks.
king & spalding continues to lay off - some people getting less than a months severance