Managing Partners Are More Confident: But They Still Expect to Fire You
The second quarter’s Managing Partner Confidence Index is a good news/bad news situation. The good news is that the managing partners at the nation’s law firms are more confident than they were last quarter. The bad news is that managing partners overall are still expressing “negative” confidence — and that could lead to fresh layoffs in over the next six months. The Wall Street Journal Law Blog reports the good news:
The good news: the overall confidence index was up 23 points to 91. We’re still in “negative” territory, but only slightly. Summarizes Citi’s Mark Costiglio: “Managing partners are much less pessimistic about the broader economy and the legal market, and there’s a sense that the worst is behind them.”
And the bad news:
The not-so-goods: Expenses. MPs continue, it seems, to fret over expenses, especially lawyer compensation. And that, LBers, could lead to a continuation of the parade of horribles: layoffs, hiring-freezes, salary-cuts and the like.
After the jump, the Managing Partner Confidence Index executive summary points out the ugly news.
Just to make sure nobody gets too comfortable with this feeling that we’ve hit the bottom, check out this message from the second quarter executive summary:
With weak anticipated demand, MPs are looking to reduce expense growth, primarily by cutting or freezing headcount, and this recession continues to be marked by record layoffs among law firms. Additional measures include shelved summer associate programs, delayed start dates for first year associates, and programs paying associates to take time off to do pro bono work or pursue other interests. A few firms have even taken the unprecedented step of reducing associate pay, and we expect others could soon follow suit.The indices for equity partners, associates and non-equity, non-associate lawyers all came in below the neutral baseline this quarter, indicating flat or declining headcount over the next 12 months. Overall, it appears that leverage will also be down over the upcoming year, with associate headcount levels trailing equity partner levels.
Despite all the cuts, managing partners feel that their remaining associates are still underutilized.
Despite the expected reductions in headcount, cuts may not completely make up for continued weak demand, and productivity, or billable hours per lawyer, will likely stay flat or decline slightly over the next 12 months.
Hey, it could be worse. It could still be March.
Managing Partners More Confident, But Layoffs Still on Horizon [WSJ Law Blog]
MPCI - Executive Summary: 2Q 2009 [Citi Private Bank Law Watch]
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i need a job
Elie just deletes my comments whenever he wants.
ALL HE DID HERE WAS CUT AND PASTE FROM A COMPETING BLOG AND ADDED NO ORIGINAL COMMENTARY!
lazy. lazy. lazy.
third again
happy to be in BD.
lazy? It takes serious work to write a sentence like, "The bad news is that managing partners overall are still express "negative" confidence -- and that could lead to fresh layoffs in over the next six months."
Serious work.
Elie eats your comments whenever he wants, and that is what you get when they are covered in hot fudge and nuts. Just too tempting for the big guy.
Managing Partners are confident that they can keep partners' income pretty steady even if the have to lay off associates & staff while cutting the pay of those retained.
Make use of me!
Happy 2 B on Sidebar...
They should lay off the managing partners. Let's face it, all a firm really needs is rainmakers and associates. The partners who are paid to service the rainmakers are the ones who should be axed.
10--that would be too logical.
Latham is "well diversified."
-Bob Dell in his 2/27/2009 email announcing mass layoffs
5 nailed it. Making that original posting even more turgid and incomprehensible in an effort to establish relevancy cannot have been easy. Hearsay rule may apply.
To summarize, it would appear to a casual reader that law firm managing partners believe that the EXISTING supply of associates is more than sufficient to satisfy CURRENT demand and demand is NOT expected increase any time soon.
The good news? They are no longer CERTAIN that revenue will continue to decrease.
Can anyone provide a salary/bonus chart for a western amlaw 200 firm, like a Holland & Hart, Snell& WIlmer, Stoel Rives type of place? TIA.
Looks like BigLaw associates will be going on a death march shortly. I wonder if there's money to be made in selling cold bottled water to the associates on their way to the professional killing fields?
The ship be sinking...
It's a mystery to me why I bother to even read this blog. The WSJ blog is consistently better, and clearly doesn't need to steal posts from here. You should be embarrassed.
managing partner = firm fluffer
What does PE think of this?
Here's a story for ATL. There is a rumour in the banking community that Paul Hastings is close to a covenant default on their line of credit. Any default will cause the bank to ask for personal guarantees from the partners. Not good.
We're gonna kill the partners but pay my severance first.
-Tyrone Johnson and his reggae band
Professional killing fields seems like an appropriate description of what is going on with first years.
~Suicidal Latham Ex-First Year
20 = relentless troll
17 --
You read this blog because the comments are so much better here -- not to mention your firm blocks Facebook.
lol @ 18
ATL is very entertaining today. Keep up the good work Mystal?
*please don't delete my compliment
Comments are being deleted all over the place. None of he numbers match up any more. What the hell is going on in here? ATL used to be entertaining and humorous.
#8 - chop down some lumber. ZUG ZUG!
DAAAAAAAVVVEEEE GOOOORRRDOOOOOONNN!!!!!!
22,
I see I have some company.
my suicide is going to be in dave gordon's office.
-suicidal laid off latham 1st year.
10 nailed it... there are way too many of said partners...
-9
why does the commenting engine on this blog suck bleached anus? my own personal blog does comments better than this. and it's mostly pictures of my cats.
Yes, Master
* chops lumber *
NY to $190k!!!!
That managing partner confidence index really puts things in perspective. A little bit too much fucking perspective.
7 nailed it.
LOL...'too much perspective' is one of the most underappreciated lines from the film. now find a place to quote the shark sandwich review.
ARGH!
"Managing Partners Are More Confident: But They Still Expect to Fire You"
NO! That managing partners expect to fire you DOES NOT elaborate on the vague topic of their increased confidence. Therefore, a COLON IS INAPPROPRIATE.
It is a second distinct but related concept. Therefore, a SEMICOLON is appropriate.
Correct:
Managing partners are more confident: They think the worst is behind them.
Incorrect: Managing partners are more confident: In-house counsel are wary.
Retired partner here: For anyone who hasn't firgured it out yet, it's the idiots serving as Managing Partners who have ruined the practice of law for everyone else. Their greed is only matched by their complete lack of any good business sense. To hell with the clients and attorneys, give me the money, don't just show me the money. This is where their heads are, when they're not stuck solidly up their ass. For several decades, I watched these greedly bastards ruin my former law firm. Yes, it's still a top law firm, but the only thing that counts there is how much money one can take from clients and give to partners. The actual practice of law isn't just a backseat issue, it's not even considered anymore. You young attorneys and law students think the money just grows on trees to be handed out to Summer Associates and newly minted attorneys. It doesn't, and your life in BigLaw is just one step away from a world of pure shit. Enjoy.
39 - great post. I've seen it too.
Young attorneys, forget BigLaw: get a gov't gig with a fat pension or open your own practice and defend the accused.
Increased confidence? This is basically a variation on "When you're at the bottom, there's nowhere to go but up"
Great. Confidence is no longer at 0. It is at 0.01.
#39 Hope some of these newly minted law school grads heed your words of wisdom, open their eyes and see the reality that is "Big Law."
MysTTTal
39, 40: Are there no firms left where the situation you describe is not the case?
"'When you're at the bottom, there's nowhere to go but up'"
The only place you can go is up, but on the other hand you can not go anywhere and continue to stay at the bottom.
These are the same managing partners who brought in record-sized summer classes while the credit crunch was already underway. Clearly, their economic forecasting ability should be trusted now as well.
What about Magungo and Latuka?
44 - no there aren't. It's the business model. Law firm management today is like tenured professors that never leave, except they suck all the profits out for themselves for as long as they can. They have no interest in your career advancement. You will never get to their level unless you can magically develop a multi-million dollar book of business. And you won't be able to do that on the hourly-billing treadmill. So, like I said, go gov't or be your own boss and open your own practice. 40
39 & 40: right on! I'd also like to add that those same firm staff themselves with HR administrators that have their own game going. They manage the staff by keeping the morale down and strife up to generate the litigation that inevitably ensues so they they can keep themselves a job because they know you won't fire them until the case goes away. But before that, there'll be another one. What these firms should do (if they ever grow a managing brain) is fire this crud and staff with HR administrators who value HUMAN CAPITAL. After all, staff just want to work. They're not looking for the headaches of a fight. Although the partners think otherwise, I'm sure.
As for me? I just got laid off by one of the top firms by one of those HR administrators even though I was loyal and a good worker. Go figure. The office was managed by a Napoleon.
But my firm assures me everything is looking up, and they're going to make lots of offers. This post must be off.
The attitude in DLA Chicago litigation worsens by the day, Can't wait to hear what crap we get told at tomorrow's department lunch, yet another big meeting. Will Sam grace us with his attendance, probably not. Lee Miller and Sam Isaacson I will shit on your desks before the year is done.
42 - I think people see the reality that is Big Law. It's just that there's no other game in town. If you have six figure student loan debt, you're paying at least $1300 a month.
- Government starts lawyers at $50,000, and it's really competitive to get those jobs - also you'll have to move, and they expect you to be in the top half of your class, or have a clerkship, or be super-connected. Not a huge group of people.
- Non-Profits or places like the ACLU pay even less, and tend to hire either burned out ex Big Law Associates for higher-up positions, then fill the lower positions with people who can afford to work for $30,000, AND have top grades, AND volunteered, starting in high school, with the exact same low-income population served by the non-profit. In other words, trust funders/do-gooders. I'm not knocking them, I'm just saying only a small group of people qualify for these positions.
- Starting your own practice is absolutely moronic when you've only just graduated. Also, you won't turn a profit for at least a year. So, again, only a small group of people are going to try this.
That leaves everyone who had to borrow to attend school, didn't make it into the top of the class, and isn't already well-connected in a particular field. In other words, 80% of this and last year's graduates, who are all fighting for a big piece of, well, nothing.
#42 -- Some of the happiest people I know are those who walked away from Big Law -- they have loans and kids -- yet they have no regrets. There are plenty of worthwhile careers you can get into with a law degree beside practicing in a corporate firm that sucks the life out of you and then spits you out and all for what, The key is to "think outside of the box." I know more lawyers than you can imagine who loathe what they do and the people they work with, but who will forever be sucked into the money pit. Then one day -- and the day does come for all too many -- they find out that even they are dispensible. Don't wait for that day to come -- find a true passion and live a fulfilled life! Good Luck!