first!!

Cadwalader, the firm Latham WISHES it could be...

2 -- nice try.

- blah blah (more firsts than you'll ever have)

this ship be at the bottom of the ocean

Degrading, but damn, that's good pay for contract work. You can get overtime, too, right?

And yeah, yeah, I know... it's hell, blah blah... I'm not volunteering.

Swallow your pride. $45/hour to $65/hour beats the hell out of unemployment.

"We could be moving to a place where law firms are populated by partners, a few choice associates, and a gang of contract attorneys that can be added or subtracted as work demands. Is Cadwalader going to lead the way to a new and slightly terrifying future?"

That'll never happen because of the quality control issues.

Get used to it. This is the future staring at you now. Large firms are going to be hiring fewer and fewer first year associates, opting for contract lawyers to fill the need for billable hours. A law firm can make much more off of contract/part-time attorneys that it ever could make off of real associates. Add to that the fact that clients don't want young associates working on their stuff, and you've got the perfect solution...contract attorneys. They can work from home most of the time. When actual space is needed, you can put them in whatever shithole you can find. You pay them 70% less than first year associates, no benefits, nothing but work for pay, then a kick in the ass. Is this what law students really signed up for?

Quick, someone tell Roxana!

10 -- Lol! Good one.

"If you don't have a job because Cadwalader canned you, going back to the firm with little status and no prestige could be the financial sound move."

Financial sound move?

I'm so happy Elie has a job and I don't.

Contract work is HORRIBLE! As a laid off atty, I can personally attest. But, $65/hour would sure help me get out of bed in the morning.

And, unfortunately, I think 9 is right. Good bye career. =(

Perhaps if you want to be a real lawyer now, you will have to look at smaller law firms in smaller markets. That is the only way you are going to get any experience other than document review anyway.

5 - NO! The Ship be at the limit of the Sky!!!

Small firms have been doing the "layoff then offer contract" model for some time. It works out well for everyone except the former associates.

16 - But document review is still not practicing law, even in small firms.

ok, I never post about typos - but really? WILING? come on now.

Does anyone notice how much Ellie relishes this type of news? Given the fact that he could not make it in BigLaw, he is excited that BigLaw is undergoing a massive restructuring.

If the "Cad" model, as you put it, becomes the norm, 20 years from now, there will be no partners, as noone will have risen through the ranks. The beginning of the end...

7, not only does it beat unemployment, but at $65/hour, you are close to the ballpark of how much you get paid per hour via salary for high billable years. Assuming $165K total comp, if you work (billables, nonbillables, CLE, recruiting etc.) 2,538 total hours, that's $65 per hour. Many of us work that many total hours, if not more, per year.

This is really an interesting development - those associates probably made $100 to $120 per hour if you break down their salary per year against 2000 hours per year - so they are fired and rehired as temps at a pay rate of slightly over half what they used to make. And they are considering that GOOD because temp work usually pays only 2/3 of the CWT rate. Amazing marketing, if you think about it. Pretty shrewd on CWT's part and probably the wave of the future. I don't like it, but it DOES allow firms to cut costs. And probably billing rates. It kind of pops the entire bubble. But I would guess partners still want their $1M/year take. They don't want that to change.

Contrast that with hourly rates of $150 to $300 being billed by solos, or even more - really makes solo practice seem more attractive for people who are willing to hustle.

20 - maybe just the end of the BigLaw model. Maybe Virtual Law Partners is the new model for litigation, with new partners being laterals from small and medium firms.

Dude - You know Ellie was instrumental in negotiating for the Pizza Hut add on ATL. "Free piezones for life, I'll take it!!!!!"

attorney in big law ---> contract attorney in big law = you will never become a real attorney in big law again. You can kiss that earlier part of your career goodbye. Contract attorney is equivalent to biglaw death

BigLaw sounds like death anyway. It was for me. Glad I am out of it.

Of course, mind you they are only talking about one offer for one client. Who knows how long that lasts? While I assume they will continue to offer former associates such jobs, it still doesn't equate in any way to a yearly salary. There is still no job security with this.

Elie -- If you type into Microsoft word first, then copy and paste into whatever program you use to post articles on this blog you'd probably avoid a lot of typos and ridicule from commenters.

If this ever becomes the model I hope we're all smart enough to leave the law or commit suicide.

If you got into a dump like Cadwalader or Latham, you're obviously smart, even though both of these firms are shitholes. Do something else with your life. Go back to school and transition into the sciences. We actually need people there. Our quas-feudalistic crony capitalist society doesn't function properly. For years we rewarded finance workers and lawyers even though these people contribute little to society. Hopefully that's changing.

28 - Elie feeds off of ridicule. He also feeds off of anything remotely edible and the majority of things that are inedible. He's basically a feeding machine.

29 is trying to desaturate the market, I l!!!ke that.

@20

Might want to think through that one a bit further.

I need to hear what PE thinks before I can form an opinion.

33 - You know his schtick. He's just gonna compare the going rate for contract attorneys to the price of a lap dance at Rick's.

33=PE

20-There will be associates hired, just a lot fewer. I think this is the coming model-A very select group of associates will be hired, the rest of biglaw hires will be contract attorneys. Just look at the rise of "midlaw."

I know that "midlaw" is scoffed at by some, but I also know of one "midlaw" firm with around 50 attorneys in the D.C. area that is overflowing with business. A partner at the firm tells me their receivables are up over 30% compared to last year, and all of the new business is "sloth" that clients are no longer willing to pay Biglaw rates for relatively simple matters. The terrain is quickly shifting and the work performed by 1st and 2nd year associates at Biglaw is now going to Midlaw with its lower rates.

My guess (and it's only a guess, as no one can be sure of the future) is that one of three things is going to happen to the biglaw model: 1.) Biglaw cuts rates and salaries for 1st and 2nd year associates. Think $90,000.00 or so for annual compensation. 2.) Biglaw adopts this contract attorney model for a lot of work done by 1st and 2nd year associates. or 3.) Midlaw continues to eat Biglaw's lunch when it comes to small or simple matters.

I think the Biglaw model won't accept option 3 and either adopts option 1 or 2.

Dean Edward Rubin lives

#22, that is the most ridiculous set of assumptions I've ever seen in a post. I seriously doubt that many Biglaw senior associates pull in $100 to $120 an hour, much less the juniors CWT laid off. You obviously are either (1) a law student, or (2) unable to calculate the number of hours you've actually worked in a year (as opposed to billed).

Why don't some of the laid off corporate associates in NYC move out of the City once their lease terms are up? There is still plenty of small business corporate out there, where you can actually meet with and advise your clients. Doing document review of hundreds of documents that nobody except the lawyers drafting them care about is not practicing law. Don't any of you know how to form entities, or prepare shareholders agreements or operating agreements? Can't any of you put together the documents for a simply asset or stock purchase transaction? That is practicing law.

Why don't some of the laid off corporate associates in NYC move out of the City once their lease terms are up? There is still plenty of small business corporate out there, where you can actually meet with and advise your clients. Doing document review of hundreds of documents that nobody except the lawyers drafting them care about is not practicing law. Don't any of you know how to form entities, or prepare shareholders agreements or operating agreements? Can't any of you put together the documents for a simply asset or stock purchase transaction? That is practicing law.

PE's mom weeps for him.

Dear 39/40: That is CORPORATE law. Some people are doc review monkeys. I mean, litigators. That's right.

20 the math looks like this -- best case:

165K a year at a 27% tax rate nets around 120K. assumening 2,100 billable hours, that's about 60 bucks an hour.

65 an hour at a 15% tax rate nets about 55 bucks an hour.

29 - Agreed. You're free! Go live your life - go back to your sign. other, enjoy your family, have fun!! Screw biglaw.

22- your math is way off, and as a consequence, your argument is ridiculous- the bottom line is that the average the hourly salary is closer to $60-$75, and here's why:

i. the average salary will generally be between $125,000-$250,000. by your math the average salary is $200,000-$240,000- that's way too high.

ii. when you are working as an associate, you spend a lot more non-billable time in the office than you would if you were a contract attorney. Those are hours worked, just not hours billed.

iii. You will probably bill alot more than 2000 hours a year if you are at a big, well-paying firm.

Between 45 and 65 means 45.

$ 65 ain't shit; ask any consultant or independent contractor who's actually done it. I mean, it sounds good until you start paying your own health and dental care insurance, payroll taxes, FICA and Medicare (which are much bigger since you have to pay 100% of them yourself, not a 50/50 split with your employer). And if you start putting away for retirement.... But you are young and invincible; maybe you can dump the health and dental costs. Go for it. At least you'll be off the dole. But do the math first, newbies!

43, you're missing state and local (NYC, DC, etc.) income taxes. Effective tax rates are much, much higher for the vast majority of associates.

42 - yes, I understand. But from what I also understand, the majority of lawyers laid off have been corporate and transactional attorneys. Yes, litigators have been laid off too. So why don't they leave NYC and go to small or medium firms and do real litigation, starting in the lower courts with small clients. Every day people go to court on regular litigation matters. I have not heard that the court dockets are empty. Again, that is practicing law, learning the ropes. Document review could be done by any well trained paralegal (and often is in smaller firms - some of those paralegals are better "lawyers" than the "lawyers" themselves). The litigation lawyer then actually gets to negotiate the settlements and even appear before a judge. Imagine that, really practicing law! Yes the pay is less, and you sometimes have to eat what you kill so to speak. But maybe there would be more job satisfaction. And less salary is better than no salary at all.

36 - Sloth? The guy from Goonies? He's got business?

50-- baaaaaby ruuuuuuth

Doc review is a dead end. Only a brain dead chimp could do it day after day for a year (and there are many law school grads that are brain dead).

Forget the money, what do you want to do with your life? Find either a small law or gov't job for 45-60K that will offer you real experience for a few years. Doctors make 40-60K for 3-4 year residencies before making the big bucks (and yes, plenty live in NY). After a few years as say an AG or a JAG, you will run circles around your "peers" who toiled doing doc review in Big law (or now just doc review) and you will be very marketable. I went from making 60K as state AG to a 110K in ONE YEAR in a mid law shop. And don't give the crap about "a first year at Big Law makes more then that." Those jobs are gone and never shoud have been, which is why we are in this mess to begin with.

Grab those small law, Gov jobs NOW. Big Law will be at 90K in 2010 doing scut work. Then will see who has the last laugh.

Slap! Cadwalader just bitchslapped its former associates. Hope none of them take the offer. Have some pride people.

CWT also is not offering their SA's offers on the last day of the summer program, as they have done in years past.

53, I'm sure your landlord would be very understanding and accept rent payments in the form of "pride."

"Are they also one of the first firms to realize that the associate model is dead?"

Are you blowing this out of proportion? Slow news day, fatso?

You asked:

We could be moving to a place where law firms are populated by partners, a few choice associates, and a gang of contract attorneys that can be added or subtracted as work demands. Is Cadwalader going to lead the way to a new and slightly terrifying future?

Actually I predict it more terrifying. The $45 to $65 is primo compared to what will happen when the temp agencies muscle in. Just wait until the temp agencies get out there and convince the law firms to use them as a "buffer employer" for the contract attorneys. Result: still no decent health insurance, vacation, sick pay, etc. PLUS much lower hourly rate because the temp agency is taking their chunk first.

One thing I have never understood about contract document review type work is how a reputable firm engaged on some high profile bet-the-company kind of litigation can trust a bunch of temp agency JDs they don't know to review documents looking for important information? Does someone double check what these people are doing? If not, what is stopping them from just bullshitting all day and not really looking at the docs? This is a serious question - I've always done transactional work and never any contract or doc review.

58 -

There are some people who really do just bullshit their way through the day. Every giant doc review project has at least one slacker who bills 8 hours every day and looks at 5 dcuments. It eventually catches up to them, since there are ways to monitor doc review, especially if it's on a computer, and most doc reviewers aren't smart enough to avoid being caught. Then the firm fires the kid and sweeps it under the rug -- obviously you never want the client to find out.

This is why we need health care reform (with a public insurance option).

It will create efficiencies in the labor market by allowing independent contractors access to affordable healthcare, thereby increasing the pool of talented people who prefer to work as independent contractors and allowing employers to increase/decrease the size of their workforce as economic circumstances require.

This is why we need health care reform (with a public insurance option).

It will create efficiencies in the labor market by allowing independent contractors access to affordable healthcare, thereby increasing the pool of talented people who prefer to work as independent contractors and allowing employers to increase/decrease the size of their workforce as economic circumstances require.

Confirming that the rate is $65/hr (50 hrs a wk) in addition to the regular sabbatical payments...it's actually a lot more than what the associates were getting paid prior to the sabbatical (over $4000 a week).

And the associates asked to come back for it were already working on the project before the involuntary sabbatical was implemented (only reason they were asked to return).

Uh, 57, this happened some time ago . . . google tom the temp

"Actually I predict it more terrifying. The $45 to $65 is primo compared to what will happen when the temp agencies muscle in. Just wait until the temp agencies get out there and convince the law firms to use them as a "buffer employer" for the contract attorneys. Result: still no decent health insurance, vacation, sick pay, etc. PLUS much lower hourly rate because the temp agency is taking their chunk first."

38, yes, senior associates do make $200K plus. I work part time at a large law firm and I am paid $100 per billable hour, plus since I work 1000 hours/year, I get health insurance.

Um. $65 an hour is NOT great for contract work. If you've been at Biglaw long enough to be doing anything but document review, you are MORE than qualified enough to be doing substantive contract work -- legal research, memos, and briefs. Even in the smaller markets that pays at least $100/hour (I usually get $150, and know others who get $200). For work you can do at home in your jammies. And as a bonus -- no dealing with opposing counsel. I am never going back to a big evil law firm again.

CWT has always been filled with sharks, this is just the latest in a long line.

No one with options should ever consider them, there's a reason their class is always populated with brooklyn, american, and other second and third tier schools.

This is without a doubt the most fucked up thing I have ever heard. Basically forcing former associates to beg for half the pay. Cadwalader is populated with the lowest lives in legaldom and I as a senior in house attorney with a major public company will NEVER hire them again. Ever. That does it.

And I sorely hope that these affected Associates looked these bastards in the eye and told them to go fuck themselves....in the ass.

#65: not-so-subtle axiom troll.

#64: still struggling with that billable v. worked distinction. If you work 2600 hours and bill 2000, you're not even close to $100 an hour at $200k. But it's not that bad: you're almost paid as well as an unionized steelworker.

Axiom is morphing into a straight contracting firm. It was a great idea when corporations were all hiring BIGLAw for everything but now when they aren't outside major litigation and select corporate work, to the extent that in house is hiring (which they aren't...yet) they aren't going to use an Axiom when they can just hire out the contract work for much less than $100 an hour Axiom attorneis were getting prior to the meltdown.

In house isn't stupid. There's enough talent out there that they can hire full time bodies for much less than even Axiom was asking. Axiom's business model does not work in this environment. Serves them right too. They're smarmy cocksuckers who think their shit doesn't stink. Well, now it does.

60- It will also put health care decisions in the hands of government beaurocrats as well as bankrupt the pharmaceutical industry, an industry with a heavy presence in the New Yokr/New Jersey area.

I know that you liberal BIGLAW know nothings think you're social engineering is very heady because you went to Yale and majored in Poly Sci but the reality is that the amount of jobs in the pharma industry that will be lost, including legal jobs, will be staggering and thats in the face of an already depressed market.

You can rah rah obama all you like but he has no idea what he's doing. And please do not retort with "well George Bush was an idiot and a criminal" because our collective working future is not a zero sum game.

#71, I stopped reading at "beaurocrat." Is that some sort of prehistoric creature? Pathetic.

Strange, I thought that now Bob Link was in London, that CWT would be rightsizing itself, but guess the current management still stinks.

72=Net nanny with small penis, pocket protector, ugly wife and trolls craigslist for 15 year old girls.

Fact: American lawyers would be much better positioned in this market if big U.S. law firms weren't awash with foreign lawyers and foreign applicants.

Fact: Indian contractors are poised to take over the American legal industry.

Too many crappy attorneys from TTT law schools chasing too few jobs, bedeviled by Indian contractors who are willing to work for pennies on the dollar.

That is the conundrum facing BigLaw.

If you want a job as a lawyer then go solo. There'll always be a demand for that. But BigLaw will be seduced by the low, low, low prices commanded by Indian contractors.

Um. $65 an hour is NOT great for contract work. If you've been at Biglaw long enough to be doing anything but document review, you are MORE than qualified enough to be doing substantive contract work -- legal research, memos, and briefs. Even in the smaller markets that pays at least $100/hour (I usually get $150, and know others who get $200). For work you can do at home in your jammies. And as a bonus -- no dealing with opposing counsel. I am never going back to a big evil law firm again.

77-- Is that the new marketing campaign for Axiom?

77 - You know substantive contract work also involves more than research, briefs and memos. It actually also includes preparing real documents and structuring real transactions, both large and small.

Sucks... but seems like they're at least trying to ease the pain on ex-associates, until pricks at Proskauer for example

CWT now has 461 lawyers, down from approximately 750 as of January 2008. Proportionally, this has to be the most dramatic reduction in the size of the attorney workforce at any major law firm.

I am not a CWT hater who fantasizes about the firm's demise but one has to wonder whether there has been irreparable damage to the firm. High profits during the boom were the direct result of a highly leveraged partnership (only 76 equity partners meant close to 9-1 leverage at its peak). You can't just create high leverage overnight when the business comes back. In particular, the reduction in size hit the most profitable businesses (MBS, structured products, derivatives) the hardest. It will take years of training associates to handle transactions and to manage junior associates with little partner oversight. And I think it goes without saying that, due to the massive layoffs (much greater than any other firm) the lateral associate market will be closed to CWT for many years after this is all over.

Without an army of associates to service the work during the next boom, CWT will not be able to generate above market profits. Since the firm is just a bunch of mercenaries who value high profits above all else, how does the firm survive without high profits? Partners will inevitably lateral elsewhere.

Wilson Sonsini beat CWT in this game... WSGR also offered its laid off attorneys contract work on the first effective day of separation from the firm.

this should serve as a wake up call to any associates or law students still drinking the kool aid. unless you have your own book of business, you're just an employee. the only difference between you and your secretary is the partner you work for actually likes their secretary.

I lost my job in 2003, took a job as a contract attorney, and today have a plaintiff's practice. I'm happy.

I'd say that if you have no job and have an opportunity to keep working in the legal field, TAKE IT, even if it's only contract attorney work. You can meet people that way.

And hell it's a no-pressure gig.

And Neil Weidner survives, how does he do it?

Lowenstein Sandler in NJ did the same thing to its layoffees. I suspect that many firms are doing this in a stealth manner.

85 - Long live Neil Weidner!!!

The quality control problems inherent in CWT and other firms switching from using associates to contractors WILL come home to roost.

A contractor has no reason to push the boundaries on whether something will be produced, think hard about relevance and privilege, etc. - when in doubt, you produce, and when you're just a contractor who doesn't even know the case very well, that doubt certainly occurs more often. And you can say all you want about adhering to professional standards, etc., but we all know that when people feel like they're getting screwed, they don't exactly do their best work for their employers, legal or otherwise. Smoking gun documents will be produced this way, some unnecessarily, and the firm and its clients will pay the price of viciously screwing the little people.

LONG LIVE NEIL WEIDNER!!!