Nationwide Layoff Watch: Major Cuts Come To Weil Gotshal
How many lawyers and staff are being laid off? A surprisingly high number, into the triple digits....
WEIL GOTSHAL & MANGES — MEMORANDUM — MANAGEMENT COMMITTEE ANNOUNCEMENT
From: Wolf, Barry
Sent: Monday, June 24, 2013 9:35 AM
To: AS All; EU All; US All
Subject: Management Committee Announcement
As we have discussed during various town hall meetings over the last few years, the market for premium legal services has entered into a “new normal” after the 2008 financial crisis. Many firms have been forced to take actions over the last few years to reduce costs to deal with this new reality. However, given the balance of the Firm, in particular the contribution of the BFR [bankruptcy and financial restructuring] and litigation practices (most notably as a result of Lehman), we have been able to avoid taking such actions. Further, we have continued to make meaningful investments in the Firm over the last few years as part of a strategic plan to increase our revenue base for the future.
Navigating Financial Success by Avoiding Common Pitfalls and Maximizing Firm Performance
We have been able to do this because of the Firm’s balance of practice and geography as well as our strong financial position. As you know, we have zero debt outstanding. This has been the case throughout our history — and we have no plans to change that. Further, our partner pension plan remains fully funded with over $500 million of assets in it, and we do not have any compensation guarantees with partners other than for the first year a lateral partner joins the Firm.
As the restructuring and litigation work relating to the 2008 financial crisis winds down, and as the overall market for transaction activity remains at the lower levels which we believe is the new normal, we must now make the adjustments we avoided over the last few years to position the Firm to continue to thrive. We are taking these actions from a position of strength. At the same time, from a revenue perspective we will continue to take significant steps to further increase our market share. However, it appears that the market for premium legal services is continuing to shrink. Therefore, actions to enhance revenue alone will not be sufficient to position the Firm as necessary for these new market conditions.
Accordingly, there will have to be meaningful compensation adjustments for certain partners in light of the economic realities of the new normal. It may well be that some of these partners will decide to pursue other opportunities.
Additionally, we will reduce associate headcount in certain practice areas in a thoughtful way by approximately 60 lawyers. From a strategic standpoint we will be deemphasizing our CCL [complex commercial litigation] practice in Houston and Boston. Given these reductions, a corresponding reduction in support staff of approximately 110 people will be made. These decisions have been taken and will be implemented in a manner consistent with our Firm’s fair practices toward our people.
Sponsored
Is The Future Of Law Distributed? Lessons From The Tech Adoption Curve
The Business Case For AI At Your Law Firm
Navigating Financial Success by Avoiding Common Pitfalls and Maximizing Firm Performance
Is The Future Of Law Distributed? Lessons From The Tech Adoption Curve
While we have been able to avoid these actions in the past, and it is very painful from a human perspective, the Management Committee believes these actions are essential now to enable our Firm to continue to excel and retain its historic profitability in the new normal.
While communicating this information to all of you in person would be far preferable to doing it by email, our desire to inform all of you at the same time requires email communication. We know this will be difficult for the people impacted so we ask all of you to give these people the understanding and support they deserve.
Barry M. Wolf
Executive Partner
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Big Law Firm to Cut Lawyers and Some Partner Pay [DealBook / New York Times]
Weil Slashes 60 Associates, 110 Staffers [Am Law Daily]
Sponsored
Early Adopters Of Legal AI Gaining Competitive Edge In Marketplace
Legal AI: 3 Steps Law Firms Should Take Now
