Although the report is untimely, it contains a few new bits of information about the Kasowitz cuts. Here are the highlights, along with additional info from Above the Law sources….
(Please note the UPDATE at the end of this post.)
- The number of affected individuals was around 30. (Our prior report suggested 24 to 30.)
- The cuts hit associates the hardest, although partners, counsel, and staff got hit as well.
- What caused the layoffs? A slowdown in business due to the end of the credit crisis:
The layoffs were an outcome of a number of large cases stemming from the credit crisis being resolved, but the attorney said the firm is still “extraordinarily busy.”
…. One Kasowitz client whose major litigation ended in 2013 was bond insurer MBIA Inc., whose legal battles with 18 banks lasted for several years.
In March 2013, Manhattan Supreme Court Justice Barbara Kapnick rejected a bid by Bank of America Corp. and Societe Generale SA to undo the 2009 restructuring of MBIA, which the banks claimed illegally transferred $5 billion in assets from MBIA’s structured finance insurance business to its municipal bond insurance business (NYLJ, March 5, 2013). Within a couple months of Kapnick’s ruling, MBIA settled the litigation with Societe Generale and Bank of America, which wrapped up its four-year legal battle with multiple banks.
“That was a very large case. We had lots of people working on that,” the firm attorney said.
- Gross revenue declined at Kasowitz in 2013. (This is consistent with our prior reporting in connection with Kasowitz’s disappointing bonuses.)
What do ATL tipsters have to add? After our original story, several of them contacted us with additional comments:
- “Was not an easy week at the firm.”
- Although the layoff victims had to leave the office that day, their bios will remain on the Kasowitz website for three months (which is also the length of the severance period). So you can’t tell whether someone you know got laid off by trying to look them up on the KBTF homepage.
- “Kasowitz definitely suffered last year. Doug Lumish, who opened the SV office in 2011, left [last spring] to move to Latham & Watkins, and took a massive amount of business with him. It was a disappointment for the firm. People have been concerned for some time now.”
As we mentioned in one of the updates to our prior post, Marc Kasowitz issued a memo. If you have a copy of that memo, or any other information to share, please email us or text us (646-820-8477). You can take a photo of the memo with your personal smartphone and send to us as an image to minimize any electronic trail. Thanks.
UPDATE (12:55 p.m.): One Kasowitz source shared this (somewhat upbeat) assessment:
All I’ll really say is that there was extreme panic throughout the firm during that week. No one knew whether more cuts were coming. However, we were told that’s it, and there’s no indication for anyone to think otherwise. Seems like the dust has settled.
Fingers crossed, wood knocked. Good luck to all current and former Kasowitz lawyers and staff.
Kasowitz Layoffs Tied to End of Credit Crisis Cases [New York Law Journal via Morning Docket]
Kasowitz’s Valley IP Partners Going to Latham [American Lawyer (sub. req.)]