CADWALADER WICKERSHAM & TAFT — ONE INSIDER’S TAKE
Cadwalader suffered a reputational and morale hit with their layoffs back in 2008. As well as a huge drop in revenue and profits due to their adoption of a “hire as many cap markets associates as we can while times are good” even if it over-focused the firm. Then, like a corporation rather than a law firm, they dropped those associates as soon as things went south.
At this point the partners [ousted] Bob Link and his “shark tank” philosophy and placed Chris White in charge. Chris genuinely attempted to change the culture of the place, hiring McKinsey to consult on overhauling pretty much every aspect of the firm’s policies and management (including a new focus on developing partners from within and improving associate morale with things like switching to a non-hours-based bonus system, to be more like what the partners like to think of as their “peer firms,” i.e., Cravath and S&C). Also, Greg Markel and Chris White became more of the face of the firm, two attorneys more in the white-shoe mold than Link.
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At the same time, some policies continued from the Link era — for example, the recruiting of Lou Solomon from Proskauer, as a continuation of the lateral partner focus rather than the “build the firm from within” focus.
Over the past few years however, despite Chris White’s efforts (or perhaps his position wasn’t genuine), the McKinsey project has only been half successful. While it has led to the creation of committees which have overhauled things like bonuses, it has also led to an attitude within the partnership that thinks becoming more like the “peer firms” means, paradoxically, falling back on the Link-era attitude.
The firm has been loading up on capital markets associates, to the point where it seems there is at least one lateral hire a week. At the same time, the firm brought on Jim Woolery, who is turning management into a bank and allowed what amounts to a coup in the litigation department, replacing Markel with Solomon on the firm’s management committee, and letting him further take over the litigation department. The moves — together, along with others — have refocused the firm as if it were 2006. Churn money and fire associates as commodities if necessary.
My understanding is every department but capital markets has slowed considerably. Litigation has conducted a number of stealth layoffs. They will categorize them as “performance based” but this is a lie as at least half if not more of the associates did not make hours. The partners have taken no responsibility for the drop in work.
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The word out now is that the firm is “slimming” for profit reasons even though it was apparently one of the firm’s more successful years for both revenue and profits. [Ed. note: In 2013, the last year for which Am Law numbers are available, the firm saw revenue growth and a slight dip in profits.] The McKinsey program was more about partner profits than associate morale, and the management is repeating the same mistakes all over again and, if anything, has become more heartless when it comes to morale and respecting associates and their job security than when under Bob Link.
After Two Years at Cadwalader, Woolery Leaves for Hedge Fund [American Lawyer]
2 Wall Street Deal Makers Form an Activist Fund With a Twist [DealBook / New York Times]
Earlier: Musical Chairs: Legal Celebrities on the Move
Associate Bonus Watch: No Billable Hours Requirement Still Equals High Bonuses At This Firm