So You Want to Be A Lawyer.

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<p>Yes… but you left out WHY they’re doing so well. It’s not because business is booming but because they trimmed fat out of their firms and downsized the number of staff and attorney’s to limit their cost basis… exactly to my point.</p>

<p>Yeah if you’re in with an established position in these firms you’re probably fine but the point of this thread is that’s it’s really bad for the new guys now. Even these big firms that you cite recognize that to maintain performance they need to be able to do more with less… </p>

<p>[Nationwide</a> Layoff Watch: Paul Weiss Staff Attorneys - Above the Law - A Legal Tabloid - News, Gossip, and Colorful Commentary on Law Firms and the Legal Profession](<a href=“http://abovethelaw.com/2009/10/paul_weiss_staff_attorney_layo.php]Nationwide”>http://abovethelaw.com/2009/10/paul_weiss_staff_attorney_layo.php)</p>

<p>[Kirkland</a> Rings in New Year with a Bang | Law Shucks](<a href=“http://lawshucks.com/2009/01/kirkland-rings-in-new-year-with-a-bang/]Kirkland”>http://lawshucks.com/2009/01/kirkland-rings-in-new-year-with-a-bang/)</p>

<p>[Staff</a> Layoff Watch: Gibson Dunn Lays Off 36 Staff - Above the Law - A Legal Tabloid - News, Gossip, and Colorful Commentary on Law Firms and the Legal Profession](<a href=“http://abovethelaw.com/2009/03/gibson_dunn_36_staff_layoffs.php]Staff”>http://abovethelaw.com/2009/03/gibson_dunn_36_staff_layoffs.php)</p>

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<p>In China, police=lawyer, judge, jury. </p>

<p>We need more police. There are plenty of openings for police in most areas. I was surprised when I learned how much police officers make. They probably make more money than the PD’s who defend the criminals they arrest! </p>

<p>In my city, you can make 50-60 grand your first year on patrol. Not bad, if you ask me, and you only work 35-40 hours a week. Granted, it is not a easy job, and most people don’t want to drive around on patrol. </p>

<p>Also, a lawyer is a class above a police officer, no matter if the police officer makes MORE money. Being a lawyer enhances ones status.</p>

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<p>Rocketman, you’re going to have to do better than that:</p>

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<p>Yes, they were laid off, but I doubt firing staff attorneys was the real crux of Paul Weiss’s performance last year. They aren’t paid nearly as much as associates, of counsel, or partners.</p>

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<p>This happens every year at Kirkland. Non-equity partners who are clearly not on the equity track are shown the door. Again, there was a net increase in headcount. Clearly, the fat trimming is not working so well if you end up with more people in the end. Oops.</p>

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<p>Again, strongly doubt that staff layoffs contribute significantly to the increased numbers we’re seeing.</p>

<p>Didn’t you read the leaked Simpson Thacher memo, discussing how associate layoffs really didn’t save firms that much in the end?</p>

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<p>PS. Business actually IS booming at those places. DPW, S&C, and WLRK are getting the lion’s share of Wall Street work. Kirkland and Weil got their hands on some of the biggest bankruptcy cases ever. Top litigation shops were still frequently sought out, especially for IP lit (which explains Irell, Kirkland, Quinn, and Boies relatively good performance).</p>

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<p>flowerhead I’m sorry but you’re not making any sense. On the one hand you’re saying there’s no problem and firms are doing fantastic but on the other hand the very firms you cite issue formal statements to the press like:</p>

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<p>So they’re doing great and having no trouble with increased price competition but are worried about their cost basis to the point that they’re issuing press statements saying they’re taking “appropriate steps” to operate in the “most cost-efficient manner?”</p>

<p>Also, of course those layoffs don’t fully account for all the profits… they only scratch the surface. Firms also reducing hiring, expect more hours from junior staff, cut back on office perks, adjust bonuses/compensation just to name a few.</p>

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<p>I don’t know how old you are, but I can tell you that I remember hearing essentially the same arguments back in the 70s; and then again (to a lesser extent), in the early 90s. That the good times aren’t coming back for a long long time, if ever.</p>

<p>So I’m a bit skeptical.</p>

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<p>Not saying there’s no problem. I’m just saying that, clearly, some firms are still capable of commanding extremely high rates with their clients. </p>

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<p>You honestly believe that cutting some stuff really accounts for GDC’s increases? That’s pretty delusional. </p>

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<p>Hiring at GDC was normal this year. But they are usually conservative, so it’s not really informative. I’m pretty sure DPW, S&C, WLRK, Quinn, Paul Weiss, Debevoise, Cleary, and Bois made the same number of offers this year too.</p>

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cut back on office perks,

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<p>None of my friends at the above firms have encountered this.</p>

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<p>Maybe, maybe not. The above firms, except for WLRK, are not typical market leaders when it comes to bonuses. Bonuses were lower this year because Cravath, a traditional market leader, set the level, and others followed. Bonus amounts were simply not as revealing this year.</p>

<p>But clearly, some firms still made bonuses where the count. WLRK give 50%. Irell still does profit-sharing with associates. Boies dos the same. Kirkland went above market for most associates rated with class and all associates rated above class. </p>

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<p>All of the above firms still pay at least $160k…</p>

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<p>That you’ve heard the same arguments before does not discount my argument.</p>

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<p>I would be overjoyed if this “increasing trend” you have observe continues through the next recovery, but history suggests it won’t.</p>

<p>Your argument is basically that clients won’t go back to BIGLAW once they learn they can get decent service elsewhere. However, this fact has been widely known for years. During every downturn, there are clients who engage in cost-cutting and large law firms who engage in layoffs. </p>

<p>And yet somehow BIGLAW has managed to do just fine. So again my question: What exactly is different about the current downturn which makes you think the trend you have observed will continue?</p>

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<p>It’s already been said several times that staff cuts are only one aspect of cost cutting. </p>

<p>I don’t doubt that you’re friends say things are rosy. However the fact remains that even those firms which you insisted are doing great have made public comments that they’re under pressure to be more cost competitive. </p>

<p>That was my point and it’s something that even big firms confirm publicly–even those you insisted were above the issue.</p>

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<p>I think it does. Pretty much every time there is a bust (as well as with every boom), there are people who say “this time it’s different.” So if you are claiming that “this time is different,” it seems to me you need to make a compelling case.</p>

<p>It looks like all you’ve done so far is present your conclusions.</p>

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<p>Really? I’m simply presenting conclusions because I’m assuming you’ve read all the literature on the matter. Clearly, you haven’t.</p>

<p>Unemployment will take years to get back to normal; even if short-term discount rates were recently raised, there’s no evidence at all that the Fed will raise overall interest rates or begin to withdraw their overall emergency measures on loose liquidity in the near future. </p>

<p>The government is in a massive regulatory dilemma: On the one hand, they can impose regulations on the sort of transactions that triggered the financial crisis; but if they do, they risk banks moving to countries with less regulation (London is currently the most attractive option, and they are selling themselves hard). On the other hand, if they fail to impose regulations, we risk repeating history. On either front, we risk losing more jobs for the people. There are a lot of problems. A lot.</p>

<p>It’s really cutesy to utter lines like, “what goes down must come up,” etc. But in the end, you’re just revealing your ignorance of the facts.</p>

<p>PS. The above is just a fraction of the problems that are stunting any sort of “boom.” I recommend reading WSJ, NYTimes, seekingalpha.com, etc.</p>

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<p>That’s a very valid point and you’re right, perhaps everything will go back to normal but from my own perspective there are a lot of things different about this time than earlier periods.</p>

<p>In the past the cost cutting was more of a knee-jerk reaction than a through analytical process. From what I’ve seen myself clients are now much smarter about how they source services and analyze the results–in a way the combination of new legal technologies and the downturn’s call for cost cutting created a perfect storm. </p>

<p>Our company recently implemented e-Billing and similar technologies. In the past paper bills arrived, got a cursory once over and were approved with little question. Today it’s a whole different story. Every line item is scrutinized. Our ability to do that meant we could also develop detailed engagement terms with our firms. </p>

<p>A retrospective analysis found, not surprisingly, that many firms were overstaffing matters, charging more hours than we agreed to, submitting disbursements that we didn’t agree to etc.; however in the past all that just got paid. Today all that’s immediately rejected and the firm gets stuck with the charges.</p>

<p>Furthermore, this has all changed our methodology towards sourcing legal work in the first place. When the downturn hit, just as we got up to speed with our technology, we were ready to play hard ball. </p>

<p>We literally negotiate down to the penny. Your firm wants to bill us 15 cents a copy? I’m sorry our outside counsel policy only permits 8 cents and if you bill us more we won’t pay. You sent two associates to this hearing but we only agreed to one. In the past we paid because nobody noticed… today we notice and the firm is stuck with the bill. The days of padding the bills are over–at least for us and those like us. </p>

<p>We now have huge databases of attorney rates by matter type, experience, success factors, etc. In the past sourcing basically got a once over on the expected total cost of the matter and someone would say ‘yeah that looks good’ and the papers were signed. Today we compare each attorney rate against the competition and use this as a negotiation tool. We know who they want to staff on a matter, how experienced they are and what they charge relative to the competition. </p>

<p>If they want to put Joe Smith on the matter we’ll say “OK that’s fine, but Joe is only a second year associate and yet you’re proposing charging a 20% premium on the competition for this level of work… that’s not going to fly on this matter so either staff someone more junior on this basic work or reduce Joe’s rate for this matter.” That sort of thing never happened before–we simply didn’t have the data because it was all hidden in stacks of paper in filing cabinets–but now it’s all part of our standard sourcing practice. </p>

<p>That just scratches the surface but begins to highlight what’s different now vs. earlier downturns. We now have the ability to do all the above and much more… and when things pick up again we, and many others, aren’t about to change the way we source and evaluate our legal services.</p>

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<p>They can say whatever they want publicly. Actions speak louder than words. Rates for the above firms are at record levels, with some being higher than they were even in the boom times (probably a reflection of the strength of their bankruptcy practices, if anything).</p>

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<p>That’s correct. And it’s not my responsibility to combing through the literature looking for evidence to support your claim.</p>

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<p>Based on what measurement?</p>

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<p>Are you saying that the government has never faced a dilemma like this before?</p>

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<p>Please feel free to specify a few of these “facts” of which I am ignorant.</p>

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<p>Errr… yes, but it is your responsibility to comb through the literature to support your claim. </p>

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[The</a> New Poor - Despite Signs of Recovery, Long-Term Unemployment Rises - Series - NYTimes.com](<a href=“http://www.nytimes.com/2010/02/21/business/economy/21unemployed.html?hp]The”>http://www.nytimes.com/2010/02/21/business/economy/21unemployed.html?hp)</p>

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<p>In part, yes. Derivatives are a relatively recent financial phenomenon (though some will contend that they’ve been around since the days of Jesus). Only in the last few years did we see derivatives rise to astronomical levels in the form of credit default swaps, etc. With increased use of derivatives, there’s a massive mess to sort through: Balance sheet problems, valuation problems, collateral problems, liquidity problems, regulatory problems. What’s worse is that for every securities law you can envision, there’s always some way to work around it through a derivative. Thus, crimes like insider trading and “securities fraud” are much more rampant at the derivatives level. </p>

<p>You seem to have no idea why AIG got hit the way they did, and why we had to rescue them. You also seem to have no idea why Bear Stearns and Lehman Bros collapsed. This collective ignorance seems to be feeding your optimism.</p>

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<p>Right… so actually everything is just rosy, better than ever in fact, but they’re going to lay some people off just for fun and then issue press statements saying that they’re facing increasing pressure on costs, but just for a laugh. Wow, that’s an amazing business strategy.</p>

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<p>And these problems are still occurring, by the way. Look at Greece, who managed to evade EU debt benchmarks by taking loans through currency swaps, thus allowing their balance sheets to look clean. Who peddled these derivatives to Greece? Goldman Sachs. </p>

<p>The CDS spreads on a Greece sovereign default are astronomically high at the moment. Let’s just say that many have much to gain, and many more have much to lose from such an event. It’s not altogether clear, though, who the winners and losers will be, though. This time, though, the American banks made a bet against Greece, and they’re going to win. In 2007, American banks made a bet against the American people (there’s an article on Goldman marketing fishy mortgages, while simultaneously seeking risk insurance on them); they won then, and the American people lost.</p>

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<p>This is a lovely strawman of my claim. </p>

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<p>Huh? Firms layoff people all the time. Even in a good economy, do you actually think those 100 student summer classes stay at 100 until year 8? No way. And the reduction in numbers isn’t just attrition; people are fired.</p>

<p>You can’t fault a firm for being more efficient. My argument is that clearly some firms are continuing to command sky-high rates. You haven’t seemed to refute this yet, and I don’t think you can.</p>

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<p>Published one year ago:

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