Wednesday, June 26, 2013
Contradicting yesterday's post that at least one legal consultant predicts more Biglaw layoffs will follow after those announced by Weil Gotshal on Monday, today's AmLaw Daily carries a story in which several representatives from "peer" firms say that Weil's situation is unique and thus unlikely to be repeated elsewhere.
Despite speculation that others might follow in Weil, Gotshal & Manges’s footsteps after it laid off 60 associates and 110 staffers Monday, the leaders of several large law firms tried during conversations with The Am Law Daily Tuesday to distance themselves from the possibility that they will make layoffs, pointing out that Weil's situation may be firm-specific.
The leaders of six Weil peer firms who agreed to speak say they are not currently considering lawyer layoffs, and five of the six said they are not looking at staff cuts either. Leaders of 15 other Am Law 100 firms either did not respond to calls on the topic or said they had no comment. Several firm leaders said they did not want their names attached to a story about layoffs, citing their experiences during the last season of layoffs in 2008–09, because the layoffs received negative press attention.
“We are not planning any layoffs,” says the managing partner of one top New York firm. "We don't have excess capacity. But that said, it's a very fragile environment."
. . . .
Several firm leaders note that the stresses facing Weil may be the result of its focus on bankruptcy and restructuring, a practice in which it dominates the market. That practice, these managing partners say, generated heaps of work for both corporate lawyers and litigators during the downturn. But several huge mega-bankruptcies in which Weil has played a role have either ended or are winding down. They include Lehman Brothers, General Motors, General Growth Properties, and Washington Mutual Inc. “An enormous percent of their revenues come from bankruptcy,” says one firm leader. “It has kept the whole firm busy."Despite Weil's status as an elite firm—it ranked 17th in profits per partner in 2012, according to The American Lawyer's latest Am Law 100 survey—the layoff news "didn't shock me," says another leader of a top national firm, "not because I anticipate that more firms will begin laying off people, but because of the unique nature of Weil's bankruptcy practice. You tend to have one mega-bankruptcy at a time. Weil had more than one. So you end up pulling in your corporate lawyers, your litigators. And that work ends, and if you don't get lucky enough to have other matters come at the same time, you've got a problem."
Continue reading here.