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Nothing Says Economic Recovery Like Mass Layoffs
Submitted by Michael Krieger via Liberty Blitzkrieg blog,
Top Law Firm Weil, Gotshal & Manges Announces First Mass Layoffs in 82 Years
Nothing says economic recovery like one of the most profitable and prestigious law firms in the nation announcing mass layoffs for the first time in 82 years. Yep, four years after the so-called “recovery” began, things are so good that Weil, Gotshal & Manges has decided to cut 7% of its associates and slash annual compensation for 10% of its partners by hundreds of thousands of dollars.
As the article below notes, there is still massive overcapacity in the legal profession and this announcement is likely to spark a wave of layoffs in the industry. Not to worry though, Blackstone will continue to place all cash bids on empty homes in Nevada and Arizona. From the New York Times’ Dealbook:
One of the country’s most prestigious and profitable law firms is laying off a large number of lawyers and support staff, as well as reducing the pay of some of its partners, a surprising move that underscores the financial difficulties facing the legal profession.
Sixty junior lawyers, known in law firms as associates, will lose their jobs. That amounts to roughly 7 percent of Weil’s associates. Roughly 30 of the firm’s 300 partners are having their annual compensation reduced, in many cases by hundreds of thousands of dollars. And 110 staff employees – roughly half of them legal secretaries – are being let go.
Dan DiPietro, chairman of the law firm group at Citi Private Bank, said that there were too many lawyers at the country’s largest firms, estimating the excess capacity at as much as 10 percent of the lawyer population. He believes that the profession could possibly experience a wave of job cuts.
“Our market share has been improving, but the market has been shrinking,” Mr. Wolf said.
“We believe that this not just a cycle but that the supply-demand balance is out of whack across the industry,” he said. “If we thought this was a cycle and our business was going to pick up meaningfully next year, we would not be doing this.”
The mass layoffs are the first in the 82-year history of Weil, which has 21 offices across the globe and headquarters high above Fifth Avenue in the General Motors building, one of New York’s most coveted business addresses. Last year, the firm posted revenue of about $1.2 billion, and its profits per partner ranked 13th of all firms nationwide.
Several industry experts informed of Weil’s decision applauded the move. Peter Zeughauser, a law firm consultant, said that many firms were in denial about the continued slack demand for their services, and Weil’s cutbacks could pressure them into getting leaner.
Good luck with that taper Bernank.
Full article here.
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Finally! This is great news. Lawyers without jobs!!
And the futures are green!
If China needs money that badly, all they have to do is sell a bunch of the U.S. treasuries and bonds they bought over the past decade. Oh wait....Benny is going to start selling all that stuff also. Who's to buy it up? Oh shit! We're fucked!
What's China's CB going to do with those dollars that they can't do with UST's today?
Fascism doesn't need lawyers, whocouldanode?
Lateral move into politics methinks, as we'll probably need some replacements soon enough.
i want to say somethng sarcastic, but my mood is just too bright
These aren't lawyers.....they are fascist shills for the corporatocracy....they will get what they deserve for their silence of our constitution being slaughtered .....fuck these POS
Why would they need such a large pool of lawyers when the only people being prosecuted are the little guys who can't afford their services?
This is good news only if they are fired by a squad.
Because there is both criminal AND civil law...
Of course, the premise remains valid... that people can't afford their services for civil matters either... I'm also really skeptical of the remark that their market share is increasing... In general, the bigger firms are getting shit on as the rest of the lawyer pool is forced to hack and slash fees and better market themselves... The burden of proof is always on anyone claiming anything other than cannibalization.
My solution: increase the jurisdictional ceilings for district/municipal courts and let pro se litigants duke it out in the bouncy castle court... Then you can probably hire the worst fly-by-night lawyer in your town and still win...
Also, what will also happen is that these associates will get rehired as "independent contractors" to keep costs low... they'll be doing the same thing they did before... in exactly the same way... albeit for the samish/slightly less net pay. Presuming they don't put out their own shingle, take as many clients with them as they can, and do their best to compete... taking even more market share.
Amazing. Supply / demand forces actually having an effect. Quick, someone get the government in there so they can fix everything.
OT but relevant...I work in sales in the commercial-construction equipment industry in N.California and let me tell you what I see. The ONLY construction going on is in healthcare (Kaiser, CHW, assisted living), prisons (hmmm), courthouses (hmmm), and a huge Google data center (double hmmm).
A few years ago, I made a bundle in sales commish for a 14 story business complex that, to this day, has exactly 1 tenant. The rest of the building is an empty shell, a-la downtown Detroit. The layoffs in construction have been massive and there is no recovery.
These comments are disgusting. You should be ashamed of yourselves. The associates being let go are some of the best and brightest of our young people. You do not get these jobs by being a slacker. This could be your son or daughter or your neighbor's son or daughter. This is also terrible for the staff! Only someone truly sick takes pleasure in the misfortune of others!
They were part of the axis of evil. Bankers, Lawyers & Politicians.
Schadenfreude Bitchez!!
Guess what? If you watch TV, own an apple product, or know more about professional sports than the policy positions of your legislators, YOU are part of the axis of evil. Look in the mirror! We are all complicit in this evil system!
Same logic as the people who buy steaks attempt to proclaim, "I don't kill cows."
Monetary prolifigacy taints all with moral hazard...
I feel for just about anyone that is in a field, that as a result of downsizing, renders them unemployed.
That being said, that is how Capitalism is SUPPOSED to work. If there is no demand for your current skill set, get trained in a discipline where there IS demand.
As Michael Douglas pointed out so eloquently (paraphrasing), "I'm sure at one time there was a huge market for buggy whips. However, with the creation of the automobile, that market continued to shrink until it was almost non-existent. You may be making the best damn buggy whip ever devised by man. It's irrelevent. When you have an ever increasing market share of an ever decreasing market, something has to give."
Now I don't pretend to equate the practice of law with something as obsolete as a buggy whip however, it is common sense that if demand for your skill set wanes you adjust accordingly.
Or, of course, you can simply prevail upon the government to reapportion / reallocate productive capital into saturated sectors of the economy because , "They're our best and brightest."
If that's the case, what in the F..K are they doing getting degrees in fields where demand is so slack as to render them jobless?
The best of those being let go will move to another firm or start their own shops. As for the rest, they will likely end up doing "document review" jobs as contract attorneys, where they will be lucky to make 1/3 to 1/2 of their previous pay. It won't be the same "prestigious" work they're doing now. It will be the work that they previously delegated to others.
Those "ASSociates" might just have to trade down that Lexus for a 2yo Corolla.
BooHoo.
All the associates I know drive the corolla...
PS, the associates will probably make more money on their own and they'll have the added pleasure of not needing to suck dick to get the money... this is the risk that capital takes for training... it's why the apprentice system was dispensed with... now, the associates are easily substituted with new cannon fodder fresh from school. Those with dependency personality disorders and a lack of self confidence will end up staying long term. My suggestion to everyone in the position is to get established before the avalanche... when the big firms aren't around to hire all the scrubs, they'll be competing with you...
yes, they will most likely be brought into the same role as independent contractors.
The Chinese don't sell Treasuries for dollars
They go around the world, like in Africa, buying up resources, companies, farmland, and African potentates, paying people with the Treasury bonds
The African potentates don't 'hold' Treasury bonds, they immediately sell them in London for cash, which they immediately spend on bling-bling shite or stuff in Western bank accounts
As Jim Willie has explained, the UST bonds are being sent home to die ... the UST bond tower collapse on the way
Dr Jim Willie's recent articles
http://news.goldseek.com/GoldenJackass/
But then they are immediately bought with newly printed FRNs.....until the dollar loses its reserve status they can continue the ponzi......
Yeah, China isn't stupid. They buy oil, minerals and other commodities with USTs while the USTs can still purchase stuff. I wonder why Japan does not do the same...
Thank goodness some more people will now have healthcare.....not as many as expected as it turns out.
Totally worth killing the economy over.
It's gonna suck watching football next season with every other ad telling us how great our new system of health is for all of us.
I'm going to protest these propaganda pieces by DVRing the game on a ten minute delay. Then I can power over this shit and watch the end of the game at about the same time as the rest of America.
Disparaging comments about Dear Leader and his visionary policies for restructuring the economy and right-sizing US influence in the world will not be tolerated.
Forward (over the cliff)!
You can quit watching. I know you can. Maybe you can go watch some high school games. There is usually a bit of excitment and frequently some slapstick.
Wonder if anyone would trade the U.S. Treasuries and bond for gold? If China could, they would.
On the downside...some of these clowns will no doubt find new lairs to haunt...in politics...lobbying...
What is worse than one board lawyer? Many, many board lawyers.
@ Dr. No:
There's a fairly prestigious law school not far from me, and I know some retired professors from there. They have all pretty much told me that: "Law school is a waste of time, unless you come from a family that has its own practice".
Of course, they don't tell the students (or their parents) that little tidbit. Gotta keep that money rolling in to the school......
Absolutely... I have this same speech for any prospective law students who contact me about what to expect, etc.
If you don't already have a job lined up before you go OR you are incredibly specialized through prior degrees (although there are a lot of joint jd programs that allow you to split time to get specialized degrees) OR you have already identified and underserved market and you are certain that you can tolerate living there AND that it can pay your way, then you don't go... Obviously this is dependent upon the cost... there are actually law schools (decent) that a degree can be had for ~$25k in tuition... even if you take a total shit job post graduation (or put out your own shingle), it isn't incredibly onerous...
But if the kids are so bright that are headed for law school, they'll go get a trade job and never look back.
And yes, law school literally teaches you nothing about the practice of law... one of the most prestigious firms in my state's patriarch often stated, "it'll take me at least 10 years to train you how to practice law before you're worth anything." I'd say that's on the long side, but the premise is correct... law school is theory based, which has little to nothing to do with real practice... it's much more suited to appellate practice than your general, run-of-the-mill daily stuff...
This depends on whether you take the easy courses to improve your GPA, or practical ones to actually learn the law. Obviously, all of the 1st year classes are fundamental. After that, if you want practical courses such as bankruptcy, commercial paper, mergers&acquisitions, investment banking, etc. they are often available.
If you can make it through debtor creditor, bankruptcy, or any tax class without falling asleep, then you need to fucking quit snorting cocaine.
The issue of practicality can't possibly be advocated for classes that purely "tell" you things without having you actually involved in the process... This is why law school (and most all school for that matter) is ridiculous... I can watch a youtube video and be able to mimic a process... The entire exercise is purely a function of masturbatory monetary policy... We used to have an apprentice system... that worked... we've simply gotten too cute for ourselves, forgetting how we got here. The entire academic infrastructure is a total joke... in economic terms, malinvestment.
Could this be correlated with the department of education somehow? I mean, technology has gone down in price over the years but the cost of education continues to rise...how can this be?? And yes, apprenticeship is clearly a better way to learn (and cost-effective way to train potential employees).
Ever notice how you can borrow 200K to get an Ivy Leauge degree in sociology but there are no Stafford/Pell loans for trade schools? It's almost like they want us to be uncompetative in the world economy.
With politicians,economists and CEO's being in even worse repute, I have to say the lawyer jokes have eased off lately. Good to see them back!
Nothing says recovery like this.. "Number of Americans on Food Stamps is Bigger than the Population of Spain" http://tinyurl.com/mem7o7x
Since we have no constitution they've effevtively been made redundant. Heaven help us if we need one.
No tears for the parasitic ones though.
A sick host is bad for Parasites.
They're firing the lawyers, but keeping the laws.
I love the smell of pink slips in the morning.
What do you call 10,000 lawyers at the back of the unemployment line?
A good start...
The collapse of non-value adding or non-productive "industry" is a good sign.
You can not trade litigation for food, nor can you export it, nor produce efficiencies of scale, nor innovate to save energy and materials in manufacture via litigation. Litigation does not cure cancer. Litigation is necessary in centrally-controlled markets, thus indispensable to price cartels and central planners.
....here, let me help....replace 'non-value added' with 'negative value added'.
You can't eat litigation.
Nonsense. Rule of law is a fundamental requirement of capitalism (not that what we have is capitalism, but I digress).
Not at all... It is on paper, but the rule of law is always dispensed with once the opportunity presents itself... this is why classification of state economies into pre-determined "types" of economies is asinine.. The only thing you need to know is that self interest is ever present.
Socialism fails for lack of competition... Capitalism fails for abundance of competition...
Kind of... it's just an objective indicator that you don't have access to legal justice... (given the courts have a monopoly on that).
In a land with no laws, what is the point? All you need to do is get a government job or work for a bank.
CNBS was lamenting how Corzine wouldn't get a fair trial if the CFTC actually brings a suit against him.
These are the same CNBSers that praised Corzine for his hands on trading at MF Global but of course he only ran the company and traded for it, how would he know how much money there was to trade with???
Just shared link on Criminalzine below.
they've all been told "they're next."
Corzine is a CNBS is an icon for a corporate leader. Instead of featuring him in greed and scams they praise the crook.
No wonder people turn off CNBS and their viewer numbers have been dropping. Their producer scolded guest for being against the grain and their BS of the day.
just think of the security needed for a corzine trial- that's 0.1% incr in the gdp and a 0.2% incr in jobs just right there. Why that's the way to get this economy going employing lawyers, judges, cops and private security jobs - just put on trial all the elite criminals ,, jobs jobs jobs. shit too early to be drinking.
The US market needs lawyers to:
1. Prosecute patriots and those who undermine the US of A by obeying the Constitution
2. Protect criminals (lead by the government)
of course, the flip side is that J6P needs lawyers to defend his rights... to enforce the legal obligations of others... to prevent or mitigate government actors from over-reaching... etc.
Peak Lawyering. With all the lawyers shitting on the Rule of Law, it was bound to happen.
Buy a Politician
Hire a Lawyer
What everyone seems to overlook is that courts are, in the largest part, bound by law... if you buy a politician, then you already have the court in the bag... the court is bound to follow the law, regardless of how retarded, so long as it is not unconstitutional... it isn't lawyers that have shit on the rule of law (remember, there are two sides to every trade), it's the legislature... they don't want there to be a rule of law because their benefactors don't want it... simple as that.
The constipatution is just so much asswipe these days so no need for lawyers. Kind of like reporters who are just fascist propaganda outlets, who needs them?
We need a government stimulus program to put lawyers back to work! They could be writing new regulations, suing businesses, and filling holes. It will pay for itself--9 out of 10 economists agree that the Keynesian multiplier will average to 10x.
There is plenty of work to be done prosecuting fraud -- TPTB just will not allow it to be done.
"Dan DiPietro, chairman of the law firm group at Citi Private Bank, said that there were too many lawyers at the country’s largest firms"
"Dan DiPietro, chairman of the law firm group at Citi Private Bank, said that there were TOO MANY LAWYERS'
FIXED.
Really one of the key statistics why the US economy is insane and corrupt
1 out of 300 Americans a lawyer ... over 1 million lawyers
In a country with no justice !
Which led hundreds of thousands of psychopaths to become USA lawyers, hoping to get paid to help oligarchs screw and jail common people, while robbing them of everything they have in legal fees
The American 'system'
That is the problem for an upcoming American revolution ... there will still be 1 million lawyers thinking they have a right to destroy, defraud and rob their fellow citizens ... they will just try to start the whole legal corruption - judge bribery game going again
Actually, the lawyers are supposed to be guardians of the peoples' rights. Unfortunately, lawyers have failed to do their duty on this score. When producing goods pays better than producing services, things will change.
...and that is one reason we have bloated govenment, lawyers become politicians AND THEY DON'T TRUST ONE ANOTHER.
Gee, what a shame.
"Federal regulators are poised to sue Jon S. Corzine over the collapse of MF Global and the brokerage firm’s misuse of customer money during its final days, a blowup that rattled Wall Street and cast a spotlight on Mr. Corzine, the former New Jersey governor who ran the firm until its bankruptcy in 2011."
http://dealbook.nytimes.com/2013/06/24/u-s-civil-charges-against-corzine...
That ought to put quite a few lawyers to work for decades. Of course we will be paying for the feds. After about 25 years of legal wrangling, I'm sure they will settle on a fine that takes about 10% of what he has been able to squirrel away.
Sorry; but civil charges......pathetic and insulting to those robbed.
Why not CRIMINAL CHARGES, for a CRIMINAL
Well lawers getting laid off, that's definitely not bad news. I hope they all go bankrupt.
That sound you just heard was thousands of students with over 100k in debt all jumping off bridges.
Whatever the snark levels, there's a serious issue here, and I hope they have enough self-faith to decide to default rather than fall into despair.
Here's your degree.......sucker.
Can't default/discharge student loans if that is to what you were referring.
There is a way, you just have to be nucking futs.
http://www.zerohedge.com/news/2013-05-28/student-loan-bubble-just-discharge-it
The Ninth Circuit discharged a student loan in June.
Not quite on the road to despair yet, for some -- they're suing their law schools.
No one is safe. You might think you are, that can change fast.
All those oBUMMER contributions down the drain. I can't stop crying.
My God! Not the lawyers!
(/sarc)
Man, I wouldn't have used the sarc tag just to see how many down votes I'd get from the newbies, lol.
No need for them, theft and murder have been legalized.
local major hospital here in MD is starting layoffs and has had pay frozen, this is a non profit hospital where the CEO makes $800,000/yr for well breathing and attending meetings. seems this hospital fears negative economic impact fo some goverment plan, what is it let me think, what is coming in 2014?? hmmm
Everyone here will notice some previsouly foreshadowed names here regarding mass layoffs:
http://www.labor.ny.gov/app/warn/
Wow, what a long list! Some "recovery" we're having, isn't it?
And some of these are big names!
Kaye Scholer, Knight Capital, JPMorgan Defaults/Originations, Pearson Education, Time Warner, Xerox, Hilton, Capital One, Credit Suisse, Teva, Tyco...
Maybe there will be more pro bono work?
Sometimes I wish that guy would just keep his mouth shut;)
If the SEC and the CFTC had chosen to prosecute versus fine the TBTF and their respective management, we'd be seeing hiring, not firing in this sector. Only time in my life I would have applauded that growth.
Weil is a big bankruptcy firm, and bankruptcies are way down. Perhaps a contrary indicator?
I'm gonna get drunk and fall down. Then I'll call the shysters at Weil Gotshal and put them to work. It's a win/win.
At $500 per hour, many just do without.
A lawyer's cost is what is out of whack. It always has been.
No one cares that lawyers went to school for 10 years.
"Yep, four years after the so-called “recovery” began, things are so good that Weil, Gotshal & Manges has decided to cut 7% of its associates and slash annual compensation for 10% of its partners by hundreds of thousands of dollars."
In an 'unrelated story' - all of those impacted by the changes appear to have been vocal opponents of the administration, or, even just republicans. NSA and IRS say they weren't involved with the layoffs.
You know, the problem here is pricing. Weill and a host of other such firms charge ridiculously high amounts for their "services." Over a grand per hour in some cases. I mean, who the hell are these guys? And how big was the problem? Life-threatening? They over-staff, invent all kinds of crap to worry their clients about, waste time on said crap (of which there is a near-infinite amount these days), and then expect people in a shrinking economic world to continue to pay those huge bills -- often for the time uselessly spent. Well, that era is drawing to a close. Too bad, isn't it?
It's a form of market failure. It's not like you can get the clients if you are willing to charge, say, only $100 an hour. The internal lawyers don't want to hire firms that aren't big brand names, in case something goes wrong.
I would rather see these guys working for a private firm trying to defend the rule of law,
than working for the .gov breaking the rule of law (what is left of it).
Jump, you whores.
Lawyers getting canned and "Good luck with that taper Bernank" all in the same article, you gotta love it.
There is a huge move by law firms into outsourcing. Why pay a starting associate $100K/year (or more when you figure in overhead, office space, etc.) to do routine scutwork, when you can get a Filipino who is just as smart and hardworking for less? He speaks just as good English and is about as hardworking, and you can pay him $24K a year - and he can manage a bunch of legal secretaries who are paid far less. There are huge office buildings in Manila filled with back office operations for US companies.
Yep if they have to pay for it, they will outsource it.
But ther confidence numbers are up to today!!!!1111 Economy is "recovering"!!!!111
We are in for some deep shit, son.
I am all for lawyers being unemployed, that is if you cannot arrange for the whole bus of them spontaneously exploding in flames
No wonder...half the country on welfare and the other half are lawyers.
Whatever happened to the term "reduction in force?" Sounds much better than layoff.
When I went to law school (1959-1962) at the University of Chicago there were 50,000 lawyers in the country. Today we produce a bumper crop of 50,000 lawyers a year. What happens when you produce more than is needed -- assuming Bernanke does not get in the way? Prices (read: wages) fall.
"Want fries with that?" ...and put it on the board!
Someone call JHKunstler-we've finally acheived Peak Law.
That's what you'd expect, but something strange is happening instead. The prices are staying high and even increasing - it's just that the # of lawyers hired goes down. Law has become a tournament profession, where a small number get exhorbitant incomes, while the majority just scrape by. The average lawyer in NY does not make these big bucks unless they work at a large firm or own their own successful smaller practice.
Everyone who thinks mass layoffs of lawyers is a bad thing, hold up your hands......
S___, read all those boring books for what?
so would this mean we have a "bubble in lawyers"? sounds cool!
While I think the field of law is an admirable pursuit, it is another area of the faux economy that is fairly non-productive. Yes it is a service but all that paper being pushed about and all the talking really don't produce much tangible. The income bracket for a lot of lawyers is in the ball park with the banking industry...another where there's little produced but a lot skimmed.
Lawyering for defense of private property rights is important, but a lot of this litigious behavior is just stupid people dumping coffee on themselves at McD's and the like.
A lot of people here seem not to understand what firms like this do. Firms like Weil are jointly referred to as BigLaw. BigLaw doesn't handle things like divorces, drugs, DUIs, etc. They handle things like mergers and acquisitions, buyouts, corporate bankruptcies, etc. BigLaw is nothing more than one more arm of Big Finance. Normal people don't get into BigLaw, you very typically have to be from one of the top 14 law schools in the country or be an absolute rock star at your lower-ranked school.
Below BigLaw is ShitLaw, which is what most people imagine when they think of lawyers. Most people working at those firms are making typical office drone pay, but unlike other office drones they're holding $100k in debt, so they hold onto their $55k job for dear life. If they lose it, they fall into the law school abyss, from whence careers never recover.
McLaw? Better call Saul.
A lot of people here seem not to understand what firms like this do. Firms like Weil are jointly referred to as BigLaw. BigLaw doesn't handle things like divorces, drugs, DUIs, etc. They handle things like mergers and acquisitions, buyouts, corporate bankruptcies, etc. BigLaw is nothing more than one more arm of Big Finance. Normal people don't get into BigLaw, you very typically have to be from one of the top 14 law schools in the country or be an absolute rock star at your lower-ranked school.
Below BigLaw is ShitLaw, which is what most people imagine when they think of lawyers. Most people working at those firms are making typical office drone pay, but unlike other office drones they're holding $100k in debt, so they hold onto their $55k job for dear life. If they lose it, they fall into the law school abyss, from whence careers never recover.
Waitaminute-I KNOW the punchline to this one. It goes, "A good start!" buh-dum-dum!
Weil is a business law firm. No biz in Obamaville. Associates out the windows-walk the plank. Junior partners, 20% fixed draw cuts, no bonus. Seniors, increased draws.