As clients are, they *may* expect their firms to show some pain during the crisis.
Clients have fookloads of choice, and are starting to select on the basis of other things than "went to Balliol with Tarquin and he's a jolly nice chap". No doubt some will be watching to see if any firms are properly aunty.
Tbf he has a point - any successful practice will be aware that demand will come roaring back and they will be screwed if they then have to recruit and train new staff
The idea that any proper company instructs lawyers because someone went to college with someone is preposterous. We’re not in 1983. Intense competition for client work together with a price drive-down has been a thing for 15 years.
Wilfrid, I have been instructed on countless occasions by people I went to college with. And similarly have played in mates / instructed counsel on the same basis.
I find the threat of historic information and mutually assured destruction adds to the service both ways
I'm confident that the partnership of big firms will accept that PEP goes up as well as down, and that - as they did in the GFC - volatility in earnings is unavoidable to them as business owners, for which they're more than adequately compensated by their enormous pay packets during the good times.
In light of that I'm confident that big firms will treat their staff well, just as they did in the GFC.
Maybe I am being idealistic here, but I think the partnership route is already waaay less attractive to younger generations than it was back in the GFC and equally the status of Partner is a less revered one.
So I would suspect/hope, that shafted junior lawyers wont necessarily just bend over now and walk back onto the same miserable ladder after all of this is over
We might also find many fee-earners realising how easy it can be to work from home wondering why they accept the shit work life balance they have been dealing with.
A number of reasons dictate how we instruct. These range from quality of advice (most important), responsiveness, price and freebies to know the guy/girl, think they are a decent sort.
We wont instruct a firm where we think the partner in charge of a matter is a cvnt or the firm has history for acting like twots.
Tbf when I had a recruiter banging on about getting me to speak to Cadwalader a few years ago it gave me great satisfaction to say they were the one firm I would never ever work for, given they were the first ones to bin absolutely everybody in my area at the very start of the crisis (with statutory minimum and well before it got to the broader markets).
I invited said chinny to pass on that feedback but I'm not entirely sure that she did.
Law firm partners will do whatever they think is best for them.
That might include keeping people on through a quiet period in order to benefit from a surge of work later. People in insolvency / restructuring roles or who could go into such roles should be quite safe......
But let’s all be honest, City law is a nasty, brutal type of profession where nobody will spend a penny they don’t have to out of charity or humanity towards their workforce. So don’t be surprised to see large layoffs on minimum possible terms at the same time as partners continue to take very large drawings.
It will be interesting to see how many partners manage to avoid blatant lying and dishonesty towards their staff at times when they don’t think they are being recorded.
law firms have pretty thin cash reserves tbf and most can't just go to the equity markets if they need a bit more cash in a hurry
The bigger and better ones probably will behave reasonable insofar as they are able, tbh. I would not expect the magic circle to be laying off in number especially as there will be very considerable deal activity, and reorganisation / restructuring activity, once this is over. Shitshops in the fifth tier will probably behave as shitshops in the fifth tier do, i,e, badly.
I'm at a large shop and due to qualify in 5 months. We've already received emails saying that NQ decisions are being postponed until [unknown date] and that the firm will not be making any discretionary spending at all.
Salary decisions and bonuses paused, new hires to be delayed, no travel will be paid for (although appreciate that's not really happening at the moment anyway).
Not all of the firms were bad during the GFC but firms such as DLA did themselves no favours although that appears to have been largely forgotten by clients and staff. But they have remained on my most hated list.
we are currently in the ‘who moves first’ phase - no one wants to be the firm that starts kicking people out - they’d rather be in the herd behind when the news is less scathing
if a few firms come out with something positive before the carnage starts that may well change the complexion of the way the market handles it / let’s see
If you think clients and the wider public have anything other than the memory of a butterfly and the conscience of a psychopathic mass murderer you’re fooling yourself. The demand for cheap X is resonant throughout history. Sports Direct will be with us forever.
My firm has furloughed a few people but is taking the sensible view that there is no point in a knee jerk reaction of dumping lots of staff until we have a better idea of how long this is likely to last, etc. That kind of thinking is one of the reasons that I've stuck with them and this is now the longest period I've ever worked for one firm.
To give a more serious answer, i think it is still too early to tell at this stage.
Once it became clear that that GFC was going to lead to a prolonged slump there were cuts across the board. That included every MC firm, at every level of experience. Profits took a hit in 2009/10 (some more than others) but actually rebounded fairly quickly. The jobs didnt, though.
We will see what happens with the economy, but i think if we come to believe that there will be a long term downturn you will see comparable levels of redundancies. Only question is who will be the first mover. Who will be the "Latham" this time around? Or the DLA (yes, the legal market remembers how you acted. Dont think that we dont.)
I think the difference with the GFC is that it is still perfectly conceivable that there will be a quick rebound, and the proper firms dont want to shed staff unnecessarily.
Fvck me, this isn't British Leyland, it's not jobs for life.
Never ever instructing a law firm again because 8 years ago they were a bit nasty to people during a downturn? I wonder how you'd deal with real problems. Fact is that its a business and a law firm is no different. It of course is no choice between chopping 5 of Sandra, who works the phones and is a cost centre, versus Erin, who earns 700k a year but holds some of the firms key clients and is projected to bring in 2M of business next year. It's no choice at all.
To be clear, I work in house, am a cost centre and am therefore at risk of being chopped, but this is all in the nature of the game. And the fact is that when the market rebounds, as it will, everyone will find jobs again and the merry dance starts over. To look at this unprecedented situation and take a moral stand over future instruction shows huge immaturity, a narrowness of outlook and epic stupidity
@Foxbat - agreed; clients don't really care about such things, so long as the Partner they like / lunch with is still at the firm they will continue to push work that way.
Not being aunts to your staff is definitely a metric I care about. This is clearly only part of that - but there are generally lots of options of where to get your advice so why employ an organisation if you find their working practices distasteful?
Foxbat - the choice isnt binary- because law firms work on paying partners profits - so what the law firm could actually do is pay the person earning 700k per year 500k a year instead allowing the spare 200k to pay the wages of people who would otherwise lose their jobs. That is of course the choice of the partners together - and they have to rely on the 700k partner not walking out the door - which they wont if they are not a khnut
The owners of the firm are the partners they will do what is best for them as a collective first and foremost beyond anything else . Yes they could take a 200k haircut on their profit allocation to save some jobs but they won’t .
these partners as far as I can see have extraordinarily expensive life styles and expenses , not to mention mistresses and the like
as one of these partners who earns a lot and is regularly asked to make such decisions, I can say that not all firms operate like that. You can of course find plenty of examples of firms that do - but there are plenty that try to have a culture of being in it together - now granted - that means say everyone a hit - which I am more than happy to do if it means that people I have worked with for the last 20 odd years and their families can feed their families
Proper clients are not as personal to partners as errr those partners would have you believe. And if they are, then the firm has done a shit job of institutionalising them.
The silver circle firm I used to work for did an excellent job of dropping the department to four days a week but not getting rid of anyone unlike the regional firm I joined after work there who binned people and then cut the pay of the remaining people who hadn't been binned.
Partner X is usually on 700. His firm says it'll need to be 200k less. He flounces off to find a new firm.
When he explains why he wants to move does he say ... because they only wanted to pay 500 and I can't accept that? That'll go down well... you wouldnt tighten the belt..
Presumably they will all need to move in concert, and then no-one can benefit from moving.
If he is moving because actually his market position means he was worth more than he was getting full stop then there may be a reason, but nonetheless a firm is likely to think that they are someone who will bail when shit gets hard.
Personally I believe the way out is this:
Y1 - forego the 200k to save the troops
Y2 - beast the troops a little harder to say thanks for keeping me, and give them some of the spoils
Profit share is a relative measure - if he is positively contributing year after year then he could move for money in any event. So presumably his profit share is more or less what he is worth before the crisis. Why would he move to a firm where he has no network, he is not sure the clients will follow, where he will have covenants, where times are tough economically, where he will have no immediate job security for what is in essence a bit of short term pain. He won't.
What all washed up said, the better managed/run firms have been good in the main at institutionalising relationships see Slaughter and May who have only ever had one partner in its history leave for another law firm.
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No because the partners got shat on for 20 years for the privilege of shitting on others and they ain't givin up their shitty thrones for no virus.
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Which practices will be the worst hit?
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Will law firms accept a profits hit to protect staff jobs and salaries?
hehehehehehhehehehehehehehehehehehehe
nice 1 m7
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Hyoo has never met a partner of a law firm has he?
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As clients are, they *may* expect their firms to show some pain during the crisis.
Clients have fookloads of choice, and are starting to select on the basis of other things than "went to Balliol with Tarquin and he's a jolly nice chap". No doubt some will be watching to see if any firms are properly aunty.
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Tbf he has a point - any successful practice will be aware that demand will come roaring back and they will be screwed if they then have to recruit and train new staff
shitty firms will obvs just be shitty
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The idea that any proper company instructs lawyers because someone went to college with someone is preposterous. We’re not in 1983. Intense competition for client work together with a price drive-down has been a thing for 15 years.
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Which practices will be worse hit?
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Wilfrid, I have been instructed on countless occasions by people I went to college with. And similarly have played in mates / instructed counsel on the same basis.
I find the threat of historic information and mutually assured destruction adds to the service both ways
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I work for a very large PLC.
People are literally instructed because they went to college with someone in the 1980s.
Of course this is preposterous, but it still happens.
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move everything to Wills and Probate
Family Law
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From everything read and experienced law firms don't have a good track record of looking after their staff.
Those that do look after their staff during this period will do very well out of it when normality returns
Those that make rash decisions and shit on their staff are going to pay the price after all of this, as they should.
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This is going to be absolutely fooking brutal in City law. And I don't think there will be much sympathy for them.
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What puppy said it will be brutal, partners are all about here and now , adopting a short termisim approach .
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guess u called it unk m7
https://www.rollonfriday.com/news-content/exclusive-rollonfriday-calls-hiatus-pay-and-job-cuts-fieldfisher-and-more-take-savage
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Which lawyers will be first for the chop?
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I'm confident that the partnership of big firms will accept that PEP goes up as well as down, and that - as they did in the GFC - volatility in earnings is unavoidable to them as business owners, for which they're more than adequately compensated by their enormous pay packets during the good times.
In light of that I'm confident that big firms will treat their staff well, just as they did in the GFC.
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Massive heh @ Mr C. I've just snorted coffee over my keyboard.
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Maybe I am being idealistic here, but I think the partnership route is already waaay less attractive to younger generations than it was back in the GFC and equally the status of Partner is a less revered one.
So I would suspect/hope, that shafted junior lawyers wont necessarily just bend over now and walk back onto the same miserable ladder after all of this is over
We might also find many fee-earners realising how easy it can be to work from home wondering why they accept the shit work life balance they have been dealing with.
Or maybe I am just speaking tosh
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I only instruct my m8s. Human nature innit.
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A number of reasons dictate how we instruct. These range from quality of advice (most important), responsiveness, price and freebies to know the guy/girl, think they are a decent sort.
We wont instruct a firm where we think the partner in charge of a matter is a cvnt or the firm has history for acting like twots.
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Tbf when I had a recruiter banging on about getting me to speak to Cadwalader a few years ago it gave me great satisfaction to say they were the one firm I would never ever work for, given they were the first ones to bin absolutely everybody in my area at the very start of the crisis (with statutory minimum and well before it got to the broader markets).
I invited said chinny to pass on that feedback but I'm not entirely sure that she did.
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Law firm partners will do whatever they think is best for them.
That might include keeping people on through a quiet period in order to benefit from a surge of work later. People in insolvency / restructuring roles or who could go into such roles should be quite safe......
But let’s all be honest, City law is a nasty, brutal type of profession where nobody will spend a penny they don’t have to out of charity or humanity towards their workforce. So don’t be surprised to see large layoffs on minimum possible terms at the same time as partners continue to take very large drawings.
It will be interesting to see how many partners manage to avoid blatant lying and dishonesty towards their staff at times when they don’t think they are being recorded.
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what Dal S just said.
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law firms have pretty thin cash reserves tbf and most can't just go to the equity markets if they need a bit more cash in a hurry
The bigger and better ones probably will behave reasonable insofar as they are able, tbh. I would not expect the magic circle to be laying off in number especially as there will be very considerable deal activity, and reorganisation / restructuring activity, once this is over. Shitshops in the fifth tier will probably behave as shitshops in the fifth tier do, i,e, badly.
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I'm at a large shop and due to qualify in 5 months. We've already received emails saying that NQ decisions are being postponed until [unknown date] and that the firm will not be making any discretionary spending at all.
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Discretionary spending?
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Salary decisions and bonuses paused, new hires to be delayed, no travel will be paid for (although appreciate that's not really happening at the moment anyway).
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Salary
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Not all of the firms were bad during the GFC but firms such as DLA did themselves no favours although that appears to have been largely forgotten by clients and staff. But they have remained on my most hated list.
we are currently in the ‘who moves first’ phase - no one wants to be the firm that starts kicking people out - they’d rather be in the herd behind when the news is less scathing
if a few firms come out with something positive before the carnage starts that may well change the complexion of the way the market handles it / let’s see
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If you think clients and the wider public have anything other than the memory of a butterfly and the conscience of a psychopathic mass murderer you’re fooling yourself. The demand for cheap X is resonant throughout history. Sports Direct will be with us forever.
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Profits have to go up each year to keep a firm’s model going and sadly it’s still considered the best measure of a firm’s “success”.
Easier to shaft 10 staff on £70k p.a. than one partner on £700k p.a.
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Sorry to hear that you lost your job tarquin.
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Haha. Ha. Hahahaha. Hahaha. Ha. Ha. Hohohohohohohahahahah!
And then he said "accept a profits hit"! A "PROFITS hit"!!! OUR profits!
Oh, hahahaha. Hohohoho. Ohmygod. My sides are splitting!
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classier ones will to an extent, yes
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My firm has furloughed a few people but is taking the sensible view that there is no point in a knee jerk reaction of dumping lots of staff until we have a better idea of how long this is likely to last, etc. That kind of thinking is one of the reasons that I've stuck with them and this is now the longest period I've ever worked for one firm.
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Freshfields have suspended partner payout
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To give a more serious answer, i think it is still too early to tell at this stage.
Once it became clear that that GFC was going to lead to a prolonged slump there were cuts across the board. That included every MC firm, at every level of experience. Profits took a hit in 2009/10 (some more than others) but actually rebounded fairly quickly. The jobs didnt, though.
We will see what happens with the economy, but i think if we come to believe that there will be a long term downturn you will see comparable levels of redundancies. Only question is who will be the first mover. Who will be the "Latham" this time around? Or the DLA (yes, the legal market remembers how you acted. Dont think that we dont.)
I think the difference with the GFC is that it is still perfectly conceivable that there will be a quick rebound, and the proper firms dont want to shed staff unnecessarily.
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Fvck me, this isn't British Leyland, it's not jobs for life.
Never ever instructing a law firm again because 8 years ago they were a bit nasty to people during a downturn? I wonder how you'd deal with real problems. Fact is that its a business and a law firm is no different. It of course is no choice between chopping 5 of Sandra, who works the phones and is a cost centre, versus Erin, who earns 700k a year but holds some of the firms key clients and is projected to bring in 2M of business next year. It's no choice at all.
To be clear, I work in house, am a cost centre and am therefore at risk of being chopped, but this is all in the nature of the game. And the fact is that when the market rebounds, as it will, everyone will find jobs again and the merry dance starts over. To look at this unprecedented situation and take a moral stand over future instruction shows huge immaturity, a narrowness of outlook and epic stupidity
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@Foxbat - agreed; clients don't really care about such things, so long as the Partner they like / lunch with is still at the firm they will continue to push work that way.
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I care.
Not being aunts to your staff is definitely a metric I care about. This is clearly only part of that - but there are generally lots of options of where to get your advice so why employ an organisation if you find their working practices distasteful?
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Foxbat - the choice isnt binary- because law firms work on paying partners profits - so what the law firm could actually do is pay the person earning 700k per year 500k a year instead allowing the spare 200k to pay the wages of people who would otherwise lose their jobs. That is of course the choice of the partners together - and they have to rely on the 700k partner not walking out the door - which they wont if they are not a khnut
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The owners of the firm are the partners they will do what is best for them as a collective first and foremost beyond anything else . Yes they could take a 200k haircut on their profit allocation to save some jobs but they won’t .
these partners as far as I can see have extraordinarily expensive life styles and expenses , not to mention mistresses and the like
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as one of these partners who earns a lot and is regularly asked to make such decisions, I can say that not all firms operate like that. You can of course find plenty of examples of firms that do - but there are plenty that try to have a culture of being in it together - now granted - that means say everyone a hit - which I am more than happy to do if it means that people I have worked with for the last 20 odd years and their families can feed their families
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Proper clients are not as personal to partners as errr those partners would have you believe. And if they are, then the firm has done a shit job of institutionalising them.
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The silver circle firm I used to work for did an excellent job of dropping the department to four days a week but not getting rid of anyone unlike the regional firm I joined after work there who binned people and then cut the pay of the remaining people who hadn't been binned.
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Ok let's test this one..
Partner X is usually on 700. His firm says it'll need to be 200k less. He flounces off to find a new firm.
When he explains why he wants to move does he say ... because they only wanted to pay 500 and I can't accept that? That'll go down well... you wouldnt tighten the belt..
Presumably they will all need to move in concert, and then no-one can benefit from moving.
If he is moving because actually his market position means he was worth more than he was getting full stop then there may be a reason, but nonetheless a firm is likely to think that they are someone who will bail when shit gets hard.
Personally I believe the way out is this:
Y1 - forego the 200k to save the troops
Y2 - beast the troops a little harder to say thanks for keeping me, and give them some of the spoils
Y3 - as per Y2, but you keep the spoils
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Profit share is a relative measure - if he is positively contributing year after year then he could move for money in any event. So presumably his profit share is more or less what he is worth before the crisis. Why would he move to a firm where he has no network, he is not sure the clients will follow, where he will have covenants, where times are tough economically, where he will have no immediate job security for what is in essence a bit of short term pain. He won't.
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What all washed up said, the better managed/run firms have been good in the main at institutionalising relationships see Slaughter and May who have only ever had one partner in its history leave for another law firm.
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Hear, hear
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