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Tuesday, June 25, 2013

Weil, Gotshal & Manges Lays Off 60 Associates, 110 Staff

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Not a surprise. Having worked in an AMLAW 50 firm, I can tell you that there are dozens if not hundreds of attorneys with no real work at these firms. They've been hanging on because partners have been able to bill them out for extensive document review, but those days are gone.

The contraction of biglaw hiring is a nightmare for law schools. I cannot overstate this fact. The top 50 firms alone used to absorb a few thousand law grads every year. Now, all but the most elite schools will only sprinkle a dozen or so students into these jobs (and I'm including schools like UCLA, USC & GW in the non-elite category). The median private practice law firm salary will drop to $60,000 at these schools.* Even prospective students with a bad case of special snowflake syndrome will know better than to make the mistake of enrolling. That will be the death knell!

FN1. I'm sure schools will do their best to continue to publish a $160,000 median private practice salary. They used to use the median of all grads in the private sector, but then changed the category to private practice law firm so as not to include all of the grads working at Starbucks and Applebees. Now, I've noticed that they just do the median of the grads in private law firms who have sent in salary information. They don't bother to estimate salaries for all those grads in 2-10 attorney law firms.

Posted by: JM | Jun 25, 2013 6:54:11 AM

Once the comp of big firm lawyers gets cut, it's only a matter of time until that trickles down the law business spectrum. This is reminiscent of the medical profession. Doctors today earn a fraction of their former comp as their incomes were not sustainable as the cost for necessary services when dollars got scarce. In my youth, doctors were the hedge fund managers of today. The restructuring of the legal profession to bring cost in line with value is and has been predictable. Why should the amount of a legal fee depend on the rent or comp structure of one firm over another? There will always be rock stars who demand and get out-sized fees, but the other 99% will have to deal with the legal profession's version of the "usual and customary" charge concept that changed the medical profession. Scarce dollars force meaningful change. The law school crisis is a symptom of the bigger problem in which cost and value are not in line. Like doctors, lawyers will always live well but the days of excess are over. Unfortunately, most lawyers and law profs, like most doctors, will just complain ad nauseum about who moved their cheese instead of getting ahead of the trend and making the best of it.

Posted by: JayGo | Jun 25, 2013 7:18:40 AM