June 26 - Jeffrey Goldfarb talks to Reynolds Holding about how cuts in staff and pay at law firm Weil Gotshal & Manges reflect a structural shift in the legal business.
The big layoffs that we've grown accustomed to in the world of banking have now just popped up in the world of law. While goksel a man -- had to had big layoffs. Earlier this week. And got it looks like they may have some kind of first mover advantage the -- you put it why is that. Well I think so and we're not talking chopped liver here I mean this is a big farm what would top top twenty profits topped phony profits per partner. -- -- alliance basically don't like GM Agee and they're laying off like sixty associates limited staff members and has taken hundreds. Thousand dollars from the compensation of maybe 10% of the partners. But the that the bright side this this is obviously it's no good for the flyers but. They're really exhibiting clear eyed view of what's ahead for the league because hundreds assaults today. Even -- there -- visits the GDP numbers right. Spending on on we have certain results go don't wanna pay for lawyers I mean these guys are expensive over a thousand dollars and or. In their fees and big companies have figured out they don't need to pay that and are pressuring for lower fees. They're building their in house legal staffs which is a lot more efficient. They're a lot of options out there to their many firms that are now on line not many but some online there -- services like would seek legal zoom. Disrupted an illegal industry really disrupting and the boom times you know the -- 1008 boom times when demand for lawyers was rising I think 4% a year. They are gone in and this is an indication that wild gets it. And other firms. You know you gotta figure that actually as far as on -- take these deep cuts we've seen in banking where. Brian you know you start chopping and also a market in our guys are now now you have people -- I gotta hire a bunch of people you'll think that's -- battles -- I don't think anyone who really knows what they're talking about -- legal business thinks that's gonna happen I mean this is a structural change. The boom times are coming back. You know the big guys like while -- -- like Wachtel you know sort of premium firms they're always going to be there's always going to be a man for those guys for bet the company litigation. They argue that the repercussions service despite -- going first and be. Staff morale I mean you cut your partner where Kabul with people. There -- -- afterward well I think I mean is the first of all of the cuts are pretty focused -- minutes litigation groups in Boston in Houston. And wireless you know it to New York based firm but most of its business that you can do it. So that -- that people packing up Rihanna is like across the board 10% -- where nobody knows -- you know who's who's the next one out the -- so I think that helps. But also what puts while in the position going for that -- -- really can emphasize work it does well. You can -- you can focus on who it needs to hire. Army doesn't have to sort of believed. Expenses and such on things that aren't really in demand and you think this is not the last -- here forever because of it seems like one of the first time in her and I don't think it's going on a shocking thing is that you know affirm this seems to be this healthy. Is making cuts will you know. People below that level forums below that level are gonna have a lot more trouble. Finding business paying the kinds of money that they -- -- And I think it probably you know it's going to be you're gonna see huge cuts coming forward enough for other victims are well we'll keep an honorable leader there and we will be back with more breaking views tomorrow.