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In the unlikely event you haven't noticed that the economy has been somewhat, well, turbulent recently, a new indicator emerged today: lay-offs at Freshfields.
In the unlikely event you haven't noticed that the economy has been somewhat, well, turbulent recently, a new indicator emerged today: lay-offs at Freshfields (see story).
OK, so lay-offs in this downturn are hardly a new thing. And yes, that's only four lawyers from a firm of 2187 of them. And yes, they're all in real estate.
But the Freshfields redundancies are the first in the magic circle, and a sign that not even that fabled group is immune from the downturn.
Still, it's worse for some than others. While Freshfields is laying off these lawyers after trying and failing to find them new roles overseas or seconded around the firm, Linklaters has scarcely lawyers enough, with some 20 partners dedicated to the Lehman Brothers job, one of the biggest senior legal teams seen on an insolvency this decade (see story).
And while many firms fret, others are making love. Well, they ought to be.
As our UK 200 Annual Report 2008: Silver Circle feature, published online today, contains brand new analysis on all six of the firms, as well as a little matchmaking of potential merger partners. Travers Smith ♥ Latham & Watkins?
Not all bad news
Doesn't Monday seem a long time ago now? Kicking off with the collapse of Lehman, the speed of change among the world's financial institutions has made this week feel as long as the faces on Manhattan's Upper East Side.
But as today's Wall St woes blog post notes, it's not just financial institutions that are feeling the heat.
Lehman's demise, the acquisition of Merrill Lynch and the effective nationalisation of AIG has bestowed several firms lucrative mandates, the latest among them Milbank Tweed, but left others bereft of once lucrative clients.
Among the latter group is Cadwalader Wickersham & Taft, which with Lehman's fall following close behind that of another big client, Bear Stearns, will be keenly considering new sources of work; and Shearman & Sterling, which has just waved goodbye to another big client, Merrill.
Still, there is some good news. Not only is Latham & Watkins surprisingly sanguine about it all, but Lehman's in-house legal team is enjoying a temporary reprieve after an assurance from PricewaterhouseCooper that not only are the lawyers are still in demand, but they'll still get paid this month too (see story).
Oh, and amid all the chaos, Bird & Bird has given an ever so timely boost to its corporate and litigation teams via a merger with 30-partner Lane & Partners (see story). Still, roll on the weekend.
Tales of the unexpected
The world's going mad. Half the City has nothing to do while the rest is scrambling to advise Lehman's swaps counterparties.
And amongst all the brouhaha over HBOS, AIG and Lehman, there are a couple of other astonishing stories which might have escaped your attention.
Here's one. Shearman & Sterling, fresh from helping prized client Merrill Lynch walk into the arms of Bank of America, just lost its Munich office head and another partner to A&O (see story)
Now, we reckon that makes 16 partner departures in Germany in the last year alone. That's not looking too rosy.
Meanwhile, over at Heller, the collapse of merger talks with Mayer Brown has seen 15 more partners leave in the last couple of days alone (see story). We keep losing count of partner departures from Heller this year, but we make it around 40, at least.
Comparisons with the banking market? Well, neither Shearman nor Heller has had to write down billions on dodgy derivatives trades, and both are on a perfectly sound financial footing.
But you can still draw one parallel with what is going on in Wall Street. It's all about confidence, or more precisely, the lack of it.
Shearman's Germans seem to have lost it, hence A&O's opportunistic raid. And it's also in short supply at Heller, too.
Lehman lawyers: safe for now?
The sight of Lehman Brothers staff walking out of Canary Wharf with cardboard boxes full of possessions has been one of the defining images of the credit crunch.
But it is unlikely many of the stricken bank's legal team were among them. They were still in the office, working on the final trades of the previous week.
In fact, Lehman's lawyers are likely to be some of its busiest staff over the coming weeks. Administrators from PriceWaterhouseCoopers have already moved in and have begun asking for documents and reports.
Despite this, the axe is hovering ominously over all 100 or so members of the Lehman in-house legal team (see story).
The problem is that PWC has not offered them new jobs and their current employer, Lehman, will soon cease to exist.
As one legal recruiter commented: "They are stuck in limbo. They don't know if they are going to get paid or not this week."
Little wonder then that recruitment firms have seen Lehman CVs arriving in droves. And with lawyers from Merrill Lynch adding to the pile, now would seem like a good time for City firms to bolster their banking practices with a few opportunistic hires.
Lehman Bros: "Seminal days"
Oh, the ups and downs of finance lawyers. Three months ago Linklaters’ banking group was filled with gloom after JPMorgan dumped it from every mandate you’ve ever heard of (revealed by The Lawyer, 23 June).
But this afternoon the group are the kings of the City, having captured the mandate to advise on the UK end of the administration of Lehman (see story).
On the US side – yes, you guessed it – bankruptcy mavens Weil Gotshal are involved on the Chapter 11 filing.
The fall of Lehman Brothers comes just six months after the bank extended its UK panel to include Simmons & Simmons. Other panel firms watching this closely include A&O, Lovells, Ashurst, Freshfields, Linklaters and Weil.
One partner at a City firm said: "These are uncertain times we're living in - I think you get certain seminal days in your career, like 9/11 or the Big Bang. Today in shock terms is huge, seeing a bank like Lehman go under."
You can find more about this on TheLawyer.com, where The Lawyer’s integrated London and New York teams will be bringing you all the latest news from Wall Street and what it means for the top US and UK law firms.
In the meantime, here’s our special cut-out-and-keep guide to the current players on the scene.
- Bank of America: Wachtell Lipton Rosen & Katz
- The Bank of England: Freshfields Bruckhaus Deringer
- The Financial Services Authority: Lovells
- Merrill Lynch: Shearman & Sterling
- PricewaterhouseCoopers (PwC): Linklaters; Weil Gotshal & Manges.