Wall Street Woes: Hiring and firing

The credit crunch rollercoaster keeps on chugging along. Yesterday Orrick launched a round of 40 lay-offs, just weeks after taking a large chunk of the now defunct firm Heller Ehrman.

&idThe credit crunch rollercoaster keeps on chugging along. Yesterday Orrick launched a round of 40 lay-offs, just weeks after taking a large chunk of the now defunct firm Heller Ehrman.

As Orrick chairman Ralph Baxter puts it, the hires show that the firm is “ready to invest in areas that are dominant and we are committed to maintaining a successful global presence”.

The redundancies also show the firm is ready to cut where required.

At first glance it seems strange that Orrick has announced firm-wide layoffs a little over a month after snapping up a 27-partner team from dissolved firm Heller (see story).

But although distressing for the 40 associates given the chop today, Orrick’s, chairman sees the move as prudent when international transactional work is in such a trough.

“The partners we hired from Heller are in a completely different practice area,” argues Baxter. “Apart from three partners with a focus on technology in corporate, the rest are in litigation.

“We were very careful not to hire associates in groups where we had incumbent Orrick associates. The associates hired were in areas that we needed to build up.”

Bulking up in litigation is a good decision at a time like this but little comfort for those in real estate, corporate and structured finance that are now desperately looking for new jobs.

“It is extremely regrettable,” admits Baxter. “Throughout the year we redeployed lawyers and did everything in our power to look after our employees. When we realised the markets were not going to turn around we had to think again.”

Layoffs never look good, but Baxter remains as confident and proud of the firm as ever.

“We still have strong market share,” maintains Baxter. “The difference is the market has shrunk and there is not as much demand as in previous years.”

It looks like the rollercoaster still has a lot of track to run.


Latest credit crisis news

31 Oct-2008 Magic circle, Latham advise in £7.3bn Barclays injection
28 Oct-2008 Thelen Reid to dissolve by December
28 Oct-2008 Chadbourne hiring freeze as recession bites
14-Oct-2008 Davis Polk advises UK Government on banking bailout
13-Oct-2008 Paulson chooses Simpson Thacher to mastermind US bank bailout
13-Oct-2008 Federal reserve leaves Wachovia deal in stasis
13-Oct-2008 Wachtell and SullCrom step up for Morgan Stanley
09-Oct-2008 Sullivan, Davis Polk win roles on $37.8bn AIG deal
09-Oct-2008 UK firms line up for Icelandic bank roles
08-Oct-2008 City firms win roles on Government’s bank bailout
08-Oct-2008 Citi and Wells Fargo battle for Wachovia
08-Oct-2008 UK firms line up for Icelandic bank roles
07-Oct-2008 City firms move to safeguard client accounts
29-Sep-2008 Freshfields partner to head Bank of England legal team
29-Sep-2008 Firms set up financial crisis response groups
29-Sep-2008 Stibbe lands Fortis govenment role
29-Sep-2008 Davis Polk, Skadden, Sullivan in Citi’s Wachovia buy
29-Sep-2008 City trio bag roles on Bradford & Bingley rescue
26-Sep-2008 Sullivan’s Cohen grabs role on WaMu’s demise
26-Sep-2008 Freshfields joins Nomura deal
25-Sep-2008 Linklaters expands PwC team stateside
25-Sep-2008 Linklaters, Cleary Gottlieb get fourth Wall St mandates
24-Sep-2008 Sullivan and Munger Tolles step up for Buffett Goldman deal
24-Sep-2008 Simmons scores first Lehman hedge fund claim
23-Sep-2008 Cleary, Ropes & Gray on latest Lehman sale
23-Sep-2008 Ashurst advises CarVal on Lehman’s £100m salary lifeline
23-Sep-2008 Skadden Arps gets Nomura mandate in Lehman Asia buyout

Previous Wall St woes

11-Nov-2008 Labor data
The dramatic drop in legal jobs last month is an indicator that recession is more than just looming.

29-Oct-2008 Thelen Reid – culture kills
The only item on the agenda at Thelen Reid Brown Raysman & Steiner’s partners meeting yesterday was described by an inside source as “a formality”: dissolution.

21-Oct-2008 Charlotte Web
Fifteen months ago Charlotte, North Carolina was the hot spot for US firms hoping to thrive in structured finance. Times have changed.

17-Oct-2008 Banking it
A good chunk of New York’s elite firm shied away from the US Treasury bailout mandate because of conflicts. The likes of Sullivan & Cromwell, Davis Polk & Wardwell and Wachtell Lipton Rosen & Katz simply have too many conflicting mandates on the multitude of meltdown instructions…

15-Oct-2008 Leaving Litigation
News that Clifford Chance is to lay of a fifth of its US litigation workforce was met with amazement by the Stateside legal community. Hardly surprising given that the firm has shed a total of 20 litigation associates at a time when litigation is expected to grow.

14-Oct-2008 Dodging Rodgin
Careful conflict checking is more relevant than ever on Wall Street. But finding a law firm equipped and able to advise the US government on its $700bn bailout can’t have been an easy task for Treasury Secretary Hank Paulson and his gang.

13-Oct-2008 Mail prowess
Over lunch yesterday at Bingham McCutchen’s midtown Manhattan office, the firm’s co-head of its financial restructuring group seemed proud – to say the least – of his firm’s efforts during the current meltdown.

09-Oct-2008 Watching Wachovia
It was literally a last-minute intervention. At 11.59am yesterday, the Federal Reserve extended its standstill on Citigroup’s lawsuit over Wells Fargo’s bid for US bank Wachovia.

01-Oct-2008 Shock and awe
There was still hope on Wall St yesterday that the US government’s $700bn financial sector bailout would eventually make it through the House of Representatives. The expectation is that a revised plan will be adopted, one way or another.

30-Sep-2008: Byrne in the USA
And then there were more. The Linklaters team advising PricewaterhouseCoopers on Lehman Brothers’ bankruptcy just keeps on growing. As revealed last week, the firm has already put a mega 20-partner, 60-associate team on the matter in London. Now the magic circle firm is pulling out the stops on this side of the Atlantic…

25-Sep-2008: Foul-weather friends
Sullivan Cromwell chairman Rodgin Cohen has deservedly garnered headline after headline in recent weeks. With almost four decades of experience, Cohen has won roles on deals that have kept him – and his firm – firmly at the centre of dealing with the US financial turbulence….

19-Sep-2008: The Queen’s City
There may be a financial crisis on Wall St, but there are new opportunities aplenty in North Carolina. In Charlotte, America’s second biggest financial centre and the home of both Bank of America and Wachovia, a whole bunch of firms are unnervingly upbeat while Wall Street collapses….

18-Sep-2008: The heat and the cool
It isn’t just financial institutions that are feeling the heat on Wall Street this week. The collapse of Lehman, the acquisition of Merrill Lynch and the effective nationalisation of AIG has left dozens of lawyers facing life without their once lucrative client relationships…

17-Sep-2008: A&O emerges
Day three of the Wall Street crisis, and the major legal players are emerging. As my colleague Julia Berris in New York noted yesterday, Wachtell and Weil Gotshal have snagged some of the biggest roles on the US end…

16-Sep-2008: Weil at heart
In a week of uncertainty, the only sure thing was that Weil Gotshal & Manges bankruptcy star Harvey Miller would get a call from longstanding client Lehman Brothers…

15-Sep-2008: The Lehman fallout
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…