The dramatic drop in legal jobs last month is an indicator that recession is more than just looming.
The US Bureau of Labor Data Statistics monthly employment report paints a bleak picture reporting the first significant year on employment rate drop in a decade (see story).
Record layoffs and firm dissolutions have contributed significantly to the 1.25 per cent October plummet.
On the face of it the 1.25 per cent reduction is minimal compared to other sectors such as say, manufacturing, which suffered a 3.7 per cent fall.
But the reality is that the data shows that litigation and restructuring is still compensating for the painful loss of transactional work.
As a result, US firms in growing numbers have been forced to cut costs and staff numbers.
Sadly, life is unlikely to be about to get much better.
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
– 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…
– 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…