NEW YORK TIMES: [T]he corridors of White & Case are quiet, the happy buzz of business having gradually been replaced by a melancholy pall of diminished billable hours. Many office doors are shut — not because of meetings, but, as one associate put it, so that “the man with the ax” cannot find the occupants. Type-A partners, once glued to their BlackBerrys, suddenly have time for their spouses and their children; ladder-climbing junior lawyers linger over lunch.
As the apocalypse on Wall Street ripples out into the larger economy, a thick red tide is lapping at the once-impregnable foundations of New York’s corporate law firms, threatening to turn the industry — and with it, some iconic city characters — into an endangered species. In the first quarter of 2009, demand for legal services in New York decreased by nearly 10 percent over 2008, according to the Hildebrandt International Peer Monitor Index. At least 10,000 employees at major firms across the country have lost their jobs so far this year, according to the macabre but wildly popular “Layoff Tracker” run by another blog, lawshucks.com.
At the root of the law-firm crisis, legal experts say, is the credit crisis, which has pulverized the need for traditional practice areas like structured finance, mergers and acquisitions and private-equity transactions — the very things that have always kept a high gleam of polish on the city’s whitest shoes. The downward trend has been unrelenting: fewer Wall Street deals mean fewer Wall Street lawyers. While the legal industry is hardly battling the existential threat that is facing, say, the newspaper trade, Big Law — especially in competitive New York — is facing a potential paradigm shift as fundamental as the one that has hit investment banks and the auto industry. Big, as a business model (let alone as an expression of the national mood), seems bound for obsolescence. MORE
RELATED: To cope with an ongoing decline in business and rising costs, Ballard, Spahr, Andrews & Ingersoll L.L.P. is cutting compensation for its more junior lawyers. The move follows cuts of nearly 170 support staff positions in the last year and a half, made up of layoffs, attrition and the elimination of unfilled positions. The firm declined to comment today on the salary cuts, saying that as a matter of policy it would not discuss compensation of its lawyers. But legal-community observers said the firm’s 238 associates had been informed their pay would be reduced. In cutting associates’ salaries, Ballard joins a growing list of firms in Philadelphia and around the country seeking to trim compensation for lawyers below the partnership rank. Many have delayed start dates for first-year lawyers. Others, including Reed Smith L.L.P., a huge Pittsburgh-based firm with a large office in Philadelphia, have said that they, too, were cutting the salaries of associates. MORE