Law firms shrinking? Awww...

Rico says he weeps crocodile tears for the poor bastards in Alan Feuer's article in The New York Times:

After months of anxious planning, it was time for Hugh Verrier to finally press send. In his two years as chairman of White & Case, the venerable Wall Street law firm, Mr. Verrier had already laid off seventy young lawyers and shuttered offices in Bangkok, Dresden, and Milan. He had watched top partners flee to competitors, and suffered a depressive 2008 holiday party at Cipriani’s, which had half the budget of the prior year’s $500,000 event— a Neroesque fete at the United Nations with fireworks and a band.
Now Mr. Verrier, who had worked exclusively at the century-old firm since leaving Harvard Law School in 1982, sat in his office high above 44th Street and Avenue of the Americas, considering the e-mail message he was about to send. It announced that 200 more lawyers would lose their jobs, nearly one in ten at the firm over all— and not just young associates with everything in front of them, but some million-dollar-a-year ones like himself, the ones with twin mortgages, kids in private school, and no Plan B. “I greatly regret having to take these actions,” Mr. Verrier wrote, making a nod to the “deterioration of the global economy” and the need to slash expenses in recessionary times. Then he dropped the bomb: “a reduction in the number of our partners commensurate with current and anticipated needs.”
The reaction was swift and frantic. Partners who were staying scurried to protect their favorite workers; résumés were burnished and beamed out to recruiters. As the victims were informed at private meetings with supervisors, a group of young lawyers downed tequila at a nearby tavern and morbidly scratched a “whack list” on a legal pad, with guesses as to who was getting the ax.
Within nine hours of that 9 March message, 231 comments— several, it appeared, from within the firm itself— were posted on the popular lawyers’ blog abovethelaw.com. They ranged from the apocalyptic (Armageddon!!!) to the ghoulish (Is anyone handing out towels for this bloodbath?), to the disturbed (Ahhhhh!).
Months later, the corridors of White & Case are quiet, the happy buzz of business having gradually been replaced by a melancholy pall of diminished billable hours.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.
“People are shellshocked,” said one top partner at the firm who, like many of its current and former lawyers, spoke on condition of anonymity for fear of retribution. “If they survived the first two rounds, they’re happy to have a job, but are still very nervous. And if their phones don’t ring, if their work doesn’t come back with a vengeance, they fear they aren’t long for this world.”
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.
A few top firms, like Thatcher, Proffitt & Wood, established before the Civil War broke out, have already gone under in the flood; the carnage of layoffs has touched even sterling names like Proskauer Rose, Dewey & LeBoeuf, and Clifford Chance.
In the first quarter of 2009, demand for legal services in New York decreased by nearly ten 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.
The Hildebrandt index found, for example, that at the nation’s twenty top-grossing law firms— twelve of which are in New York— average profit per partner and revenue per lawyer both dropped in the first quarter of 2009, for the first time since 1991. At White & Case, the average profit per partner last year was $1.6 million, down from $1.7 million the previous year, according to AmLawDaily, the website of The American Lawyer.

Rico says there is, of course, a lot more; click the post title to read it.