Mass Layoffs at BigLaw As "Recovery" Fails To Revive Financial Transactions Work

Sixty junior lawyers, known at firms as associates, lost their jobs. That amounts to roughly 7 percent of Weil's associates. Annual compensation will be reduced for roughly 30 of the firm's 300 partners, in many cases by hundreds of thousands of dollars. And 110 non-lawyers -- roughly half of them secretaries -- were let go.

...

At Weil, whose partners make, on average, about $2.2 million a year, the situation is unique. During the depths of the downturn, the firm avoided the layoffs that some other firms were forced to make. That was largely because of the firm's pre-eminent bankruptcy practice, which advised both General Motors and Lehman on their Chapter 11 filings. Those assignments, particularly Lehman, generated hundreds of millions of dollars in fees, not only in bankruptcy work, but also from the reams of litigation that flowed from them.

In an interview last week, Mr. Wolf said that Weil's leaders thought that as the crisis-related assignments wound down and the economy recovered, the firm would see a pickup in its "transactional business," the lucrative work of advising corporations and private equity firms on acquisitions, as well as performing legal work for stock and bond offerings. But transactional activity at Weil remains soft and has not returned to anywhere near pre-2008 levels.

Nevertheless, the firm has performed well relative to its peers, according to data compiled by Bloomberg and Thomson Reuters. In 2012, Weil was ranked No. 1 in private equity representations globally. It ranked No. 2 in domestic mergers and acquisitions last year and has maintained that position in 2013, advising on deals like the American Airlines merger with US Airways. Still, Mr. Wolf said, there was not enough work to keep Weil's army of lawyers sufficiently busy.