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CV19 Lawyer Compensation/Layoffs

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I know of one downtown Toronto litigation firm that has laid off its support staff and 20% of its associates. 

I'm seeing a general trend among litigation friends of significantly reduced billables, as an obvious consequence of the courts being effectively closed.  For every motion or trial or discovery cancelled, a huge chunk of billable work evaporates.

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20 hours ago, kindersuprise said:

Is it just me or did BLG and Gowling take down their Toronto nalp pages? Also did McCarthy TO take down their salary? 

BLG Toronto's NALP page has been down for months.

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Posted (edited)
On 4/12/2020 at 2:34 PM, hitman9172 said:

 

I take it to be that some large firms seem reluctant to slash associates' salaries out of some sense of 1) loyalty/pity ("associates work hard and they can't bear the financial burden as much as partners can"), 2) optimism ("this will blow over soon and we don't want to be understaffed on revenue-generating associates when the recovery is in full swing), and 3) prestige ("we don't want to cut salaries before our competitors or else it looks like we're a second-tier firm").

I think #2 & 3 are the driving factors at the large firms in Toronto that have not announced cuts yet. Whether we think the rankings are a true reflection of the calibre of the firms or not (IMHO, there are idiots and geniuses everywhere), some firms do place a lot of importance on the reputation they have in the industry. In the same way that the firms match the associate salary bumps once enough "similar" firms announce bumps, I think the same will be true for salary cuts. Some practice groups and firms will be hit harder than others, just based on who their clients are. If your firm has a lot of hospitality and retail clients, your firm may not be expecting their bills to be paid on a timely manner, even if the average number of billable hours worked do not change. If your firm has a strong bankruptcy or employment practice,  they would likely be more optimistic about their cash flow.

Edited by purplelego
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7 hours ago, joeyman365 said:

The mid-sized (regionally ranked) firm I work at cut associates salaries by 15% and staff by 10%. More than a dozen staff were laid off. Depending on whether billables stay up, and probably because currently we're busier than pre-COVID, the difference in salary may be returned as backpay (although I am not counting on it). 

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On 4/14/2020 at 10:34 PM, adVenture said:

The mid-sized (regionally ranked) firm I work at cut associates salaries by 15% and staff by 10%. More than a dozen staff were laid off. Depending on whether billables stay up, and probably because currently we're busier than pre-COVID, the difference in salary may be returned as backpay (although I am not counting on it). 

I heard similar things from my friend. They work at a ~40 lawyer firm in Alberta that slashed all salaries and partner takes by 30%. 

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13 minutes ago, BringBackCrunchBerries said:

I heard similar things from my friend. They work at a ~40 lawyer firm in Alberta that slashed all salaries and partner takes by 30%. 

30% off associate salaries? fuuuu

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3 minutes ago, QuincyWagstaff said:

30% off associate salaries? fuuuu

Yeah man. They are happy to still have a job and with the spoken intent to do retro-pay if possible, but I think that is the biggest cut I have seen. I guess the partners taking the same dip helps swallow it?

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Posted (edited)
15 hours ago, BringBackCrunchBerries said:

Yeah man. They are happy to still have a job and with the spoken intent to do retro-pay if possible, but I think that is the biggest cut I have seen. I guess the partners taking the same dip helps swallow it?

At this point all of the associates I know who are taking pay cuts are just happy they still have a job, even if its to do more work for lower pay. The market is not very good and being laid off to do nothing doesn't make paying rent or a mortgage any easier. I know of 50% salary cuts and lay offs for smaller firms, so 15-30% is at least reasonable enough for most people -- as far as I know -- to still be able to live pay cheque to pay cheque without going into debt. 

Edit: Further* debt

Edited by adVenture

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17 hours ago, BringBackCrunchBerries said:

Yeah man. They are happy to still have a job and with the spoken intent to do retro-pay if possible, but I think that is the biggest cut I have seen. I guess the partners taking the same dip helps swallow it?

Alberta is in a world of hurt. I really don't see our economy rebounding at the same rate as the rest of Canada once the restrictions are lifted. I expect we'll see a lot of migration to other jurisdictions. 

Edmonton is expecting 50% of small businesses to permanently close because of the quarantine (note: this was from a survey, so it's likely lower). These businesses are the foundation for most small and mid-size firms, so it will be difficult to get things back to "normal" here. And even the large businesses (...oil) are hurting. Crude Oil WTI is trading at $18 this morning! Western Canadian Select up, but still has ways to go before it's really profitable to take it out of the ground. 

I expect most Albertans would gladly take a pay cut vs a layoff. 

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Posted (edited)
22 minutes ago, setto said:

Alberta is in a world of hurt. I really don't see our economy rebounding at the same rate as the rest of Canada once the restrictions are lifted. I expect we'll see a lot of migration to other jurisdictions. 

So glad I didn't go to U of C/U of A for law school even though I was strongly considering staying in Alberta at the time. I love Alberta, but recent events (and I am not only referring to COVID) have really just highlighted to me that it may be better to start a legal career in Ontario post-COVID. 

Edited by Twenty

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7 minutes ago, Twenty said:

So glad I didn't go to U of C/U of A for law school even though I was strongly considering staying in Alberta at the time. I love Alberta, but recent events (and I am not only referring to COVID) have really just highlighted to me that it may be better to start a legal career in Ontario post-COVID. 

Please note: I'm a lawyer and not an economist or a quant trading oil futures. and I'm shooting the shit on a message board. I'm basing a lot of what I say on discussions with other lawyers (who know just as little as I do) and by looking at market forecasts.

I could be wrong and Alberta will experience a pivot and find some new backbone to the economy, but we are pushing oil like crazy and for some reason doubling-down on it. Unless we come up with some sort of Nnorth American protectionist agreement, we're in trouble! 

It's gotta be that other provinces' economies will fare better because they at least have a modicum of diversity...

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58 minutes ago, setto said:

Alberta is in a world of hurt. I really don't see our economy rebounding at the same rate as the rest of Canada once the restrictions are lifted. I expect we'll see a lot of migration to other jurisdictions. 

Edmonton is expecting 50% of small businesses to permanently close because of the quarantine (note: this was from a survey, so it's likely lower). These businesses are the foundation for most small and mid-size firms, so it will be difficult to get things back to "normal" here. And even the large businesses (...oil) are hurting. Crude Oil WTI is trading at $18 this morning! Western Canadian Select up, but still has ways to go before it's really profitable to take it out of the ground. 

I expect most Albertans would gladly take a pay cut vs a layoff. 

I've seen some of the effects of this in Calgary already. It's pretty dispiriting. I know a number of articling students at small firms who lost their hire-back positions as a result of the downturn, or are getting hired back temporarily on their articling salaries. A small civil lit firm I'm aware of turfed all of its lawyers and support staff (I think between 12-14 people total). In speaking with several partners at several other small firms, major concerns about solvency were repeatedly expressed. I have little difficulty envisioning a significant outflow of new calls and junior lawyers when, by all appearances, most small firms here are entering survival mode.

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Posted (edited)
1 hour ago, setto said:

Please note: I'm a lawyer and not an economist or a quant trading oil futures. and I'm shooting the shit on a message board. I'm basing a lot of what I say on discussions with other lawyers (who know just as little as I do) and by looking at market forecasts.

I could be wrong and Alberta will experience a pivot and find some new backbone to the economy, but we are pushing oil like crazy and for some reason doubling-down on it. Unless we come up with some sort of Nnorth American protectionist agreement, we're in trouble! 

It's gotta be that other provinces' economies will fare better because they at least have a modicum of diversity...

Fair point. But even then, economics and quantitative forecasting can only go so far and at some point, people make decisions based on intuition. 

Intuitively, I know I wouldn't want to work in a province where it seems like there is such lackluster support for diversification. I don't think it takes an economist to elaborate on the cons associated with an O&G-dependent economy and I share the same concern with Alberta doubling-down on oil. I know there are Albertans who want to diversify, but I think last election speaks volumes about where Albertans really put their economic hopes on. 

In addition, I feel like Albertans run mental gymnastics justifying their strong support for oil sands. I acknowledge that the following example is somewhat of a straw man because you can always find extreme examples in any province, but I personally hate the whole "ethical oil" line that gets played in industry.🙄 

 But this is getting political and I don't want to overgeneralize, so I'll just end it on that note...

17 minutes ago, rziegler said:

I've seen some of the effects of this in Calgary already. It's pretty dispiriting. I know a number of articling students at small firms who lost their hire-back positions as a result of the downturn, or are getting hired back temporarily on their articling salaries. A small civil lit firm I'm aware of turfed all of its lawyers and support staff (I think between 12-14 people total). In speaking with several partners at several other small firms, major concerns about solvency were repeatedly expressed. I have little difficulty envisioning a significant outflow of new calls and junior lawyers when, by all appearances, most small firms here are entering survival mode.

I am curious about the effects on the bigger firms. Even prior to the shutdowns, I spoke with an Albertan partner at one of the more prominent nationals and they said that business was not doing well. They implied that I should stay in Ontario if I have the chance, but they did preface that they weren't an economist oddly enough. 

Edited by Twenty

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13 minutes ago, Twenty said:

Fair point. But even then, economics and quantitative forecasting can only go so far and at some point, people make decisions based on intuition. 

Intuitively, I know I wouldn't want to work in a province where it seems like there is such lackluster support for diversification. I don't think it takes an economist to elaborate on the cons associated with an O&G-dependent economy and I share the same concern with Alberta doubling-down on oil. I know there are Albertans who want to diversify, but I think last election speaks volumes about where Albertans really put their economic hopes on. 

In addition, I feel like Albertans run mental gymnastics justifying their strong support for oil sands. I acknowledge that the following example is somewhat of a straw man because you can always find extreme examples in any province, but I personally hate the whole "ethical oil" line that gets played in industry.🙄 

 But this is getting political and I don't want to overgeneralize, so I'll just end it on that note...

I am curious about the effects on the bigger firms. Even prior to the shutdowns, I spoke with an Albertan partner at one of the more prominent nationals and they said that business was not doing well. They implied that I should stay in Ontario if I have the chance, but they did preface that they weren't an economist oddly enough. 

I'm with a larger shop and we seem to be doing Ok in terms of layoffs and pay cuts - But who knows how long that will last for? So much is unknown and I can't imagine we're not hurting. 

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31 minutes ago, rziegler said:

I've seen some of the effects of this in Calgary already. It's pretty dispiriting. I know a number of articling students at small firms who lost their hire-back positions as a result of the downturn, or are getting hired back temporarily on their articling salaries. A small civil lit firm I'm aware of turfed all of its lawyers and support staff (I think between 12-14 people total). In speaking with several partners at several other small firms, major concerns about solvency were repeatedly expressed. I have little difficulty envisioning a significant outflow of new calls and junior lawyers when, by all appearances, most small firms here are entering survival mode.

If a law firm fires all of its lawyers, is it still a law firm? 

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1 minute ago, BringBackCrunchBerries said:

If a law firm fires all of its lawyers, is it still a law firm? 

pondering raptor picture

Maybe they have / will move to contractors? 

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2 hours ago, QuincyWagstaff said:

The prairies are not really fit for human habitation in any event, IMO. 

Excuse me sir, but Alberta ain't no Saskatchewan 

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18 minutes ago, Twenty said:

Excuse me sir, but Alberta ain't no Saskatchewan 

It's all the same to us. I have only ever heard those poor (or ignorant) souls subsisting in Alberta draw any distinction. 

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