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CV19 Lawyer Compensation/Layoffs

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I really don't know!  If a couple of firms are cutting hiring, are some of the next-tier firms ready to eat their lunch and scale up?  I'm hearing as well that some smaller and specialized firms are among those bootin' butts and taking names at the moment.

It's a good thing at least in being able to distinguish between practices.  Normally it would be tough to decide between essentially identical firms; but come 2022 it could well be that my firm will let you live in a mansion in Nova Scotia and commute in one week a month, whereas Morgans will still require you to be in the office every day, night and twice on Sundays.  That could be a real differentiator for those that either really want that freedom or really wouldn't perform well with it.

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1 hour ago, Uriel said:

Very concerning rumours flying around from well-connected sources about a few Bay Street firms in serious difficulty.  Worried about some good friends across the street that have been killing themselves to get ahead in places with an uncertain future.  You think all these firms are generally the same, and then something like this happens and there's a huge spectrum from the sky falling to firms doing so well they want to incorporate work-from-home on a permanent basis.  

Bay Street is going to look very different on the other side of this.  The same kind of tiers might still be there, but all you applicants are going to have much more variety in your choices.  Some firms are going to come out stodgy and unfazed; others are going to completely roll over into coffee-shop drop-in bistros; some might be slashed to near-irrelevance or merge (I can think of two clear candidates)... what a time to be alive.

Are you at liberty to share firm names, or is this perhaps something you can divulge in the future when more information is received? I'm sure this would be immensely helpful to students and Associates pursuing these firms. 

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Even though well-placed, they're still just rumours; I don't want to be out here getting on the wrong side of some good old-fashioned trade libel.

Since a lot of you weren't here 12 years ago, just a quick reminder that just because a firm is having a hard time doesn't mean the students are in trouble.  In the last couple of recessions, we saw some emergency mergers that actually caused students to be "upgraded" into better firms... international buyouts that catapulted some "mid-tier" and regional firms into international juggernaut status... we saw some lower-billing senior associates and overpaid senior partners move from firm to firm... and generally when financial difficulties hit law firms the result was lower hiring at the OCI stage and not necessarily lower hireback.  For many firms, mine included, cutting on hireback or new hires is more of a last resort.

If you've just got a job at a Bay Street law firm, you should be the opposite of panicking, even if your firm happens to be one of (what are hopefully a very few) that are going to have to make some changes.  As I say, I'm worried about my friends on the brink of partnership; you jerks are probably going to be fine.  :)

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RIP my inbox.

I guess some more historical context might be useful to those of you who don't remember what it was like in 2008 because you were literally children.*

When Goodman & Carr folded, and Heenan Blaikie after it (I guess in context those were kind of comparable to... McMillan and Norton Rose today?  Ish?), a lot of their talent was poached by other law firms and basically all of their articling students were taken on by other Bay Street firms.  Kind of an unspoken obligation.

Again, far from saying that anything like that is going to happen -- it almost certainly won't, probably not even close -- but because we have some catastrophic thinkers out there, just remember that your absolute, meteor-strike worst-case scenario might be that if the firm folds you'll end up at Torys.  Ugh.

(Kidding, I'm kidding.  Don't @ me.)

 

* I don't know if I shared this here, but we were at a firm event just before Covid and there was a trivia question about '90s music.  They played Bittersweet Symphony and the question was, "which band played that song?"  We answered, The Verve.  The new associates were like, "we didn't know that".  And the olds were like, "no worries, you were probably thinking The Verve Pipe, but that's a different band.  In any event, one-hit wonder, can't blame you if you don't remember."  

And they were like, "No, we've never heard that song."

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4 minutes ago, Uriel said:

RIP my inbox.

LOL. When I saw your initial post, my first thought was how badly your inbox was about to get flooded.

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7 hours ago, Uriel said:

Since a lot of you weren't here 12 years ago, just a quick reminder that just because a firm is having a hard time doesn't mean the students are in trouble.  In the last couple of recessions, we saw some emergency mergers that actually caused students to be "upgraded" into better firms... international buyouts that catapulted some "mid-tier" and regional firms into international juggernaut status... we saw some lower-billing senior associates and overpaid senior partners move from firm to firm... and generally when financial difficulties hit law firms the result was lower hiring at the OCI stage and not necessarily lower hireback.  For many firms, mine included, cutting on hireback or new hires is more of a last resort.

Incoming 2Ls: (chuckles) I'm in danger. 

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46 minutes ago, Twenty said:

Incoming 2Ls: (chuckles) I'm in danger. 

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My firm reinstated salaries a few weeks back. My partner's firm is a comparable firm to mine and so far, there's been no news regarding when their salaries will be reinstated. Cuts have been ongoing since the start of the pandemic. The catch is this -- my partner's firm has brought on new hires while continuing to cut the salaries of existing staff and associates.

When I was advised their firm was hiring under a pay cut, I thought this was an immediate red flag: surely if the firm isn't generating enough revenue to pay existing folks their full wages, I can't imagine how they have funds to bring new support staff and associates onboard, unless the salary cuts from existing staff and associates are now being used to fund the salaries of new people. That whole situation strikes me as pretty exploitative. Is this happening commonly elsewhere, or is this a genuine red flag?

 

Edited by BuzzBuzz
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18 minutes ago, BuzzBuzz said:

My firm reinstated salaries a few weeks back. My partner's firm is a comparable firm to mine and so far, there's been no news regarding when their salaries will be reinstated. Cuts have been ongoing since the start of the pandemic. The catch is this -- my partner's firm has brought on new hires while continuing to cut the salaries of existing staff and associates.

When I was advised their firm was hiring under a pay cut, I thought this was an immediate red flag: surely if the firm isn't generating enough revenue to pay existing folks their full wages, I can't imagine how they have funds to bring new support staff and associates onboard, unless the salary cuts from existing staff and associates are now being used to fund the salaries of new people. That whole situation strikes me as pretty exploitative. Is this happening commonly elsewhere, or is this a genuine red flag?

I know of one firm that had reduced the pay of staff when the crisis hit and has yet to restore it to what it used to be. They've since brought in this year's crop of articling students at the usual pre-covid pay rate.

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1 hour ago, msk2012 said:

I know of one firm that had reduced the pay of staff when the crisis hit and has yet to restore it to what it used to be. They've since brought in this year's crop of articling students at the usual pre-covid pay rate.

Super interesting. Something similar is happening at my partner's firm.

They've hired back at least some if not all students who are finishing up articles, have brought in this year's crop of students, taken on some lateral hires and some admin staff. All of this with no news regarding when the existing cuts will be ending. Not sure if the people starting articles, lateral hires or admin staff are subject to the pre-covid rate or reduced rate but it would be interesting to find that out. Even if at the reduced rate, I have a hard time seeing how this degree of hiring during a pay cut is justifiable.

@BlockedQuebecois I thought the same. my firm was more transparent re: cuts, so I'm surprised that this has been my partner's experience.

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I'm thinking it has to do with maintaining appearances. PrecedentJD, Ultra Vires, and Canadian Lawyer Magazine keep track of Associate hires and student hireback rates at the large firms. The law schools also probably keep track of where their students are articling. By showing that the firms are still hiring during the pandemic, it maintains the facade that they are doing well and have come out of this unscathed.

Hireback rates for articling students has been good this year as reported by PrecedentJD. In light of all these anecdotes and rumours, I don't think things are as rosy as they seem to appear. 

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22 hours ago, BuzzBuzz said:

My firm reinstated salaries a few weeks back. My partner's firm is a comparable firm to mine and so far, there's been no news regarding when their salaries will be reinstated. Cuts have been ongoing since the start of the pandemic. The catch is this -- my partner's firm has brought on new hires while continuing to cut the salaries of existing staff and associates.

When I was advised their firm was hiring under a pay cut, I thought this was an immediate red flag: surely if the firm isn't generating enough revenue to pay existing folks their full wages, I can't imagine how they have funds to bring new support staff and associates onboard, unless the salary cuts from existing staff and associates are now being used to fund the salaries of new people. That whole situation strikes me as pretty exploitative. Is this happening commonly elsewhere, or is this a genuine red flag?

 

I know something similar happening to at least a couple of midsize firms (GTA) as well. Salary cuts were announced in March, but have not been reinstated, nor has there been any definitive commitment on when salaries will be reinstated. In the mean time, associates are billing just as much since COVID started. I know there's the thought that economic conditions will be uncertain for a while going forward, but there's little excuse for the lack of transparency, and it does seem like some firms are using this opportunity to pad the bottom lines. I for one think this is very short sighted, job market is slow right now, so not much anyone can do for now, but people will definitely remember this...

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10 hours ago, besmackin said:

I know something similar happening to at least a couple of midsize firms (GTA) as well. Salary cuts were announced in March, but have not been reinstated, nor has there been any definitive commitment on when salaries will be reinstated. In the mean time, associates are billing just as much since COVID started. I know there's the thought that economic conditions will be uncertain for a while going forward, but there's little excuse for the lack of transparency, and it does seem like some firms are using this opportunity to pad the bottom lines. I for one think this is very short sighted, job market is slow right now, so not much anyone can do for now, but people will definitely remember this...

Would they? As a student in the recruit, how would you really know which firms shortchanged their associates and which ones didn't without the word of mouth coming from the network that established lawyers already have? I feel like something like this wouldn't be openly discussed by lawyers to law students.

Edited by Aschenbach

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11 hours ago, besmackin said:

I know something similar happening to at least a couple of midsize firms (GTA) as well. Salary cuts were announced in March, but have not been reinstated, nor has there been any definitive commitment on when salaries will be reinstated. In the mean time, associates are billing just as much since COVID started. I know there's the thought that economic conditions will be uncertain for a while going forward, but there's little excuse for the lack of transparency, and it does seem like some firms are using this opportunity to pad the bottom lines. I for one think this is very short sighted, job market is slow right now, so not much anyone can do for now, but people will definitely remember this...

Totally agree. I certainly would think twice about applying to any firm that not only kept cuts ongoing long after comparable firms reinstated salaries, but especially those who couldn't be bothered to give staff and associates any clear answers regarding the situation. Sure, there may still be some degree of uncertainty moving forward, but I would imagine most firms have ballparked when salaries could be reinstated and I think it says a lot about the firms who are simply choosing to leave their people in the dark and thus, unable to properly plan for the future, especially with a lot of loan deferrals seemingly coming to an end in the coming weeks. If, several months into a cut, a firm still really has no idea when salaries can be reinstated, then I would think that suggests some padding is going on or perhaps the financial health of the firm overall is questionable, which itself, would be concerning beyond the pandemic.

@Aschenbach I feel like students know a lot more than I expected they would. Ours were affected by the cuts we had going on at the time (not sure how common this is because articling students are not affected by cuts at my partner's firm) and so our students had an interest in figuring out what was going on elsewhere and seemed not to have issues finding lawyers to fill them in.

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30 minutes ago, Aschenbach said:

Would they? As a student in the recruit, how would you really know which firms shortchanged their associates and which ones didn't without the word of mouth coming from the network that established lawyers already have? I feel like something like this wouldn't be openly discussed by lawyers to law students.

I know a lot of it is hearsay, but I've been speaking with lawyers throughout the summer and I've found that most lawyers are willing to share what they know about other firms based on what their network told them/their own experience. Not sure how critical they would be though of their own firm.

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7 hours ago, Aschenbach said:

Would they? As a student in the recruit, how would you really know which firms shortchanged their associates and which ones didn't without the word of mouth coming from the network that established lawyers already have? I feel like something like this wouldn't be openly discussed by lawyers to law students.

I was speaking to associates looking at lateral opportunities, not students necessarily. But even for students, while lawyers may not criticize their own firm, they will speak positively about firms that treat their employees well. So if you're talking to a lawyer and they're gushing about a competitor, I would read between the lines.

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On 8/8/2020 at 5:25 PM, BuzzBuzz said:

My firm reinstated salaries a few weeks back. My partner's firm is a comparable firm to mine and so far, there's been no news regarding when their salaries will be reinstated. Cuts have been ongoing since the start of the pandemic. The catch is this -- my partner's firm has brought on new hires while continuing to cut the salaries of existing staff and associates.

When I was advised their firm was hiring under a pay cut, I thought this was an immediate red flag: surely if the firm isn't generating enough revenue to pay existing folks their full wages, I can't imagine how they have funds to bring new support staff and associates onboard, unless the salary cuts from existing staff and associates are now being used to fund the salaries of new people. That whole situation strikes me as pretty exploitative. Is this happening commonly elsewhere, or is this a genuine red flag?

 

 

On 8/8/2020 at 9:55 PM, Deadpool said:

I'm thinking it has to do with maintaining appearances.

For the students, sure.  The associates are more concerning: a desperation play to raise funds by bringing in associates with even a marginal book of business?  Or something as benign as just refusing to overlook a good buying opportunity in favour of restoring salaries when there's no apparent rush to do so?

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On 4/3/2020 at 9:34 AM, Disputes said:

I went to the office yesterday to send some faxes...

People still send faxes?

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