Monday, August 27, 2007

Will BigLaw start cutting its junior real estate lawyers?

Your guess is probably as good as mine. There's mixed feelings in this post, with a reaction that if any area might get hit real estate might be among them. This has probably not happened since the early 90s when I left law school.

Some things I do know are as follows:

By the late 1990s there was a complete dearth of good real estate lawyers out there. I don't see that kind of black hole happening again.

We are also, however, in a different paradigm than we were some years ago, when even then there were associate layoffs. Whereas profits have always been important, when you see the things going on these days at some firms to maximize profits over any other factor, then associates and non-equity partners are, in my opinion, more fungible than ever.

Well-run law firms will be prepared for this and will have reduced hiring in advance and taken other measures to be in a position to ride out a market slump. They will also be willing to tell partners to be prepared to take such a hit. I can think of firms that will be fine, albeit with reduced profits, and others that will not. So if you work at a shop ask yourself: how well is my firm run and prepared to deal with a down time?

Who knows whether there is a downturn at all? The media tends on glooming and dooming these things under the theory, "If it bleeds, it ledes" (or leads, if you insist on not using the journalistic term). I am still an optimist and do not think there will not be a major bloodbath, at least not in commercial real estate. But I also know I am not infallible.